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OO RUEHAG RUEHBC RUEHCHI RUEHDA RUEHDE RUEHDF RUEHDT RUEHFL RUEHIK
RUEHKUK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHMOS RUEHNH RUEHPB RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTC #0616/01 0811558
ZNR UUUUU ZZH
O 221558Z MAR 06
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5167
INFO RUEHEE/ARAB LEAGUE COLLECTIVE PRIORITY
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE PRIORITY
RUCNMUC/EU CANDIDATE STATES COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHUL/AMEMBASSY SEOUL PRIORITY 1316
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RUCNFB/FBI WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAHLC/HOMELAND SECURITY CENTER WASHINGTON DC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY 0265
RUEHGV/USMISSION GENEVA PRIORITY 1301
RUCNDT/USMISSION USUN NEW YORK PRIORITY 4081

UNCLAS SECTION 01 OF 05 THE HAGUE 000616 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/ESC/TFS, S/CT, INL/C, IO/PSC 
STATE ALSO FOR EUR/PGI, EUR/ERA, EUR/UBI 
TREASURY FOR LEVEY/OBRIEN, OFAC 
NSC FOR ZARATE 
JUSTICE FOR CRM/AFMLS 
FBI FOR TERRORIST FINANCING OPERATIONS SECTION 
USEU FOR JUNDERWOOD 
 
E.O. 12958: N/A 
TAGS: KTFN ETTC EFIN PTER ECON EUN PREL NL
SUBJECT: DUTCH TERRORIST FINANCE CONFERENCE MARCH 15-16 
 
REF: 05 THE HAGUE 2356 
 
¶1.  SUMMARY.  Treasury Under Secretary Levey led the USG 
delegation to the March 15-16 Dutch-hosted international 
conference on terrorist financing issues.   Expert-level 
workshops addressed enhancing the effectiveness of financial 
investigations, improving communications between the public 
and private sector, and assisting developing countries in 
implementing global anti-money laundering/counterterrorism 
financing (AML/CTF) standards.  Conference Ministerial 
conclusions urged leadership by Finance Ministries to utilize 
their authorities to combat illicit finance of all types, 
including terrorist financing.  Officials also stressed 
action in such areas as the development of interagency groups 
to improve information flows, lower thresholds for 
information exchanges between relevant foreign counterparts, 
training programs for financial investigations, guidance for 
the private sector on targeted financial controls, 
industry/government advisory groups to ensure information 
exchanges and the creation of effective risk-based guidance, 
and assistance programs supporting the progressive 
implementation of AML/CTF standards by developing countries. 
Dutch Finance Minister Zalm called for further discussion of 
these follow-on actions within upcoming meetings of the EU's 
Economic and Financial Affairs Council (Ecofin), G-7, G-20, 
ASEAN Finance Ministers, and Financial Action Task Force. 
The Washington interagency process and Embassy The Hague 
played a significant role in shaping the content of this 
conference.  (This message has been cleared by Treasury Under 
Secretary Levey and Assistant Secretary O'Brien.)  END 
 
SIPDIS 
SUMMARY. 
 
 
¶2.  The Dutch Finance Ministry hosted on March 15-16 in The 
Hague an international conference on terrorist financing 
issues.  The concluding Ministerial session of the conference 
included presentations by Treasury Under Secretary for 
Terrorism and Financial Intelligence Stuart Levey, Spanish 
Finance Minister Pedro Solbes, South Korean Deputy Finance 
Minister Kwon Tae-Shin, and Dutch Finance Minister Gerrit 
Zalm.  Other conference participants included Treasury 
Assistant Secretary for Terrorist Financing Patrick O'Brien, 
Financial Action Task Force (FATF) President Kader Asmal, EU 
Counter Terrorism Coordinator Gijs de Vries, as well as 
representatives from 41 countries, 15 international 
organizations (World Bank, IMF, UN, European Union, Europol, 
FATF and its regional bodies, Egmont Group, MONEYVAL, Asia 
Pacific Group, Eurasian Group, and Offshore Group of Banking 
Supervisors), and the private financial sector.  The 
conference, an initiative first raised during Treasury 
Secretary John Snow's June 2005 visit to the Netherlands 
 
SIPDIS 
(reftel), was a follow-on to efforts begun in this area 
during the 2004 Dutch EU Presidency and designed to build on 
and complement existing international dialogues within the 
UN, FATF, G-7, and U.S.-EU dialogue on combating terrorist 
financing. 
 
