US embassy cable - 05ANKARA2916

UNCLAS ANKARA 002916 
 
SIPDIS 
 
TREASURY FOR OFFICE OF TERRORISM AND FINANCIAL INTELLIGENCE 
- DGLASER 
DEPARTMENT FOR H FOR SENATOR SHELBY 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: KTFN, EFIN, TU 
SUBJECT: TERRORISM FINANCE-TURKEY SCENESETTER FOR CODEL 
SHELBY 
 
 
1.(SBU) I am glad you and your delegation are taking the 
time to visit Turkey and to look into the issue of terrorism 
financing.  This is an important issue because Turkey's 
regime to combat the financing of terrorism remains weak and 
not in compliance with international standards.  The 
financing of terrorism is not yet explicitly criminalized, 
nor are bank employees that report suspicious transactions 
free from liability.  Although the laws are in the process 
of being changed, progress is very slow and there seems to 
be no leadership from the top.  Beyond the legal framework, 
Turkey's ability to be effective in the fight against 
financial crime is hampered by lack of expertise and poor 
interagency coordination. 
 
Current Legal Regime: 
-------------------------- 
 
2.(SBU) Turkey's current legal regime is inadequate to 
effectively combat the financing of terrorism. The Turkish 
authorities willingly pass on UN and U.S.-designated names 
of terrorists to all law enforcement and intelligence 
agencies, as well as to financial institutions, and have a 
system for banks to file suspicious transaction reports. 
However, Turkish law defines terrorism only in terms of 
attacks on Turkish nationals or threats against the Turkish 
state.  Moreover, the financing of terrorism has yet to be 
explicitly criminalized.  In order to be able to block UN- 
designated terrorist assets, the authorities have relied on 
a legally-questionable system of decrees which could be 
challenged in court.  Indeed, two of the three cases in 
which UN-designated assets have been frozen in Turkey are 
under legal challenge, a challenge which some Government 
officials believe may be successful. 
 
3.(SBU) The enforcement system for designated names is also 
lacking.  Banks receive the distributed names but bank 
employees who file suspicious transaction reports could be 
sued and this may explain why the number of reports filed is 
very low compared to other countries. 
 
Upcoming Reforms: 
----------------------- 
 
4.(SBU) Thanks largely to prodding from the U.S. and the 
U.N., and the imminence of an upcoming review by the 
Financial Action Task Force (FATF), the Turkish authorities 
began over a year ago to work on reforming their legal 
framework.  On the one hand, an interagency committee has 
drawn up changes to Turkey's penal code that would bring 
Turkey into line with international norms: criminalizing 
terrorism finance and broadening the definition of terrorism 
to include international terrorism.  Although the committee 
has finished its work, if past legal reforms are any guide, 
these reforms could take months or years to be enacted 
unless the senior leadership makes this issue a priority. 
 
Institutional Weakness: 
--------------------------- 
 
5.(SBU) Beyond the legal regime, Turkey's ability to combat 
terrorism finance is hampered by the weakness of the 
financial intelligence unit (known by its Turkish acronym, 
MASAK), by a broader lack of expertise in investigating 
financial crimes, and by poor interagency coordination.  A 
new law to reorganize and strengthen MASAK has recently 
begun to be considered by parliament, but it is not clear 
how much real effect this will have. 
 
The U.S. Message: 
----------------------- 
 
6.(SBU) In your meetings here, Minister of Finance Unakitan 
and other Turkish officials are likely to tell you they have 
an effective regime and are in the process of plugging the 
loopholes.  Nevertheless, we do not believe that senior 
Turkish leaders have made it a priority to strengthen their 
anti-terror finance regime, despite the November 2003 
Istanbul bombings.  Your visit provides an excellent 
opportunity to remind senior Turkish officials of the need 
for their leadership, emphasizing U.S. and international 
community interest in Turkey strengthening its anti-terror 
finance regime.