US embassy cable - 05ANKARA3863

S E C R E T SECTION 01 OF 06 ANKARA 003863 
 
SIPDIS 
 
TREASURY FOR OTFI - U/S LEVEY, ASZUBIN AND RLEBENSON 
JUSTICE FOR SUZANNE HAYDEN 
 
E.O. 12958: DECL: 07/05/2014 
TAGS: KTFN, EFIN, PTER, TU 
SUBJECT: TREASURY UNDERSECRETARY LEVEY PRESSES GOT ON WEAK 
TERROR FINANCE REGIME 
 
 
Classified By: Charge d'Affaires Nancy McEldowney for reason 1.4(c). 
 
This is an action request. See para  15. 
 
1.(SBU) Summary:  In a series of meetings June 23, Treasury 
Under Secretary for Terrorism and Financial Intelligence 
Stuart Levey pressed GOT officials on the inadequacy of 
their regime to combat the financing of terrorism. 
Pointing out the likelihood of difficulty for Turkey with 
its upcoming review by the Financial Action Task Force 
(FATF) Levey brought to the attention of apparently 
unwitting Ministers of Finance and Justice just how weak 
their regime currently is.  The two ministers encouraged 
U/S Levey to send them a letter laying out the problems, 
thereby providing a significant opportunity for the U.S. to 
communicate the problems to the ministerial level. Both the 
President of Turkey,s Financial Intelligence Unit (MASAK) 
and the Director General of Police reacted defensively, 
however. In all the meetings, the Turkish counterparts 
emphasized Turkey,s 40 years of experience with PKK 
terrorism 
which has taken an alleged toll of 30,000 people.  Noticably 
absent were references to the November 2003 al-Qaida 
affiliated 
Istanbul bombings which claimed hundreds of lives.  Post 
proposes a draft letter below, on which it 
requests Washington agencies, comments as soon as possible. 
End Summary. 
 
2. (SBU) U/S Levey was accompanied to all meetings by 
Senior Policy Advisor Adam Szubin and Advisor Rachel 
Lebenson as well as Emboffs.  Charge McEldowney 
participated in the two meetings with Ministers. 
 
U/S Levey,s Message: 
-------------------- 
 
3. (SBU) In all the meetings, U/S Levey laid out U.S. 
concerns that Turkey could have serious difficulties with 
its early 2006 FATF review if the authorities did not take 
urgent action.  Specifically, he pointed out that the 
current definition of terrorism was insufficient and out of 
step with the international community; that the 
criminalizing of terror finance and providing protection 
for bank filers of suspicious transaction (included in the 
draft MASAK law recently submitted to parliament) needed to 
be enacted quickly; and that there was room for improvement 
both in Turkish interagency coordination and in 
international information-sharing and cooperation.  Saying 
that the U.S. wants Turkey to be successful, U/S Levey 
noted that the fact that Turkey has yet to successfully 
prosecute a money-laundering case is an indication that 
there is a problem.  U/S Levey did point out that Turkey,s 
record on AML/CFT issues stands in stark contrast to its 
exemplary record on counter-narcotics.  Not only is it 
desirable to have a more effective regime in place for 
its own sake, but an unsuccessful FATF review would be 
an embarrassment for Turkey.  He went on to offer U.S. 
help where possible, and expressed our openness to a 
partnership in pursuing PKK financing, though he 
admitted we are not always successful in convincing 
our European counterparts to be helpful on the PKK issue. 
With terrorist groups in general, and with 
the PKK in particular, U/S Levey made the point that 
understanding the financing mechanisms was useful not only 
to interdict the financing but also to understand the group, 
s network.  On the PKK issue, U/S Levey reminded his 
Turkish hosts that the U.S. has designated the PKK and all 
its aliases as terrorist organizations, making the financing 
of PKK a serious crime in the U.S. and punishable by 
imprisonment. 
 
