US embassy cable - 04THEHAGUE2310

UNCLAS SECTION 01 OF 02 THE HAGUE 002310 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EB/ESC/TFS, EUR/ERA, EUR/UBI 
 
E.O. 12958: N/A 
TAGS: ETTC, ECON, PTER, NL, EUN 
SUBJECT: EUR/ERA CHASE MEETING ON DUTCH TERRORIST FINANCING 
PRIORITIES 
 
REF: A. THE HAGUE 1741 
 
     B. BRUSSELS 3236 
     C. STATE 171579 
     D. THE HAGUE 1883 
 
This message is Sensitive But Unclassified.  Please treat 
accordingly. 
 
1.  (U)  In a September 10 meeting, Erik van Andel, Head of 
the Financial Integrity Division, Dutch Finance Ministry 
(MOF), briefed visiting EUR/ERA Office Director Peter Chase 
on Dutch EU Presidency priorities on combating terrorist 
financing.  (See septels for reporting on Chase's meetings on 
EU development and political issues.)  These priorities, van 
Andel explained, included approval of the EU Third Money 
Laundering Directive, improvements to the EU designation 
process (Clearinghouse mechanism), better regulation of cash 
couriers including cross border currency declaration issues, 
creation of standards for financial institutions on wire 
transfers, a tightening of the supervision of non-profits and 
charities to prevent abuse, universal compliance within the 
EU with Financial Action Task Force (FATF) special 
recommendations, and a cross-pillarization of efforts on 
combating terrorist financing within the EU's three pillars. 
See ref A for further details on Dutch EU Presidency 
priorities. 
 
SEEKING "POLITICAL AGREEMENT" ON MONEY LAUNDERING DIRECTIVE 
--------------------------------------------- -------------- 
 
2.  (SBU)  On the Third Money Laundering Directive, Jan 
Willem van den WallBake, MOF Senior Coordinator for 
Anti-Money Laundering and Terrorist Financing, said the Dutch 
hoped for "political agreement" within the EU by the year's 
end, with further discussion on the directive expected at the 
December Ecofin and adoption by the summer of 2005.  He 
cautioned that this adoption target could slip as the 
European Parliament had not yet taken a position on the draft 
directive.  (See ref B for details on the directive.) 
Meanwhile, divisions remained among member states on the need 
for a specific definition for beneficial ownership, the 
setting of a 15,000 euros large cash reporting minimum, and a 
definition for politically exposed persons that would not 
significantly increase administrative burden costs on 
financial institutions.  The Dutch hoped to make further 
progress on these outstanding differences at the September 21 
Working Party on Financial Services (money laundering, 
terrorist financing).  Terrorist financing, van den WallBake 
added, would be addressed in each article of the new 
directive. 
 
ONLY "SMALL STEPS" ON EU CLEARINGHOUSE PROCESS 
--------------------------------------------- - 
 
3.  (SBU)  Margreet Wenting, MOF Senior Policy Advisor on 
terrorist financing, said that the Dutch-initiated September 
22 EU seminar on terrorist financing (see refs C and D for 
details) would help to identify what was and what was not 
working within the EU Clearinghouse process.  However, any 
proposals for improving the process would probably be limited 
to "small steps" within the existing legal framework given 
differences among member states on the degree of authority to 
be wielded by the body.  Van den WallBake clarified that 
unanimity among member states would be required for any 
changes to the process.  Any pressure for large changes 
risked the chance of reversing gains already made and 
creating an even less effective and efficient process. 
Quoting EU Counterterrorism Coordinator Gijs de Vries, van 
Andel suggested that any major changes or improvements to the 
Clearinghouse process could require Treaty amendments. 
 
SHARING OF INFORMATION AND BEST PRACTICES KEY 
--------------------------------------------- 
 
4.  (SBU)  On these and other Dutch priorities mentioned in 
para 1, the MOF welcomed further cooperation with the USG, 
especially regarding information exchanges on USG efforts and 
best practices in these areas.  Van den WallBake hoped USG 
presentations on post-designation mechanisms/analysis 
(Justice Department) and the supervision of non-profits and 
charities (Treasury Department) at the September 22 EU 
seminar would serve to raise awareness and educate many 
within the EU on the importance of these issues in the fight 
against terrorist financing.  Chase agreed and encouraged his 
MOF interlocutors to keep the Embassy and Washington informed 
of other opportunities for such exchanges.  He also urged his 
MOF interlocutors to use existing fora, such as the Financial 
Market Regulatory Dialogue, to broaden the discussion on how 
these issues were being addressed in the U.S. and EU. 
 
5.  (U)  This message has been cleared by EUR/ERA Office 
Director Peter Chase. 
SOBEL