TERRORISM FINANCE 2005 UPDATE NO. 2--TURKEY

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001575

SIPDIS

STATE PASS EB/ESC/TFS (DAVID NELSON),S/CT (TODD KUSHNER),
IO/PSC (JOLEEN SCHWEITZER),EB/EPPD (CAROL THOMPSON),
EUR/SE, TREASURY PASS JUAN ZARATE, OFAC (ROBERT WERNER)

E.O. 12958: DECL: 03/18/2015
TAGS: KTFN KVPR EFIN PTER ETTC PREL
SUBJECT: TERRORISM FINANCE 2005 UPDATE NO. 2--TURKEY

REF: SECSTATE 32688

Classified By: DCM ROBERT S. DEUTSCH FOR REASONS 1.4 (B) AND (D)


1. (U) This cable responds to questions in paragraph 10 of
reftel.

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ASSETS FROZEN FORFEITED OR SEIZED
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2. (C) Since the establishment of the UN consolidated lists
of individuals/entities linked to al-Qaida (AQ),Usama bin
Laden (UBL),and/or the Taliban, there have been three cases
in which the GOT has frozen assets pursuant to UNSCR
Resolutions 1267 and 1373. The actions were taken under
administrative authority. Two of these cases (Yasin Al-Qadi
and Nasreddin Holding Group) are currently being challenged
in Turkey's highest administrative court. MFA officials
requested more background information from the UN on these UN
1267 Committee designees to help support the GOT's case.


3. (C) There are significant weaknesses in Turkey's
anti-terror finance regime. First, terrorism finance is not
yet clearly criminalized in Turkish law and Turkey does not
fully comply with international standards such as the FATF
Special Eight Recommendations to Fight Terrorism Finance.
Second, the GOT has the authority to identify and freeze only
the assets of terrorist individuals and entities designated
by the UN 1267 Sanctions Committee. The GOT has no strong
legal basis for action against non-UN designated individuals
or entities unless they pose a threat to the Turkish State or
Turkish citizens. Finally, the tools that do exist for
locating, freezing, and seizing terrorist assets are
cumbersome and not particularly effective. The GOT is
currently working to improve its internal legal capacity for
fighting terrorism finance by redefining terrorism and
amending its laws to comply with international standards.

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IMPEDIMENTS TO COOPERATION
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4. (C) There are significant impediments to more robust
cooperation with the GOT on co-sponsoring designations.
Though Turkey cooperates with the international community on
terrorism, with the exception of Turkey-specific terrorism
finance, the GOT has not made the fight against the financing
of terrorism a top priority. Turkey is unlikely to
proactively cooperate in designating terrorists with no
specifically Turkish connection.

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TRAINING AND TECHNICAL ASSISTANCE
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5. (C) The GOT has been receptive to USG training and
technical assistance in the past and continues to show a
strong interest in receiving more training and assistance.
The Ministry of Justice and the Turkish International Academy
Against Drugs and Organized Crime (TADOC) are two government
agencies in particular which have recently benefited from
USG-sponsored training and have requested more. In Post's
opinion, the GOT's anti-terrorist finance regime is weak and
could benefit largely from more training in investigating and
prosecuting financial crimes. The GOT's financial
intelligence unit, the Financial Crimes Investigative Board
(MASAK),could benefit from more training on effective FIU
operating procedures, including analytical training.

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RISKS OF TERRORIST FUNDRAISING OR BANKING
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6. (C) The risk that terrorists would raise significant funds
in Turkey is high, as is the risk of terrorists using Turkish
financial institutions to keep or transfer assets. Turkish
banks and foreign exchange dealers are currently used by
narcotics traffickers to transfer money or to wire transfer
cash. Turkish bank offices have also been used to transfer
terrorist funds, such as to Chechen groups, in the past.
There is also sympathy among parts of the population for the
objectives of al-Qaida and similar groups. The terrorists
who attacked UK and Jewish religious targets in 2003 were
Turkish nationals who received financial support from the
al-Qaida network, as well as raising funding locally. The
Banking Regulation and Supervision Agency (BRSA),regularly
conducts bank audits and inspections and each bank has its
own internal inspection team which routinely looks for
suspicious transactions. Nonetheless in 2004 it was revealed
that the Uzan family had embezzled billions of dollars from
Imar Bank which it controlled by keeping many transactions
off the official books. For the reasons mentioned above (in
paragraph 2) and the fact that Turkey is a cash-based economy
whose government has taken no steps to regulate or register
alternative remittance networks, there is very little chance
that terrorist money transiting through Turkey would be
detected.
EDELMAN