US embassy cable - 03ANKARA2661

C O N F I D E N T I A L ANKARA 002661 
 
SIPDIS 
 
 
SENSITIVE 
 
 
STATE FOR EB/ESC, EUR/SE, NEA/RA, AND TREASURY 
(BFOX/JZARATE/WMURDEN) 
 
 
E.O. 12958: DECL: 4/24/2006 
TAGS: ECON, ETTC, EFIN, TU, IZ 
SUBJECT: FREEZING IRAQI ASSETS: INITIAL TURKISH RESPONSE 
 
 
REF: STATE 101736 
 
 
1. SUMMARY: (C) On April 24, we delivered reftel demarche to 
Central Bank Governor Sureyya Serdengecti and Banking 
Regulation and Supervision Agency (BRSA) Acting Chairman 
Ibrahim Canakci.  Both officials said they would make this a 
top priority and welcomed any information or assistance. 
Serdengecti welcomed the USG delegation of experts as well. 
END SUMMARY. 
 
 
2.  (C) Serdengecti told us he would make investigation of 
Iraqi assets a top priority.  The Central Bank monitors 
electronic bank transfers and gets other information on bank 
transfers.  He also welcomed a U.S. delegation visit. 
"Exchanging information is always beneficial.  We learn from 
them, they learn from us.  It's a great idea," Serdengecti 
said.  Serdengecti explained that, while the Central Bank can 
search for records of Iraqi assets, freezing those assets in 
Turkey would be the responsibility of the Ministry of Finance 
(visit is planned for April 25 - septel). 
 
 
3.  (C) Serdengecti said he suspected there were still 
existing Turkish-Iraqi private sector links, recalling 
requests by Turks to exchange huge amounts of Kuwaiti dinars 
after the Iraqi invasion of Kuwait in 1990.  But Serdengecti 
also noted the Saddam regime may have been reluctant to 
deposit money in Turkey, given the claims of Turkish 
exporters to Iraq, which date back to before the first Gulf 
War.  They amount to $1.2 billion in non-payments, beginning 
during the 1980's, when GOI and Iraqi businesses did not pay 
Turkish exporters during the Iran-Iraq War.  Under an 
agreement between the GOT and the Saddam Hussein regime, the 
GOI was supposed to reimburse the Treasury, which in turn was 
reimbursing the exporters.  Serdengecti said that all 
payments from the GOI ended just prior to the first Gulf War 
(Treasury was the loser, as it reimbursed exporters the full 
amount.) 
 
 
4.  (C) Earlier April 24, BRSA Acting Chairman Ibrahim 
Canakci told us the BRSA's sworn bank auditors would be 
alerted to this request.  He also welcomed any information or 
assistance the U.S. could offer. 
PEARSON