FINANCE MINISTRIES KEY TO FIGHT AGAINST TERRORIST FINANCING 
--------------------------------------------- -------------- 
 
¶3.  Dutch Finance Minister Zalm opened the conference by 
noting significant progress over the last five years in the 
fight against terrorist financing, including the seizure of 
some $216 million in terrorist-related assets, real progress 
in securing formal financial channels, and the creation of 
more effective regulatory and supervision regimes for 
alternative remittance systems and non-profit organizations. 
Despite such progress, he cautioned that now was not the time 
to sit back and relax and called on conference participants 
to re-energize their efforts in seeking improved cooperation 
 
THE HAGUE 00000616  002 OF 005 
 
 
between investigative authorities at the national level, 
public and private sectors, and countries with developed, 
high-tech financial centers and those with less developed 
financial systems.  As financial markets were crucial 
partners in this effort, Finance Ministers had the "ultimate 
responsibility within government to make this fight a 
success," Zalm stressed.  (The full text of Zalm's remarks is 
available at www.minfin.nl.) 
 
¶4.  FATF President Asmal underscored the importance of 
political leadership, regional FATF-style bodies, and 
effective risk-based guidance to ensure private sector 
compliance with FATF recommendations.  He highlighted the 
need to involve developing countries in the FATF to ensure a 
sense of ownership and recommended that developing countries 
focus on compliance with core AML/CTF requirements initially 
rather than attempt to implement all simultaneously.  EU 
Counter Terrorism Coordinator de Vries stressed the role of 
the EU in the FATF, MONEYVAL, and UN.  He noted EU technical 
assistance to Indonesia, Algeria, and Morocco, and a meeting 
this month to discuss the creation of common minimum 
standards for financial investigations in the EU.  De Vries 
was critical of EU member states that had not ratified 
necessary protocols to the Europol Convention, adding that 
this prevented joint U.S.-EU analysis of frozen bank 
accounts.  He also urged the European Commission to move 
forward in the independent review of EU implementation of 
FATF Special Recommendations. 
 
¶5.  Urs von Daenike, Head of the Swiss Service for Analysis 
and Prevention, stressed the need to combine financial 
intelligence with other types of intelligence to gain a 
better understanding of cases as well as the importance of 
sharing such information with the private sector.  Antonio 
Maria Costa, Executive Director of the UN Office on Drugs and 
Crime (UNODC), described the UN approach on terrorist 
financing as piecemeal due to the lack of a comprehensive, 
underlying agreement, which does exist in the area of drugs 
and crime.  He noted UNODC efforts to provide assistance to 
countries to ratify UN instruments, adopt national 
legislation, build administrative capacity to implement 
legislation, and cooperate with third countries.  He offered 
that the recently adopted UN Convention on Corruption could 
be a useful tool in addressing terrorist financing issues. 
Bert Heemskerk, CEO of Rabobank the Netherlands, said 
financial institutions, as the ultimate "gatekeeper" of the 
global financial system, were willing but needed the tools 
and authority to join efforts in the fight against terrorist 
financing.  He also stressed the need to balance regulatory 
requirements with associated administrative burden costs. 
 
