US embassy cable - 04MADRID2902

C O N F I D E N T I A L MADRID 002902 
 
SIPDIS 
 
STATE FOR EB, S/CT, EUR/ERA AND EUR/WE 
TREASURY FOR DAS ZARATE AND OFAC 
 
E.O. 12958: DECL: 07/25/2014 
TAGS: ETTC, EFIN, PTER, KTFN, SP, Counterterrorism 
SUBJECT: TERRORIST FINANCE: VIEWS FROM THE WORKING LEVEL IN 
SPAIN'S FIU 
 
REF: MADRID 960 
 
Classified By: acting Econ Counselor Richard C. Merrin for reasons 1.4 
(b) and (d). 
 
1. (C) Summary.  SEPBLAC's (Spain's financial intelligence 
unit) working level officer responsible for terrorist finance 
issues, offered his views on legal and organizational issues 
affecting the fight against terrorist finance in Spain.  He 
predicted that the regulations for Spain's 2003 Terrorist 
Finance law would be completed by October.  He criticized the 
weak position SEPBLAC holds on the new Terrorist Finance 
Oversight Committee, but noted that his unit is committed to 
cooperation with other Spanish agencies and financial 
authorities.  Our contact also mentioned that SEPBLAC is 
working on an improved bank communication system, that will 
bring rural banks under oversight.  End Summary. 
 
2. (SBU) We met July 22 with the key working level SEPBLAC 
officer responsibile for terrorist finance issues.  In the 
coming fiscal year, SEPBLAC will hire new officers to create 
a permanent terrorist finance unit, which our contact hopes 
to head.  He just returned from a visit to FINCEN to gain 
understanding about the U.S. financial intelligence unit's 
(FIU's) role in combating terrorist financing.  He mentioned 
several issues and goals that would enhance his 
organization's ability to investigate and combat terrorist 
financing in Spain. 
 
3. (C) Our contact offered a positive outlook on the process 
of transcribing into regulation Spain's 2003 Law on the 
Prevention and Blocking of Terrorist Financing.  He noted 
that the statutory Terrorist Finance Oversight Committee (The 
Committee)  met last week to begin the regulation writing 
process.  He hinted that a possible draft already exists and 
the process might be completed as early as October.  Once 
fully enacted, Spain's regulators will have significantly 
more preventive and administrative power to fight terrorist 
financing. 
 
4. (C) The SEPBLAC officer expressed concern with the way the 
law is currently written, giving sole authority to launch an 
investigation to the Secretary of State for Security in the 
Ministry of Interior.  In his view, SEPBLAC is the more 
competent agency to police financial transactions because of 
its bank regulating role.  He noted that his superiors are 
considering ways of upgrading SEPBLAC's authority on the 
commission during the regulation drafting.  This may not be 
possible without a parliamentary change in the law. 
 
5. (SBU) Increasing international and internal coordination 
is another SEPBLAC priority.  Our contact noted that his 
agency is seeking greater information sharing with the 
Spanish Intelligence Agency, the Spanish National Police, the 
Guardia Civil, and the Ministry of Economy's Directorate 
General of the Treasury.  He also mentioned that the current 
director of SEPBLAC is dedicated to improving outreach to 
FIUs in other countries. 
 
6. (C) Our contact brought to light a weakness in SEPBLAC's 
ability to communicate asset search and freeze instructions 
to the entire Spanish banking system.  Currently, SEPBLAC's 
directives only reach Spain's largest banks, covering 80-90% 
of bank activity.  Small rural banks are not currently part 
of SEPBLAC's notification and information request system.  To 
remedy this situation, the section our contact heads is 
developing a computer system upgrade to send communications 
to all banks in Spain.  He predicted this system will be 
active in October. 
 
7. (C) Comment.  Our contact confirmed that at the working 
level, SEPBLAC is an organization committed to rooting out 
terrorist financing in Spain.  As an FIU, SEPBLAC is the main 
entity that carrying out Spain's efforts to locate and freeze 
terrorist funds.  His comments on the position of the 
Ministry of Interior's lead role on the Committee agree with 
our earlier concerns (reftel) on the Ministry of Interior's 
hesitance to carry out a preventive fight against terrorist 
financing.  In another recent conversation, an MFA contact 
pointed out that preventive and administrative approaches to 
stopping terrorist financing are counter to the Spanish 
mind-set.  Perhaps if SEPBLAC were given a stronger role, the 
fight against terrorist financing would be more aggressive. 
It will be interesting to see the outcome of the regulations, 
should our contact be correct in his predicted October 
completion date. 
MANZANARES