VZCZCXYZ0013
RR RUEHWEB

DE RUEHMD #2072/01 3101530
ZNR UUUUU ZZH
R 061530Z NOV 07
FM AMEMBASSY MADRID
TO SECSTATE WASHDC 3753

UNCLAS MADRID 002072 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EEB/ESC/TFS (JJALLORINA), S/CT, AND INL 
 
E.O. 12958: N/A 
TAGS: EFIN ETTC KTFN KCRM PREL PTER SP
SUBJECT: TERRORIST FINANCE: FOLLOW-UP ACTION REQUEST ON 
ILLICIT CASH COURIERS - SPAIN 
 
REF: STATE 152088 
 
¶1. (SBU) This message is sensitive but unclassfied. 
 
¶2. (SBU) The information provided in this message is keyed to 
the questions in reftel's para. 5. 
 
¶3. (U) The June, 2006 Financial Action Task Force (FATF) 
mutual evaluation of Spain found that Spain's "structures for 
dealing with terrorist financing are generally sound." 
However, with respect to FATF Special Recommendation IX on 
"Cross Border Declaration & Disclosure", FATF found that: 
"The declaration system as currently implemented raises some 
issues of effectiveness."  The FATF did not provide detail on 
what were the issues of effectiveness.  Spanish officials 
were aware that FATF would make this an issue.  As a result, 
the 10/13/06 Boletin Oficial (Spain's equivalent of the 
Federal Register) specified in Order EHA/1439/2006 that as of 
2/14/07, it would be obligatory to declare upon entry to 
Spain or exiting Spain the possession of euros 10,000 or more 
in cash.  The Spanish government issued a 2/13/07 statement 
reminding the public of this obligation as of 2/14/07. 
 
¶4. (U) Individuals caught smuggling an amount larger than 
euros 10,000 are only allowed to keep a maximum of euros 
1,000 and are liable to pay a fine of up to twice the amount 
of cash found. 
 
¶5. (SBU) EconOff asked Spanish Financial Intelligence Unit 
(FIU) Area Chief Jesus Torbado whether most people who live 
in Spain were aware of the declaration obligation given that 
it is not widely publicized.  For example, individuals flying 
into Spain are not obliged to declare that they are carrying 
less than euros 10,000 in cash.  The same is true with 
respect to the millions of people that take ferries every 
year from Spain to North Africa and back.  Torbado recognized 
that this was a problem despite the fact that in Spain, as in 
most legal systems, ignorance of the law and/or regulations 
is not a valid excuse for non-compliance.  Torbado said that 
the GOS was considering publicizing the declaration 
requirement more widely.  Beyond checking for bulk couriers 
per se, according to press reports Spanish law enforcement 
agencies have up to 700 mosques under surveillance.  Spanish 
authorities are concerned about money being raised in these 
institutions for the purpose of supporting yihad. 
 
¶6. (SBU) The FIU's Jesus Torbado told EconOff that since 
February 14 several cases (he did not have statistics though) 
had been filed against individuals that had been found with 
more than euros 10,000 on them.  Spanish authorities 
prosecute individuals on the grounds of material support for 
yihad.  For instance, on 10/24/07, Spanish police arrested 
six North Africans who, among other activities, were raising 
money for Islamic prisoners.  On 9/20/07, Spain arrested two 
Pakistani nationals on terrorism finance related charges. 
These arrests were coordinated with the FBI.  On 7/24/07, two 
Syrian nationals were charged with "collaboration with a 
terrorist organization, drawing up false contracts as well as 
money laundering." Spanish prosecutors noted in a 5/1/07 El 
Pais (Spain's leading daily) article that funds collected in 
Spain were ending up financing Al Qaeda activities outside 
Spain, but the prosecutors did not mention bulk cash 
smuggling as one of the ways for getting the money out - they 
mentioned hawalas, false contracts and Bahamian accounts as 
the conduits for getting the money out. 
 
¶7. (SBU) The Embassy economic section and Department of 
Homeland Security Immigration and Customs Enforcement 
(DHS/ICE) attache have exchanged information with Spanish 
counterparts on a French-Spanish "twinning" program to 
establish a Financial Intelligence Unit (FIU) in Morocco. 
Embassy Madrid's ICE office has provided bulk cash courier 
smuggling training to Morocco, which is complementary to the 
French-Spanish program. Embassy's Economic Section and ICE 
office intend to query Spanish officials further on how they 
intend to make the euros 10,000 declaration requirement more 
effective.  Embassy Madrid's ICE office is also working with 
Madrid Barajas airport officials on bulk cash courier 
smuggling issues in the drugs context. 
 
¶8. (SBU) Comment: Although Spanish law enforcement agencies 
have not focused (at least publicly) on bulk cash smuggling, 
a logical means of getting money from Spain to, for instance, 
North Africa, is through cash smuggling.  Both flights and 
the heavily used ferries between Spain and North Africa would 
be fairly easy ways to smuggle cash.  Moreover, given the low 
cost of financing many terrorist operations, we wonder 
whether the euros 10,000 declaration requirement is 
sufficient, even if more rigorously implemented.  In the drug 
context, ICE is working with Spanish officials at Barajas 
airport to sensitize them to bulk cash smuggling.  We will 
 
explore the possibility of expanding this cooperation to the 
terrorism finance arena. 
AGUIRRE