VZCZCXRO2498
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHBS #0071/01 0151435
ZNR UUUUU ZZH
P 151435Z JAN 08
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC PRIORITY
INFO RUEAHLC/DEPT HOMELAND SECURITY WASHINGTON DC
RUEAORC/US CUSTOMS AND BORDER PROTECTION WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMFIUU/FBI WASHINGTON DC
RUEAHLC/HOMELAND SECURITY CENTER WASHINGTON DC
RHEHNSC/NSC WASHDC
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 02 BRUSSELS 000071 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EEB/ESC/TFS, S/CT, L, EUR/ERA 
DEPT PLEASE PASS TO DHS/ICE 
 
E.O. 12958: N/A 
TAGS: ETTC EFIN PTER KTFN KCRM KJUS KHLS SNAR EUN
SUBJECT:  EU PROPOSAL TO USG FOR CASH COURIERS / CONTROLS 
COOPERATION 
 
REF:  SNYDER EMAIL 12/14/2007 TO U.S.-EU TROIKA PARTICIPANTS ON CASH 
 
COURIER ISSUE 
 
¶1.  (SBU) Summary:  EU Member State representatives will discuss on 
Jan. 16 how to respond to U.S. proposals for the next U.S.-EU 
practitioners' workshop on countering terrorist financing at the 
EU's Committee on Terrorism (COTER) working group.  A Council 
Secretariat contact predicted to USEU that cash couriers could be 
 
SIPDIS 
the most feasible substantive topic to include on the agenda and 
doubted that there would be "enough meat" for an exclusive 
stock-taking session.  She encouraged the U.S. to accept the 
Commission's proposal to send U.S. representatives to the April 
meeting of the EU expert group on cash controls, perhaps to be 
followed by a larger workshop meeting in May under the Slovenian 
Presidency.  End summary. 
 
------------------------------------------ 
Commission and Slovenian Presidency's 
Proposal for U.S.-EU Experts Cash Controls 
Info Exchange 
------------------------------------------ 
 
¶2.  (SBU) As reported Ref Email, USEU Customs Attache and Econoff 
met on December 13, 2007 with the European Commission Directorate 
General for Taxation and Customs Union (DG TAXUD's) Unit for Risk 
Management, Security and Specific Controls John Pulford (Head of 
Unit), Karl Elsner, and Stella Nicoloudaki to discuss the EU's 
proposal for U.S.-EU experts to exchange information on cash control 
procedures.  The EU cash controls regulation came into force in June 
¶2007.  At the November 2007 U.S.-EU Terrorist Financing Troika, 
TAXUD invited U.S. counterparts to join a future meeting of the EU's 
working-level expert group which meets regularly on implementing the 
regulation.  In some cases (e.g., UK and Germany) but not all (e.g., 
Spain and Italy), the EU customs experts are dual-hatted with law 
enforcement functions.  The customs group comprises those 
authorities charged with receiving the EU's written cash control 
declarations, which are in turn sent to the respective EU Member 
State (EUMS) Financial Intelligence Units (FIUs).  The expert group 
primarily serves a "first pillar" internal market mandate, but it 
also occasionally discusses "third pillar" law enforcement policy 
issues. 
 
¶3.  (SBU) In principle, the EU Presidency holds the reins for 
organizing U.S.-EU discussions on cash controls.  The Slovenian 
Presidency asked TAXUD, which hosts the expert group, to organize 
the U.S.-EU exchange on the Presidency's behalf.  TAXUD thus 
proposed that appropriate USG cash control experts join the April 
1-2 working group meeting in Brussels for an initial exchange of 
information among practitioners.  TAXUD suggested the agenda could 
include the following: 
 
--Mechanics of administering respective U.S. and EU cash control 
systems (e.g., how do we handle specific difficulties, such as 
transiting crew members, minors, casinos, stores); 
--Trends (e.g., concealments, sources, etc.); 
--Electronic money (e.g., wire transfers, gift cards, emerging 
technology) 
 
TAXUD believes that if this initial exchange is fruitful, this could 
be the start of a regular exchange with this grouping. 
 