MFA: Give the Finance Ministry a Blunt Message: 
--------------------------------------------- - 
 
4. (SBU) U/S Levey began his day meeting Foreign Ministry 
officials, who recognized there were problems in Turkey,s 
regime and encouraged U/S Levey to give a tough message. 
Levey met with Deputy U/S Nabi Sensoy (expected to be named 
Ambassador to the U.S.), Director General for Security 
Hayati Guven and Department Head Togan Oral.  Ambassador 
Sensoy provided an overview of legal reforms that are in 
train, in addition to the MASAK law.  Guven said that the 
other legal changes, such as broadening the definition of 
terrorism beyond attacks against Turkish citizens and 
threats to the Turkish State, to better conform to 
international norms, have now been sent by the Prime 
Ministry to other Ministries for comment. 
 
5. (SBU) As MFA officials have done previously, Sensoy 
noted Turkey,s difficulties with asset freezes under UN 
Security Council resolution 1267, given that the 
UN-provided statements of case rarely have sufficient 
evidence to hold up in courts.  As before, the MFA 
officials said the lists need to have more robust 
information attached to them so as to deal with this 
problem.  Note: MFA officials have told us that both Yasin 
Al-Kadi and Nasreddin, whose assets are frozen in Turkey 
are appealing in the courts and could win.  End Note.  In 
response, U/S Levey said other countries are having similar 
problems and the U.S. would like to improve the lists 
system.  He also offered U.S. help on specific names, if we 
have the information. 
 
6. (SBU) Sensoy and the other GOT officials Levey met with, 
raised PKK and lamented that the international community 
did not pursue all terror groups with equal 
aggressiveness.  In particular, Sensoy and the other GOT 
officials decried the passivity of many Western European 
countries in going after PKK support groups in their 
country.  Sensoy said Turkey believes the PKK collects 
about 16 million Euros annually, largely from Germany, the 
Netherlands and Scandinavia.  Sensoy noted his awareness of 
U.S. frustration with European non-cooperation on this 
issue as well.  For this reason, he said Turkey supports UN 
Security Council resolution 1556 which called for studying 
the possibility of broadening 1267 beyond Al-Qaeda- and 
Taliban-linked groups. 
 
Turkey,s Financial Intelligence Unit Reacts Defensively: 
--------------------------------------------- ------------- 
 
7. (SBU) When Levey gave his message to Genc Osman Yarasli, 
the President of MASAK (Turkey,s Financial Intelligence 
Unit,or FIU, which has the lead on combating financial 
crime), the first reaction was defensive.  Yarasli said it 
was not true, and that things are being done.  Claiming 
there was a system in place to combat money-laundering and 
terrorism, Yarasli noted that changes in the international 
standards and conditions had caused Turkey to recognize 
defects in its system and to try to fix these, and Turkey 
was continuously updating its legislation to be compliant. 
Insisting that Turkey was trying to meet the FATF 
recommendations, he said Turkey had drafted a new law 
governing the operations of MASAK , pointing out that FATF 
had changed its recommendations three times since the 1990 
s in addition to adding its 9 special recommendations on 
terrorism finance .  Yarasli said, "we" had wanted the law 
passed before the end of the current session, which ends 
July 1 .  Because of the parliament's heavy agenda, 
however, it now appears that it will not pass until 
parliament returns in the fall.  Yarasli pointed out that 
Turkey has gone through an intense period of activity over 
the past three years, with its whole system changing as it 
meets EU and IMF requirements.  Parliament, therefore has 
had a heavy agenda, including a complete revision of 
Turkey,s 
Penal Code. 
 
