Wikileaks - MCCCXVI

200810 4/6/2009 6:24 09BUCHAREST231 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY VZCZCXRO0132 PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG DE RUEHBM #0231 0960624 ZNR UUUUU ZZH P 060624Z APR 09 FM AMEMBASSY BUCHAREST TO RUEHC/SECSTATE WASHDC PRIORITY 9394 RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUEHBS/USEU BRUSSELS PRIORITY 0031 INFO RUCNDT/USMISSION USUN NEW YORK PRIORITY 0175 RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY UNCLAS BUCHAREST 000231

DEPT FOR EUR/CE ASCHIEBE AND EEB/ESC/TFS TREASURY FOR OFAC JSMITH USEU FOR LSNYDER

SENSITIVE SIPDIS

E.O. 12958: N/A TAGS: EFIN, ECON, PTER, KTFN, UNSC, OSCE, RO SUBJECT: ROMANIA: SANCTIONS CONFERENCE REVEALS CRACKS IN EU IMPLEMENTATION

1. (SBU) Treasury Department Office of Foreign Assets Control (OFAC) Associate Director John Smith and EconOff attended sessions of a workshop on terrorist financing in Bucharest April 1 and 2. The conference, co-hosted by the United Nations Office on Drugs and Crime, the Organization for Security and Co-operation in Europe, and the Romanian Ministry of Foreign Affairs, featured international legal experts and country representatives discussing the most effective ways to implement sanctions regimes under UN resolutions 1267, 1373, and 1540. A wide cross-section of attendees from 25 countries and nine international organizations participated. The highlight of the workshop was a frank discussion of the limits the European Court of Justice (ECJ) has placed on EU member states' ability to implement sanctions regimes under 1267 and 1373, at least as the ECJ's recent rulings are being interpreted by the European Commission (EC).

2. (SBU) According to Anna Sotaniemi, representing the sanctions team from the EU Directorate General for External Relations, recent court rulings in the Kadi and Al Barakaat cases established that the EU must respect the "right of defense" when implementing 1267 sanctions. The EC is interpreting these rulings to mean that "defendants" must be provided a written statement from the UN sanctions committee at the same time that the EU implements an asset freeze. Sanctioned individuals must also be provided rights of redress and have the ability to challenge the sanctions decision with the ECJ. In a private conversation following her public presentation, Sotaniemi revealed that while the ECJ has not questioned the basis for a 1267 sanctions designation yet, the court has accorded to itself the ability to evaluate the underlying case for sanctions. The ECJ could--in theory--determine that a particular designation under 1267 was inconsistent with EU human rights and order the EC to unfreeze assets. Sotaniemi underscored to EconOff the EC's current view that the UN sanctions committees (particularly the 1267 committee) must produce a narrative summary outlining the reasons for designation at the same time that an asset freeze is announced. Otherwise the EU will be unable to implement the freeze without delay, as required by member states' UN obligations.

3. (SBU) Workshop speakers also noted that EU autonomous sanctions under 1373 are on increasingly shaky legal grounds, following a court decision in the Mujahadeen e-Khalg (MEK/PMOI) case. The ECJ has established the right to review designations proposed by the European Council's sanctions working group. This court review may examine the facts underlying a designation and whether or not the appropriate designation procedure was followed. The ECJ may overturn a designation if human rights are not respected, designation procedures are not followed, or if a judicial review determines the reasons for designating are insufficient. One failing of the 1373 process in the EU, commented on by several presenters, is that until the Lisbon Treaty is implemented, it does not allow the EU to designate and freeze the assets of "internal terrorists," leaving this at the discretion of the individual member states.

4. (SBU) Comment. Romania, like most of the other EU member states, has ceded primary responsibility for sanctions implementation to the European Commission and the European Council. Domestic legislation automatically implements any designation by either body. Domestic designations outside of this framework, while theoretically possible, are so legally and politically complicated that they are almost never attempted. The candid revelation of holes in the EU sanctions implementation regime and the lack of separate legal structures to designate outside of this framework create a worrying gap that designees and potential designees could exploit to evade an international asset freeze. Following this workshop, it appears that the current interpretation of the ECJ rulings by the EC is erecting hurdles to the fight against terrorist financing and is undermining the ability of EU member states to implement their UN charter obligations in a timely manner, as the UN Security Council resolutions require. End Comment.

5. (U) OFAC Associate Director John Smith has cleared this message.

GUTHRIE-CORN