WORKSHOP I - COOPERATION ON FINANCIAL INVESTIGATIONS 
--------------------------------------------- ------- 
 
¶6.  Workshop I opened with a "sanitized" presentation of a 
recent investigation into the role of a Netherlands-based NGO 
suspected of involvement in terrorist and extremist 
activities and the role of operational cooperation and 
financial information in the case.  Other panelists, 
including Treasury A/S O'Brien, shared national best 
practices in the area of cooperation between financial 
investigative authorities.  Nicholas Kaye, Directorate 
General for Justice, Freedom and Security, European 
Commission, noted a European Commission/Europol initiative to 
promote the use of financial investigations via common 
minimum training standards in EU member states.  Workshop 
participants agreed on the need for the following: 
 
-- Enhanced financial investigations as a standard part of 
criminal investigations into terrorist activities; 
 
THE HAGUE 00000616  003 OF 005 
 
 
-- Legal frameworks that allow for the sharing of relevant 
information with appropriate privacy and civil liberty 
safeguards; 
-- Increased trust among various stakeholders in the 
investigative process; 
-- Pro-active intelligence gathering in addition to 
investigations following terrorist attacks; 
-- Development of operational interagency groups and task 
forces to ensure an expedited low threshold exchange of 
information among investigative authorities (intelligence 
services, police, customs, tax revenue services, financial 
regulators, public prosecutors, Financial Intelligence Units, 
and other investigative authorities) and a deconflicting of 
activities by agencies involved in investigations; 
-- Use of specialized services for analyzing and datamining 
of financial intelligence; 
-- Lower thresholds for the exchange of information with 
foreign counterparts; 
-- Investment in training programs for financial 
investigations; and 
-- Use of information from financial investigations to guide 
the private sector in applying targeted financial controls 
(concrete freezing controls, specific threat or risk 
information and targeted advisories, specific feed back from 
court cases, red flag indicators, broader trends and 
typologies, and general risk assessments). 
 
WORKSHOP II -  PUBLIC-PRIVATE COOPERATION 
----------------------------------------- 
 
¶7.  Workshop II discussed best practices in the area of 
public-private and private-private cooperation, with views 
from policy-makers, financial supervisors, and private 
financial institutions.  Workshop participants agreed on the 
following: 
 
-- Financial institutions have a clear interest in avoiding 
any links with the financing of terrorism and are ready and 
willing to contribute, within their capabilities, to the 
prevention and detection of funds used to support 
international terrorism; 
-- Cooperation between the public and private sector requires 
mutual trust and an effective exchange of information, 
including possible mechanisms to vet bank staff to receive 
classified intelligence; 
-- Finance Ministries must ensure that there are clear points 
of contact and clear distributions of responsibilities within 
governments to guarantee a systematic provision of relevant 
information to the private sector; 
-- Senior management of financial institutions is responsible 
for ensuring an awareness within their entire institutions of 
the need to prevent terrorists and other criminals from 
misusing the financial sector and putting in place systems 
that adequately assess risks, "know their customers," and 
report suspicious transactions to law enforcement; 
-- Intelligence and risk-based approaches require that 
government agencies, financial supervisors, and the financial 
sector work together as a team; 
-- Legal obstacles should be lifted, when possible, to ensure 
the exchange of relevant information, notably between 
financial institutions and within international financial 
conglomerates, with special reference to the work already 
begun in this area within FATF; and 
-- Countries should have in place appropriate national 
responses to ensure the necessary exchange of information 
between the public and private sector on all levels, 
including a clear public confirmation of the importance of 
sharing public sector information with the private sector, 
structures that support coordinated, effective, and swift 
communication between the public and private sector, advisory 
 
THE HAGUE 00000616  004 OF 005 
 
 
groups of industry and government representatives to ensure 
the development of effective risk-based guidance, and a 
network of specific contacts (security vetted staff members) 
in financial institutions to receive specific threat 
information. 
 