8. (SBU) On the specific issue of sharing STRs with other 
countries, FIU,s, Yarasli said MASAK only shared STRs if 
they thought they were related to real criminal activity. 
(Note:  FATF member FIUs normally share all STRs.  End 
Note.)  Yarasli also mentioned MASAK,s project to create an 
online system for filing STRs that would also facilitate 
information-sharing with other agencies, including law 
enforcement.  Yarasli also pointed out that the law would 
change MASAK,s organizational structure to  allow for a 
greater degree of specialization focused on information 
gathering, 
analysis, and international relations.  When U/S Levey asked 
about how bank compliance was monitored, Yarasli explained 
that MASAK lacks authority to inspect banks, and therefore 
relies on the Bank Regulatory and Supervisory Agency,s 
(BRSA,s) sworn bank auditors.  The BSRA only completes a 
review upon MASAK,s request; it does not carry out routine 
AML/CFT evaluations. U/S Levey reiterated that the changes 
in the international environment have been very significant, 
and other countries have already adjusted.  "These are issues 
that are putting constraints on you and others who want to 
stop 
money-laundering."  U/S Levey told Yarasli that he was not 
trying to suggest that nothing was being done, stating that 
he realizes some people in Turkey are working very hard on 
these 
issues.  Instead, the issue is that  changes in the 
international 
environment have been very significant, and other countries 
have 
already adjusted. 
 
9. (SBU) U/S Levey asked Yarasli how the U.S. could assist 
Turkey.  Yarasli said he had not yet discussed this with 
his Minister, but if the MASAK law is not passed until the 
fall, by the time the implementing regulations are in place 
it might be too late for the FATF review.  Yarasli wondered 
whether the U.S. might not support a Turkish request to 
move back the date of the FATF review.  U/S Levey responded 
that the U.S. does not control FATF and thought that the 
FATF deadline was creating useful momentum in Turkey. 
 
Finance and Justice Ministers Say they are Open to Follow-up: 
--------------------------------------------- ----- 
 
10. (SBU) When Levey delivered his message to Finance 
Minister Unakitan, in Yarasli,s presence, it was clear that 
Unakitan was surprised by the extent of the problems. 
Unakitan expressed surprise that there were these problems, 
noting that former Ambassador Edelman had thanked him for 
his help.  (Note: Unakitan is probably referring to one 
case on which Unakitan was ultimately helpful in passing us 
information, but only after months of delay on an 
Al-Qaeda-linked case that was being prosecuted in the U.S. 
End Note.)  Like many GOT officials, Unakitan seemed to be 
under the impression that the new MASAK law would take care 
of deficiencies for the FATF review. U/S Levey made the 
point that beyond passing laws, it was important to 
implement them effectively so they have an effect on the 
ground.  Levey went into some detail with Unakitan about 
the specifics of needed change, while Unakitan  repeatedly 
turned to Yarasli for explanation. 
 
11. (SBU) Unakitan said he would look into these issues 
more carefully, and asked for a list of cases about which 
the U.S. requested information, including from other 
ministries, and the Turkish side had not been cooperative. 
 
12. (SBU) Justice Minister Cemil Cicek, in a shorter 
meeting, had a similar reaction. Like many GOT officials, 
Cicek described Turkey,s long history of suffering from 
terrorism, especially PKK terrorism, and lamented other 
countries, inadequate cooperation, especially in Europe. He 
cited that day,s lead news story: a Belgian court had ruled 
against a further trial of a leftist terrorist who had 
assassinated a prominent Turkish business executive in the 
1990,s.   Cicek noted that there was a different 
relationship with the U.S. on PKK, since the U.S. 
recognizes the PKK as a terrorist organization.  But Cicek 
plead for the U.S. to do more against the PKK in Northern 
Iraq since the recent wave of PKK attacks in Turkey is 
causing loss of life. He specifically asked for U.S. 
cooperation on 150 PKK members in Northern Iraq that the 
GOT would like to have returned to Turkey. 
 
13. (SBU) Cicek, like Unakitan, was open to the U.S. side 
sending a letter noting areas in which we could cooperate 
better, and floated the idea of a follow up meeting which 
could go into these issues in greater depth. 
 
