US embassy cable - 05ANKARA5635

UNCLAS SECTION 01 OF 03 ANKARA 005635 
 
SIPDIS 
 
TREASURY FOR OTI - RLEBENSON AND ASZUBIN 
NSC FOR MCKIBBEN 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EFIN, KTFN, PTER, TU 
SUBJECT: TURKEY: INTERAGENCY TERRORISM FINANCE MEETING 
 
REF: ANKARA 5448 
 
1.  (SBU)  Summary:  In follow-up to Treasury U/S 
Levey's June visit and the subsequent exchange of 
letters regarding Turkey's counter-terror finance (CTF) 
regime, Embassy met with an interagency GOT group on 
September 15.  The focus was on pending legislative 
changes that GOT officials assert will result in a 
dramatic upgrading of in the CTF environment.  Still, 
GOT officials have not grasped the concept of or the 
need for a domestic designation capability, which seems 
to be the most useful focus for the USG assistance 
offered by U/S Levey.  End Summary. 
 
2.  (SBU)  FOLLOWING U/S LEVEY'S JUNE VISIT TO ANKARA, 
AND THE SUBSEQUENT EXCHANGE OF LETTERS ON WEAKNESSES IN 
TURKEY'S ANTI-TERROR FINANCE REGIME, A GOT INTERAGENCY 
TEAM MET ON SEPTEMBER 15 WITH AN INTERAGENCY EMBASSY 
TEAM TO GO OVER THE TURKISH RESPONSE.  THE TURKISH SIDE 
WAS CHAIRED BY GENC OSMAN YARASLI, THE PRESIDENT OF THE 
TURKISH ANTI-MONEY LAUNDERING AGENCY (MASAK), AND 
INCLUDED REPRESENTATIVES OF THE MINISTRIES OF JUSTICE, 
FOREIGN AFFAIRS, AND INTERIOR, PLUS THE TURKISH 
NATIONAL POLICE. THE U.S. SIDE WAS LED BY ECONCOUNS AND 
INCLUDED MULTIPLE AGENCIES AT POST (INCLUDING STATE, 
FBI, DEA, AFOSI).  THE DISCUSSION WAS ORGANIZED 
ACCORDING TO THE SIX AML/CTF DEFICIENCIES IDENTIFIED IN 
LEVEY'S LETTER. 
 
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UPCOMING LEGISLATIVE FIXES 
-------------------------- 
 
3.  (SBU)  YARASLI WENT OVER THE NOW-FAMILIAR DRAFT 
MASAK LAW, WHICH RESTRUCTURES MASAK AND GIVES IT A 
STRONGER MANDATE TO FIGHT TERRORISM FINANCING BY 
EXPLICITLY CRIMINALIZING THE TERRORISM FINANCING AND 
PROVIDING SAFE HARBOR FOR FILERS OF SUSPICIOUS 
TRANSACTION REPORTS.  THE MASAK LAW HAS BEEN SUBMITTED 
TO PARLIAMENT AND WILL BE CONSIDERED ONCE PARLIAMENT 
RETURNS TO SESSION OCTOBER 1.  WITH SO MANY CRITICAL 
PIECES OF LEGISLATION UP FOR CONSIDERATION, ECONCOUNS 
ASKED WHAT SORT OF PRIORITY THE MASAK LEGISLATION WOULD 
BE ASSIGNED AND WHAT WOULD BE THE TIMING.  YARASLI 
COULD NOT GIVE A MORE PRECISE TIMING, BUT SAID HE HAD 
CONVINCED HIS MINISTER (FINANCE MINISTER UNAKITAN) TO 
MAKE THE MASAK LAW A PRIORITY.  (IN A SUBSEQUENT 
MEETING, CHARGE MCELDOWNEY REITERATED TO UNAKITAN THE 
IMPORTANCE OF PASSING THE LEGISLATION QUICKLY, WHICH 
UNAKITAN SAID HE UNDERSTOOD.) 
 