WORKSHOP III - ROADMAP FOR ACHIEVING GLOBAL STANDARDS 
--------------------------------------------- -------- 
 
¶8.  Workshop III explored means for creating a more conducive 
environment for countries with less developed economies and 
institutional capacities to help them implement progressively 
an effective counterterrorism financing regime.  Workshop 
participants discussed the need to raise awareness of the 
importance of AML/CTF and to increase political support and 
focus on AML/CTF implementation.  Participants agreed that 
the pace at which this could be achieved would vary from 
country to country and that further work in the FATF and 
other international fora was needed to help such countries 
focus on fundamental requirements and threats first before 
moving to a more comprehensive level of implementation, 
including the following roadmap: 
 
-- Increased customized technical assistance; 
-- Improved coordination mechanisms for the delivery of 
technical assistance; 
-- Larger roles for regional organizations (FATF-style 
regional bodies) in coordinating the demand and supply of 
technical assistance; 
-- Continued recipient country control, with appropriate 
internal coordination mechanisms, over technical assistance 
needs, to encourage "ownership" of assistance programs; 
-- Recognition of the private sector's potential contribution 
to technical assistance programs; and 
-- Strengthening of technical support and guidance by 
international organizations (i.e., World Bank and UN) to 
countries transitioning from informal to formal systems for 
both domestic and cross border remittances. 
 
MINISTERIAL CONCLUSIONS -- APPLYING THE RIGHT TOOLS 
--------------------------------------------- ------ 
 
¶9.  In the concluding Ministerial session, U/S Levey 
highlighted the powerful tools that Finance Ministries, like 
the U.S. Treasury Department, have at their disposal to 
accomplish the dual mission of protecting financial markets 
from abuse and combating threats to national security.  He 
stressed the important role that financial authorities have 
played in disrupting and dismantling terrorist networks, 
including the development of effective targeted financial 
sanctions regimes.  While more work needed to be done in this 
area, he suggested that such tools could also be used to 
combat threats of all kinds, including the proliferation of 
weapons of mass destruction (WMD).  Various UN Security 
Council Resolutions also called on the use of financial tools 
to combat these threats, and he expected more calls to action 
by financial authorities in the future.  U/S Levey also noted 
that the creation of his position within Treasury represented 
a new approach to defending national security interests by 
attacking the financial underpinnings of any threats.  (The 
full text of U/S Levey's remarks are available at 
www.treas.gov/press/releases.) 
 
¶10.  While Justice and Interior ministries often played the 
largest role in combating terrorist financing, Spanish 
Finance Minister Solbes agreed that Finance Ministries had a 
decisive part to play in protecting the security and 
integrity of the financial sector.  He stressed the need for 
measured and tailored responses to such threats that 
minimized the burden on working immigrant populations. 
 
THE HAGUE 00000616  005 OF 005 
 
 
Noting Spain's chairmanship of FATF's working group on 
Special Recommendation VIII (charities and non-profits), 
Solbes called for greater national and international 
cooperation, increased financial targeting actions, enhanced 
public-private cooperation, and improved guidance to the 
private sector in this area. 
 
¶11.  South Korean Deputy Finance Minister Kwon pointed to a 
significant increase in anti-money laundering and terrorist 
financing efforts in South Korea since 2001.  He indicated 
plans to incorporate conference conclusions within 
counterterrorism legislation currently under consideration in 
his country.  He also proposed the convening of an ASEAN 
meeting of Finance Ministers on the issue of helping 
developing countries establish effective AML/CTF systems and 
called for increased technical assistance in this area 
through the World Bank and Asian Development Bank. 
 
¶12.  In presenting recommendations from the conference 
workshops, as outlined in the Ministerial Conclusions 
statement (see www.minfin.nl), Minister Zalm recalled that 
the idea for the conference had first been raised during the 
June 2005 visit to the Netherlands of Treasury Secretary 
Snow.  He stressed that the fight against terrorist financing 
required cooperative efforts within and outside the realm of 
Finance Ministries.  With this in mind, he called for 
effective follow-on actions within countries around the world 
as well as in upcoming meetings of the EU's Economic and 
Financial Affairs Council (Ecofin), G-7, G-20, ASEAN Finance 
Ministers, and FATF. 
ARNALL