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OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHRL #2829/01 2681620
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O 251620Z SEP 06
FM AMEMBASSY BERLIN
TO RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 5431
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNFRG/FRG COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 002829 
 
SIPDIS 
 
SIPDIS 
 
TREASURY FOR JFREIS AND MJACOBSON 
 
E.O. 12958: DECL: 09/25/2016 
TAGS: PTER KJUS ETTC EFIN KTFN PGOV GM EU
SUBJECT: TREASURY OFFICIALS UNDERSCORE BASIS, VALUE OF TFTP 
("SWIFT" PROGRAM) 
 
 
Classified By: Minister-Counselor for Economic Affairs Robert F. Cekuta 
 for Reasons 1.4 (b) and (d) 
 
¶1. (C) Summary.  Treasury Department Deputy Assistant General 
Counsel James Freis and Senior Advisor Michael Jacobson 
underlined the legal basis and the value of the Terrorist 
Finance Tracking Program (TFTP) in several meetings with 
German officials September 19.  German officials, who are 
preparing to answer Bundestag inquiries, said German interest 
focused on the program's legality and who in Germany had been 
informed.  The expert-level officials appeared convinced of 
the TFTP's legality under U.S. law, but nevertheless 
expressed concern about legality and perceptions under EU 
civil legal standards.  End Summary. 
 
----------------- 
U.S. PRESENTATION 
----------------- 
 
¶2. (SBU) Freis walked German officials through the legal 
underpinnings, drawing from the 1977 International Emergency 
Economic Powers Act, the relevant UN Security Council 
Resolutions, the President's emergency declaration after 
9/11, Executive Order 13224, and OFAC implementing 
regulations.  On safeguards, Freis stressed the audits by 
Booz Hamilton and SWIFT oversight of data inquiries.  Asked 
about the program's value and successes, Freis and Jacobson 
referred to an arrest of a Jemaah Islamiyah leader complicit 
in the Bali nightclub bombing. 
 
---------------------------------------- 
GERMAN CONCERNS: LEGALITY, WHO KNEW WHAT 
---------------------------------------- 
 
¶3. (C) German officials agreed the TFTP had raised some 
doubts and questions in German public debate, but they had 
been modest and manageable compared to German media and 
Bundestag interest in other issues -- they cited the Kurnaz 
release from Guantanamo and alleged renditions.  Justice 
Ministry Deputy Office Director for Securities, Bank and 
Stock Exchange Law Carola Schwersmann listed what she sees as 
the areas of greatest concern to Bundestag members regarding 
TFTP: what are the facts concerning what TFTP is and what it 
is not; who in the German Government knew what about TFTP, 
when, and why; and is TFTP legal.  She cautioned that 
legality under U.S. would not be sufficient for some 
Bundestag members and cited Guantanamo as an example of an 
activity legal under U.S. law but not acceptable to some 
Bundestag members.  Social Democratic Party (SPD) Bundestag 
Interior Affairs Committee Senior Staff Member Sven Berger 
said German questions would focus on legality and 
authorization. 
 
¶4. (C) Schwersmann showed Freis and Jacobson a list of 25 
questions posed by Bundestag members from the opposition 
Greens Party and explained she is advising the Finance 
Ministry on the German Government's response.  Relatively few 
of the questions concerned the TFTP itself; most concerned 
German government knowledge of it.  Berger said he was 
unaware of SPD members expressing any concerns about the 
TFTP, but Schwersmann said she expected the opposition FDP 
(Free Democrats) to raise doubts similar to the Greens'. 
Berger asked why SWIFT had kept information about financial 
transactions at its U.S. facility that did not involve U.S. 
banks or addresses -- e.g., transfers between two European 
banks. 
 
¶5. (C) Finance Ministry Office Director for Terrorism 
Finance, Money Laundering and Financial Crimes Michael 
Findeisen feared it would be very difficult to convince 
Bundestag members and other European parliamentarians that 
SWIFT's cooperation with the U.S. at the same time complies 
with stringent European data-protection laws and regulations. 
 Findeisen and his colleague Christian Mayer, who will be 
part of the German Government team to answer Bundestag 
questions at a September 27 hearing, also raised the issues 
of sovereignty and jurisdiction, noting that SWIFT, as a 
Belgian firm, was explicitly subject to Belgian and EU 
data-protection laws, so there appeared to be a conflicts of 
law problem.  SWIFT and its participating financial 
institutions would likely still have considerable explaining 
to do on the coming weeks and months, Findeisen said. 
 
--------------------------------------------- ---- 
TFTP "PROTECTS PRIVACY"; OTHER FAVORABLE COMMENTS 
--------------------------------------------- ---- 
 
¶6. (C) In response to concerns raised about protection for 
 
BERLIN 00002829  002 OF 002 
 
 
personal data in the United States, Freis stressed that 
although U.S. laws might be different, there was a 
combination of U.S. restrictions on use of data and 
safeguards that together create some equivalency with what 
exists in the EU to protect data.  Moreover, he stressed that 
under the EU Privacy Directive itself, there are exceptions 
for the sharing of national security information, including 
with respect to combating terrorist financing.  Findeisen 
said that the U.S. team's presentation had convinced him that 
TFTP is narrowly focused, has safeguards in place, and has a 
sufficient legal basis under U.S. law.  At the end of the 
meeting, Schwersmann noted that the more she learned about 
the TFTP, the more she believed that Germany "would have done 
the same thing."  Berger commented that the U.S. might argue 
that the TFTP actually respects individuals' privacy more 
than other law enforcement programs to obtain financial data. 
 German agencies with proper authorization approach banks 
where a suspect has an account, inform bank staff of their 
suspicion, and demand information about the suspect's 
accounts, Berger explained.  Experience had shown that even 
if a suspect is eventually exonerated or acquitted, his 
reputation at his bank is ruined and banks have denied loans 
and other services simply on the basis of the initial police 
inquiries.  In contrast, Berger concluded, TFTP did not 
inform banks of government suspicions. 
 
¶7. (U) This message was cleared by the Treasury delegation 
subsequent to their departure from Berlin. 
TIMKEN JR