TNP Director General Misunderstands: 
----------------------------------- 
 
14. (SBU) Like Yarasli, Turkish National Police Director 
General Gokhan Aydiner, took a defensive stance about 
Turkey's overall terrorism finance regime (for which he is 
not responsible) despite U.S. law enforcement agencies' 
relatively good cooperation with the TNP.  Aydiner, 
uninformed about the issues Levey raised, said each country 
had its own structures, and it was inappropriate to compare 
"Anglo-Saxon" structures to Turkey, missing the point that 
U/S Levey was referring to FATF--not U.S.--requirements. 
Aydiner, too, asked for specific examples where "we" had 
failed to cooperate with the U.S.  He then offered an 
example of U.S. non-cooperation with Turkey, on the case of 
Uzan family members in the U.S.  (Note: Aydiner is 
unfortunately misinformed on this: U.S. law enforcement did 
cooperate with Turkish counterparts but found no evidence 
the Uzans were in the U.S. End Note.)  On the specific 
issue of cooperation with MASAK, Aydiner claimed the 
interagency coordination was good: "MASAK does the desk 
work, and we do the field work."  Aydiner, too, expressed 
frustration with Belgium over the same case that Cicek had 
cited. U/S Levey tried to break through Aydiner,s defensive 
posture by reiterating the good cooperation we have with the 
TNP, but Aydiner just continued with the same defensive tack. 
TNIO Director Appreciates Visit: 
------------------------------- 
 
15. (S/NF) In a meeting with TNIO Deputy Under Secretary 
Mehmet 
Cemal Ozgoren (DDI equivalent) at the end of the day, U/S 
Levey 
and Ozgoren acknowledged the positive relationship our 
intelligence 
services share with each other.  U/S Levey expressed his 
appreciation 
for the relationship and urged continued cooperation. 
Ozgoren spoke 
at length about Turkey,s long history of suffering from 
PKK-sponsored 
terrorism and identified the cash couriers and a hawala-like 
system as 
the two primary methods for moving money in support of 
terrorism. 
Ozgoren clarified that there is a traditional money transfer 
system, 
used mostly in rural Turkey, whereby foreign workers in 
Europe all send 
money to one person with a bank account in Turkey.  That 
account holder 
then distributes money to the appropriate family members and 
friends. 
Ozgoren claimed that the head of MASAK is his personal friend 
and that 
the new legislation should allow MASAK to carry out financial 
investigations.  Though Ozgoren concentrated mostly on PKK 
terrorism, 
U/S Levey pointed out that the methods used to understand PKK 
support 
networks are the same tools which can be used to investigate 
al-Qaida 
and other terrorist networks.  (Note: This meeting was also 
reported in 
RMAS channel. End Note). 
 
Comment and Action Request: 
--------------------------- 
 
16. (SBU) U/S Levey usefully delivered to senior GOT 
officials a wake-up call on the inadequacy of their terror 
finance regime and the likelihood of problems with Turkey,s 
upcoming FATF review.  The two Ministers, response created 
the first major opening we have had to work intensively 
with the Turks on a policy (as opposed to enforcement). 
To keep up the momentum, Post proposes sending the 
following letter, focusing on the overall regime and how it 
should be strengthened.  Please inform post of any 
Washington comments before Friday, July 8. 
 
Begin Text: 
 
Dear Ministers Unakitan and Cicek: 
 
It was a pleasure for Under Secretary Levey and I to 
discuss cooperation on combating the financing of 
terrorism.  As you requested during our meetings, we 
are writing to lay out specific steps for improvement 
which we believe would make Turkey more effective in 
this area.  As Under Secretary Levey said in our meetings, 
we want to work with you to do everything possible to 
combat the financing of terrorism and, more specifically, 
we want to help ensure the best possible outcome of Turkey, 
s upcoming review by the Financial Action Task Force. 
 
We have tried to make the list below as concise as 
possible. It is not meant to be an exhaustive list but 
rather a summay of measures that could be taken to have a 
more effective regime against terrorism finance. 
 
Based on our understanding of the current situation in 
Turkey, in order to best comply with the FATF 
recommendations on terrorism finance, we would recommend 
that the Turkish authorities: 
 
1.    Put in place as quickly as possible legal 
provisions that criminalize the financing of terrorism and 
allow "safe harbor" for bank filers of suspicious 
transaction reports.  We note that these provisions have 
been included in legislation recently submitted to 
parliament.  If this legislation is not passed quickly the 
implementing regulations may not be in place in time for 
the FATF review, which will require these regulations to be 
in place. 
 