------------------------------ 
Countering Terrorist Financing 
through Cash Controls 
------------------------------ 
 
¶4.  (SBU) The original objective of the EU cash control regulation 
was to counter terrorist financing.  The expert group attached to 
the implementing regulation, however, does not include the broader 
group of practitioners, policymakers, prosecutors, analysts, law 
enforcement agents, FIUs, and other stakeholders necessary to 
conduct a comprehensive U.S.-EU information exchange on countering 
terrorist financing via cash controls.  (TAXUD hinted that the EU 
FIUs in particular must be sensitized to the importance of their 
role.)  Such an exchange would require outreach to a larger set of 
practitioners, even beyond those in regular attendance at the 
U.S.-EU terrorist financing workshops.  TAXUD explained that this 
grouping would require a broader mandate and resources beyond 
TAXUD's immediate disposal, but they thought perhaps the French 
Presidency could marshal such an event.  This would require 
 
BRUSSELS 00000071  002 OF 002 
 
 
inter-service coordination within the European Commission, bringing 
in DG RELEX (External Relations), DG JLS (Justice, Freedom & 
Security), and DG MARKT (Internal Market), external coordination 
with the Council Secretariat and Presidency.  TAXUD would forfeit 
the lead once primary discussions leave the first pillar mandate on 
cash controls. 
 
------------------------------------------- 
Council Secretariat Views and the Next 
U.S.-EU Terrorist Financing Workshop Agenda 
------------------------------------------- 
 
¶5.  (SBU) Econoff followed up on Jan. 9 with Council Secretariat's 
Elisabetta Pietrobon (Transatlantic Relations desk).  Pietrobon 
expressed doubt that the idea of a stock-taking to encapsulate the 
U.S.-EU workshop series to date would have "enough meat" to do this 
exclusively.  Any final report could be initiated at the May 
workshop, but would need clearance from the formal EU Council before 
being finalized.  Pietrobon thought the U.S. proposal to discuss 
cash controls was the most promising substantive topic for the 
workshop agenda.  She suggested U.S. participation in TAXUD's April 
cash control working group could be a good preliminary meeting and 
be followed up at the May terrorist financing workshop with the 
larger group of stakeholder practitioners.  Pietrobon's personal 
view was that holding U.S.-EU talks on this subject in May would be 
advisable as TAXUD's Karl Elsner would retire in June, and the 
Commission would take some time to fill his institutional expertise. 
 For this reason she was personally hopeful to conduct the exercise 
prior to the French EU Presidency in July.  Pietrobon confirmed that 
EU Member States would discuss the possible format and topics for 
the next U.S.-EU practitioners' workshop on terrorist financing at 
the Jan. 16 COTER working group.  Septel will discuss other 
reactions to U.S. proposals for the workshop agenda. 
 
-------------------------------- 
Comment:  U.S. Interests / Goals 
-------------------------------- 
 
¶6.  (SBU) The USG should accept TAXUD's invitation to send select 
representatives of U.S. cash control experts to participate in the 
April 1-2 expert group.  Possible customs-to-customs counterparts 
could include ICE and CBP subject matter experts (SMEs) to exchange 
views, trends, and best practices related to enforcing cash 
controls.  A broader dialogue extended to additional law enforcement 
officials, either at the May U.S.-EU terrorist financing workshop or 
via another venue, would benefit from this initial exchange of 
practices.  The April meeting could open EU customs officials' eyes 
to the much larger counter-terrorism picture, providing a "hook" for 
broader discussions with other stakeholders. 
 
¶7.  (SBU) To bolster the strategy of extending security zones 
outward from U.S. borders, it is in the U.S. interest to help the EU 
stand up a robust, sophisticated approach to cash controls. 
Elimination of internal EU border checks through Schengen expansion 
(i.e., borders between EU countries as opposed to external EU 
borders) has meant enormous losses for investigative and evidentiary 
purposes, including cash control information.  EU and U.S. 
investigator and prosecutor consultations on how cash courier 
information can be retrieved and used to support criminal 
investigations and forfeiture actions in the United States, EU 
Member States, and elsewhere would be of great benefit at this time. 
 As previously reluctant EU Member States have warmed to the 
rationale for imposing written procedures on cash controls, the USG 
should now work to cement this buy-in and drive the point home that 
this process must be more than another tax-collecting paper 
exercise.  This could usefully promote broader law enforcement and 
counter-terrorism objectives.  Joining the April expert group venue 
would allow USG counterparts to "get in on the ground floor" in 
shaping the EU's evolving approach to enforcing border cash 
controls.  The USG should demonstrate the benefits of extensive 
information sharing to track, investigate, and prosecute bulk cash 
smuggling-related crimes and terrorism.  We can show how encouraging 
cooperation across disparate competent authorities, within and 
outside internal EU borders, is a vital and mutual security interest 
of global proportions.  End comment. 
 
MURRAY