4.  (SBU)  YARASLI ALSO WENT OVER A SET OF PROPOSED 
AMENDMENTS TO THE TURKISH PENAL CODE AND OTHER RELATED 
LAWS THAT HE SAID WOULD BRING TURKISH LAW INTO LINE 
WITH INTERNATIONAL NORMS, IN PARTICULAR BY BROADENING 
THE DEFINITION OF TERRORISM TO INCLUDE INTERNATIONAL 
TERRORISM AND NOT JUST ACTS AGAINST TURKISH CITIZENS OR 
THE TURKISH STATE.  YARASLI SAID DRAFTING OF THIS SET 
OF AMENDMENTS HAD BEEN COMPLETED BY AN INTERMINISTERIAL 
COMMITTEE AND SENT TO THE PRIME MINISTRY BUT THE PRIME 
MINISTRY SENT THE CHANGES TO THE MINISTRY OF JUSTICE TO 
BE FOLDED INTO ONGOING WORK ON TERRORISM-RELATED LAWS. 
THEREFORE, YARASLI COULD NOT BE SURE WHEN THESE CHANGES 
WOULD BE APPROVED IN COUNCIL OF MINISTERS AND SUBMITTED 
TO PARLIAMENT, BUT IN RESPONSE TO EMBASSY'S QUESTION 
CLAIMED THAT THESE AMENDMENTS WERE ALSO CONSIDERED A 
PRIORITY. 
 
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DESIGNATIONS "A LA TURCA" 
------------------------- 
 
5. (SBU) WITH REGARD TO USG CONCERNS ABOUT THE LEGAL 
BASIS ON WHICH TERRORIST ASSETS ARE FROZEN IN TURKEY 
AND BROADER ISSUE OF DESIGNATIONS, MFA DEPUTY DIRECTOR 
GENERAL HUSEYIN BICAKLI WENT OVER HOW THE GOT ACTS ON 
UN 1267 COMMITTEE DESIGNATIONS, IMPLEMENTING ASSET 
FREEZES VIA A DECREE ISSUED BY THE COUNCIL OF 
MINISTERS.  IN ADDITION TO LAW ENFORCEMENT AGENCIES AND 
BANKS, BICAKLI NOTED THAT DISTRICT GOVERNORS (VALIS) 
ARE INFORMED, AS ARE ALL BORDER CONTROL POINTS. 
(ALTHOUGH WE HAVE NEVER SEEN IT AND IT DOES NOT APPEAR 
TO BE PUBLIC INFORMATION, MFA OFFICIALS HAVE TOLD US 
THEY PUT U.S.-DESIGNATED NAMES ON THIS SAME 
DISTRIBUTION LIST.)  THE TURKISH SIDE DID NOT ADDRESS 
THE POTENTIAL OPENNESS OF THE CURRENT SYSTEM TO LEGAL 
CHALLENGE. 
 
6.  (SBU)   BICAKLI AND A JUSTICE MINISTRY COLLEAGUE 
EXPLAINED THAT ASSETS AND ACCOUNTS OF ENTITIES NOT 
IDENTIFIED BY THE UN 1267 COMMITTEE COULD ONLY BE 
FROZEN OR BLOCKED THROUGH A JUDICIAL PROCESS IN WHICH A 
PUBLIC PROSECUTOR SOUGHT AND OBTAINED A JUDGE'S ORDER. 
ECONCOUNS DESCRIBED THE U.S. SYSTEM FOR DESIGNATING 
TERRORIST AND TERRORIST GROUPS THROUGH EXECUTIVE ACTION 
SUBJECT TO JUDICIAL REVIEW.  SPECIFYING THAT WE ARE NOT 
PROPOSING TURKEY COPY OUR SYSTEM, ECONCOUNS ASKED 
WHETHER TURKEY HAD A COMPARABLE SYSTEM TO GENERATE AND 
FOLLOW THROUGH ON DOMESTIC DESIGNATIONS, I.E. A SYSTEM 
FOR IDENTIFYING AND TARGETING FOR RAPID BLOCKING OF 
ASSETS THAT DOES NOT REQUIRE THE SAME EVIDENTIARY 
STANDARD AND THE LONG TIME PERIOD INHERENT IN JUDICIAL 
ACTIONS. 
 
