Cablegate: Terrorism Finance: Turkey Finally Passes Law On

VZCZCXRO0385
RR RUEHDA
DE RUEHAK #5944 2891413
ZNR UUUUU ZZH
R 161413Z OCT 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 9405
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
INFO RUEHDA/AMCONSUL ADANA 1231
RUEHIT/AMCONSUL ISTANBUL 1468

UNCLAS ANKARA 005944

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR OTI - RLOEFFLER AND JSERAFINI

E.O. 12958: N/A
TAGS: KTFN PTER EFIN ETTC TU
SUBJECT: TERRORISM FINANCE: TURKEY FINALLY PASSES LAW ON
FINANCIAL INTELLIGENCE UNIT

REF: ANKARA 5612

1. (SBU) On October 11, the Turkish Parliament finally passed
the "MASAK Law," long-awaited legislation which the
Government views as the centerpiece of its efforts to
strengthen Turkey's regime against money-laundering and
terrorism finance. The law was intended to improve Turkey's
compliance with the Financial Action Task Force (FATF)
Recommendations. Minister of Finance Unakitan and MASAK
President Yarasli had hoped to enact the law before
parliament adjourned for the summer, so as to have it in
place when FATF's mutual review team was here in September to
examine Turkey's AML/CTF regime. In the event, the team's
mission to Turkey came prior to passage of the law but the
team is still in the process of completing its report. It is
not clear how much the subsequent passage will change the
FATF team's evaluation.

2. (SBU) The legislation restructures MASAK (Turkey's
financial intelligence unit, or FIU) along functional lines
and broadens the types of entities required to follow
know-your-customer rules and file Suspicious Activity Reports
(SARs). The most important reform in the legislation is a
provision that protects filers of SARs from litigation.
Turkey has had a very low number of SARs filed, among other
reasons because bank employees feared litigation.

3. (SBU) Comment: Other actions are needed to strengthen
Turkey's AML/CTF regime so as to comply with FATF
recommendations and UNSC resolutions, such as more effective
cooperation between government agencies, more technical
capacity to investigate financial crimes, creation of a legal
basis with which to freeze assets of designated terrorist
financiers and broadening the legal definition of terrorism
to include international terrorism.

Visit Ankara's Classified Web Site at
http://www.state.sgov.gov/p/eur/ankara/

WILSON

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