2.    Ensure that Turkish law defines terrorism to 
include terrorist acts directed to other countries and the 
international community.  Until these changes are passed, 
terrorists who have committed terrorist acts unrelated to 
Turkey would not be considered terrorists under Turkish 
law, and therefore could not be prosecuted, nor could those 
who finance them. The current definition of terrorism under 
Turkish law is out of step with international norms. 
 
3.    Strengthen the legal basis on which terrorist 
assets are frozen in Turkey.  Currently Turkey,s freezing 
on the basis of UN resolutions and Council of Ministers 
decrees, could be subject to legal challenge.  Moreover, it 
is narrowly based on Al-Qaeda- and Taliban-linked entities 
rather than all terrorist organizations. The process is 
cumbersome 
and slow, which defeats the point of freezing terrorist 
assets as 
soon as they are identified.  This process should be refined, 
and 
its legal basis made more robust to be able to withstand 
court 
proceedings. 
 
4.    Adopt measures to regulate, license and monitor money 
transfer and informal remittance networks.  (FATF Special 
recommendation 6). 
 
5.    Review and strengthen interagency coordination 
and information-sharing between MASAK, Turkish National 
Police, and prosecutors and all relevant Turkish agencies. 
Better coordination and information-sharing would increase 
the prospects for detection and effective prosecution of 
financial crimes.  To our knowledge, there have been no 
successful prosecutions of money-laundering cases in 
Turkey, which stands in stark contrast to Turkey,s success 
on prosecuting drug-related crimes Better information-sharing 
could increase the likelihood of future convictions. 
 
6.    Review and strengthen coordination and 
information-sharing between MASAK and other FATF countries, 
Financial Intelligence Units (FIUs), and between Turkish 
law enforcement and other countries, law enforcement 
agencies.  For example, not all suspicious transactions are 
shared between MASAK and other FIUs which is contrary to 
best practice among FATF countries. 
 
In order to advance on the issues discussed in Under 
Secretary Levey,s meetings, we propose the following action 
 
SIPDIS 
steps: 
 
--The U.S. Departments of Treasury, Justice and State stand 
ready to be of assistance in providing further 
clarification and sharing our experience and expertise. 
 
--In response to Minister Unakitan,s specific request, we 
have attached an illustrative example of a case in which, 
if the Turkish authorities had had the legal authority and 
institutional capacity to respond on a real-time basis to a 
U.S. request, we would have been in a better position to 
disrupt an international terrorist financing network. 
 
--As Minister Cicek suggested, the Embassy would look forward 
to a meeting with an interagency group of concerned 
Turkish officials to review these matters in greater depth. 
We would look forward to such a meeting in the coming weeks, 
before the end of August. 
 
--With respect to the PKK, as Under Secretary Levey explained 
when he was here, we are willing to support you and 
co-sponsor 
with you actions against the PKK,s financial network in any 
way that we can.  We look to you to lead any initiative on 
this important matter. 
 
Please be assured that we offer these recommendations in 
the spirit of the close friendship and longstanding 
alliance between our two countries, and in the hope that 
these recommendations will help Turkey achieve the best 
possible outcome from its FATF review. 
 
                              Sincerely, 
 
 
                              Nancy McEldowney 
                              Charge d,Affaires 
 
 
His Excellency 
Kemal Unakitan, 
            Minister of Finance, 
                  Republic of Turkey, 
                        Ankara. 
 
His Excellency 
      Cemil Cicek, 
            Minister of Justice 
                  Republic of Turkey, 
                        Ankara 
 
 
Copy to: 
 
Gokhan Aydiner, Director General, Turkish National Police 
Genc Osman Yarasli, President, MASAK 
Ambassador Nabi Sensoy, Ministry of Foreign Affairs 
 
End Text. 
 
U/S Levey has cleared this message. 
 
MCELDOWNEY 
 
MCELDOWNEY