7.  (SBU)  THE ENSUING, SOMEWHAT CIRCULAR CONVERSATION 
MADE CLEAR: A) THAT TURKEY DID NOT HAVE SUCH A SYSTEM, 
B) THAT THE OFFICIALS IN THE ROOM DID NOT GRASP WHAT 
SUCH A SYSTEM WOULD ENTAIL, AND C) THAT THE TURKS ARE 
NOT BUREAUCRATICALLY ORGANIZED TO IMPLEMENT SUCH A 
SYSTEM.  IN A SIDE CONVERSATION, MASAK DEPUTY PRESIDENT 
ENDER TOSUN (PROTECT) ASSERTED THAT GIVEN TURKEY'S 
HISTORY OF ABUSE OF INDIVIDUAL RIGHTS BY THE STATE, THE 
TURKISH PUBLIC WOULD NOT ACCEPT AN ADMINISTRATIVE, NON- 
JUDICIAL MECHANISM FOR FREEZING ASSETS.  IN THE PLENARY 
SESSION, YARASLI ALSO NOTED THE GOT'S DIFFICULTY OF 
FREEZING ASSETS UNDER TURKEY'S CONSTITUTION AND LAWS. 
YARASLI CLAIMED MASAK WOULD START WORKING ON 
DESIGNATIONS PROCEDURES FOLLOWING ADOPTION OF THE 
RELEVANT LAWS, BUT HE AND THE JUSTICE MINISTRY REP MADE 
CLEAR THAT CURRENT GOT THINKING WAS THAT THIS WOULD 
HAVE TO BE DONE THROUGH THE UNWIELDY COURT/PROSECUTOR 
SYSTEM. 
 
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INFORMAL REMITTANCE NETWORKS 
---------------------------- 
 
8.  (SBU)  YARASLI RESPONDED TO POINT IN LEVEY'S LETTER 
ABOUT INFORMAL REMITTANCE NETWORKS BY REPEATING THAT 
SUCH NETWORKS WERE ILLEGAL IN TURKEY.  ONLY BANKS AND 
THE PTT ARE AUTHORIZED TO EFFECT WIRE TRANSFERS AND 
WESTERN UNION-TYPE COMPANIES ARE REQUIRED TO GO THROUGH 
BANKS, SUBJECT TO THE SAME REGULATIONS AND MONITORING. 
WHEN EMBASSY NOTED ANECDOTAL REPORTS OF THE EXISTENCE 
OF SUCH INFORMAL TRANSFERS, YARASLI SAID, IN EVERY 
COUNTRY THERE ARE PEOPLE WHO BREAK THE LAW BUT THAT THE 
AUTHORITIES TRY TO DETER SUCH ACTIVITIES AND HE 
BELIEVED THIS KIND OF ACTIVITY WAS RARE IN TURKEY. 
 
----------------------------------------- 
INTERAGENCY AND INTERNATIONAL COOPERATION 
----------------------------------------- 
 
9.  (SBU)  SINCE THE U.S. LETTER HAD RAISED BOTH 
INTERAGENCY AND INTERNATIONAL COOPERATION, YARASLI 
WONDERED WHETHER THE U.S. WAS IMPLYING THERE WERE 
PROBLEMS IN THESE AREAS.  ECONCOUNS NOTED THAT THE 
ABSENCE OF MONEY-LAUNDERING PROSECUTIONS SUGGESTS THAT 
THERE MIGHT BE ROOM FOR IMPROVEMENT.  YARASLI SAID THAT 
A COORDINATION COMMITTEE WITH 15 MEMBERS, INCLUDING THE 
FOREIGN AND JUSTICE MINISTRIES, THE BANK REGULATORY 
AGENCY, THE CENTRAL BANK, AND MASAK, MET TWICE A YEAR. 
IN REPLY TO A QUESTION ABOUT SECONDING STAFF FROM ONE 
AGENCY TO ANOTHER, YARASLI SAID THIS WAS NOT DONE, 
EXCEPT TO CREATE INTERAGENCY TASK FORCES ON SPECIFIC 
CASES.  NOTE: OTHER AGENCIES, NOTABLY THE POLICE, HAVE 
TOLD US COOPERATION WITH MASAK WAS POOR. ON THE OTHER 
HAND, BY FORCING GOT AGENCIES TO COME TOGETHER TO 
RESPOND, THE U.S. LETTER HAS REINFORCED THE NEED FOR 
INTERAGENCY COOPERATION.  END NOTE. 
 
