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Cablegate: Turkey: Interagency Terrorism Finance Meeting

This record is a partial extract of the original cable. The full text of the original cable is not available.

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.

--------------------------
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.

-------------------------
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.

----------------------------
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.

----------
NEXT STEPS
----------

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

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