US embassy cable - 04ANKARA1232

C O N F I D E N T I A L ANKARA 001232 
 
SIPDIS 
 
 
E.O. 12958: DECL: 02/25/2014 
TAGS: EFIN, ETTC, PREL, PTER 
SUBJECT: TERRORIST FINANCE: ANALYSIS OF SITUATION IN TURKEY 
 
 
REF: STATE 37211 03 ANKARA 5579 
 
 
(U) Classified by Deputy Chief of Mission Robert S Deutsch. 
Reasons: 1.4(B), (D) and (E). 
 
 
1.  (C) Summary. Turkey has been unsuccessful in locating 
terrorist assets in its financial institutions or on its 
territory. Post believes that Turkey,s failure is a 
consequence of inherent limitations in Turkey,s anti-money 
laundering and anti-terrorist financing regime. Although Post 
and other interested missions have been working hard to help 
Turkey improve its regime, change is likely to be slow. End 
Summary. 
 
 
2. (C) In Turkey, the asset freeze process is initiated by a 
Department cable, advising Post of the latest terrorist 
financing designations. Post approaches the MFA with those 
names. MFA circulates the names to other ministries and, 
indirectly, to banks, which are required by government decree 
to freeze any assets held in the name of the designated 
person, if the designation originates with UNSCR 1267 (Reftel 
B). However, Post believes that most individuals and 
organizations that are engaged in terrorist activities 
(particularly those likely to be designated by the USG or 
UNSC) are by now well aware of this asset-freezing protocol, 
and rather than transmit assets through accounts maintained 
in financial institutions, they use couriers or the hawala 
system.  And, when they do utilize the banking system, they 
use aliases. 
 
 
3. (C) The protocol adopted by Turkey, as described above, is 
unlikely to produce significant results. In general, it is a 
paper exercise in which GOT merely circulates its freeze 
list. An effective terror finance control requires a robust 
regime for detecting financial crimes (both money laundering 
and terrorist financing), which includes a mechanism for 
reporting suspicious transactions; a means to determine 
whether a particular transaction has a reasonable probability 
of originating in terrorist activity (both through analysis 
and through on-site investigation); and a procedure to freeze 
assets that relate to that transaction and/or the persons 
engaged in that transaction. The Turkish regime is weak in 
these areas, not just for terrorist financing, but also for 
more general money laundering offenses. 
 
 
4. (C) Although MASAK requires suspicious transaction reports 
to be filed both with respect to suspected money laundering 
and with respect to suspected terrorist financing, very few 
suspicious transaction reports are in fact filed. This is 
because Turkish law does not provide safe harbor for filers; 
filers have not been educated about their obligations; and no 
effective compulsion to file exists. (In fact, domestic 
Turkish banks reportedly avoid filing reports because they 
perversely view filing as an admission of the existence of a 
problem.) MASAK (the Turkish financial intelligence unit) has 
little interest in sharing information with, or learning from 
the best practices of, other financial investigation units. 
MASAK analysts have not been trained to identify transactions 
that fit a terrorist financing profile.  MASAK has no 
specific investigative powers, and the police and prosecutors 
(who do have such powers) have been insufficiently trained in 
financial crimes and do not work well together. Turkish law 
does not provide an effective mechanism for freezing assets 
that satisfy a terrorist finance profile (indeed, terrorist 
financing is not even a crime). Responsible elements within 
the GOT have been hesitant to push for such legislation, 
citing Constitutional concerns. One consideration clearly is 
that the GOT is sensitive regarding its still-fragile banking 
system (which is still recovering from a major crisis in 
2001). 
 
 
5. (C) Even after the Istanbul bombings of November 2003, and 
despite constant pressure from Post and other interested 
missions, the GOT has not pursued an aggressive 
anti-terrorist financing regime. An interagency team (State, 
Treasury, Justice) visited Turkey last November, and will 
shortly provide recommendations for improvement. We intend to 
continue to press, at senior levels (e.g., the Minister of 
Finance and Minister of Justice), for development of a more 
effective anti-terrorist financing regime. However, given the 
range of issues (e.g., EU accession, Cyprus, Iraq) with 
Turkey, developing sustained pressure will take time. 
EDELMAN