10.  (SBU)  ON INTERNATIONAL COOPERATION, YARASLI CITED 
MASAK'S COOPERATION WITHIN EGMONT, USING ITS SECURE WEB 
SITE, AND WITHIN FATF.  NOTE: YARASLI HAD PRIVATELY 
GRUMBLED TO ECON SPECIALIST THAT NO OTHER COUNTRIES AT 
THE RECENT EGMONT GROUP MEETING HAD RAISED TURKEY'S 
ANTI-TF DEFICIENCIES, YET USG OFFICIALS SEEM TO DO SO 
WITH REGULARITY.  END NOTE.  YARASLI SAID THE NEW LAW 
WILL ALSO ALLOW MASAK TO ENTER INTO MEMORANDA OF 
UNDERSTANDING WITH OTHER COUNTRIES. 
 
11.  (SBU)  ON SHARING STR'S, YARASLI EXPLAINED THAT 
MANY STR'S ARE FILED WITH MASAK WITHOUT NECESSARILY 
BEING OF INTERNATIONAL INTEREST OR ENTAILING CRIMINAL 
ACTIVITY.  THIS IS WHY MASAK ONLY SHARES STR'S WITH 
OTHER COUNTRIES AFTER EVALUATING THEM. 
 
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NEXT STEPS 
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12.  (SBU)  THE MEETING CONCLUDED WITH REFTEL-DESCRIBED 
OFFER OF ENHANCED COOPERATION AGAINST PKK FINANCE. 
THIS OFFER, COMBINED WITH THE MEETING GIVING THE GOT AN 
OPPORTUNITY TO GO OVER IN DETAIL THE TURKISH REPLY TO 
U/S LEVEY'S LETTER, SEEMED TO CREATE GOODWILL ON THE 
TURKISH SIDE.  THE MEETING CLEARED THE AIR AFTER 
YARASLI'S INITIAL DEFENSIVE REACTION TO U/S LEVEY'S 
MESSAGE. 
13.  (SBU)  IT SEEMS TO EMBASSY THAT THE MOST USEFUL 
AREA FOR THE FOCUSED U.S. ASSISTANCE OFFERED BY U/S 
LEVEY TO HELP PREPARE TURKEY FOR ITS FATF REVIEW IS IN 
THE AREA OF BUILDING AN EFFECTIVE MECHANISM FOR 
GENERATING DOMESTIC DESIGNATIONS OF TERRORIST 
FINANCIERS.  HOWEVER, GOT OFFICIALS HAVE NOT REQUESTED 
U.S. HELP IN THIS AREA AND DO NOT SEEM TO UNDERSTAND 
THEIR NEED FOR IT.  A VISIT OR VIDEO CONFERENCE IN 
WHICH U.S. EXPERTS EXPLAINED THE CONCEPT AND THE BASIC 
ELEMENTS OF A DESIGNATION SYSTEM COULD BE A USEFUL 
FOLLOW UP TO BEGIN TO GET THE GOT TO WORK ON THIS GAP 
IN ITS SYSTEM.  MASAK, AS TURKEY'S FINANCIAL 
INTELLIGENCE UNIT AND A LAW ENFORCEMENT RATHER THAN A 
POLICY-MAKING AGENCY, MAY NOT BE THE RIGHT BUREAUCRATIC 
POINT TO PRESSURE, ALTHOUGH IT HAS THE LEAD ON TURKISH 
PARTICIPATION IN FATF.  POST LOOKS FORWARD TO WORKING 
WITH WASHINGTON AGENCIES TO DEFINE THE MOST USEFUL 
APPROACH. 
MCELDOWNEY