ENGAGING TURKEY ON FINANCIAL CRIME

UNCLAS SECTION 01 OF 03 ANKARA 000464

SIPDIS

SENSITIVE
SIPDIS

TREAS FOR OFAC (RWERNER),FINCEN (MMELANCON),EOTFFC
(POBRIEN) AND (RLEBENSON, JSERAFINI),OIA (JGARDNER)
AND/OR (MLEAVITT)
JUSTICE FOR OPDAT - JSILVERWOOD

E.O. 12958: N/A
TAGS: EFIN KTFN PTER TU
SUBJECT: ENGAGING TURKEY ON FINANCIAL CRIME

REF: A. ANKARA 325


B. ANKARA 250

C. 05 ANKARA 7497

D. 05 ANKARA 7440


1. (SBU) Summary: The U.S. is engaging the Government of
Turkey on multiple fronts to continue strengthening its
regime against terrorism finance and money laundering.
Through diplomatic advocacy and a series of visits and
workshops, the U.S. has highlighted Turkey's need for a
domestic designation system, to pass laws that
definitively criminalize the financing of international
terrorism, and to work together more effectively with
other countries. Altough tangible results from these
efforts will take time, they appear to be paying
dividends. Most recently, key officials are expressing
an interest in pursuing a domestic designation system.
Assigning a Resident Legal Advisor to Embassy Ankara
would also help build Turkish prosecutorial and law
enforcement capacity. End summary.

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GOT Falls Short on Terrorism Finance
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2. (SBU) Turkey's current legal framework is not
equipped to effectively combat financial flows through
Turkey to terrorist groups inside or outside Turkey.
While GOT officials pass on UN and U.S.-designated names
of terrorists to all law enforcement and intelligence
agencies, as well as to financial institutions, Turkish
law does not yet explicitly criminalize the financing of
terrorism. Furthermore, Turkish law defines terrorism
only in terms of attacks on Turkish nationals or the
Turkish state. While Turkey is a member of the Financial
Action Task Force (FATF),it is not fully in compliance
with FATF's special recommendations on terrorism finance.
On the enforcement side, stovepiping of information
within GOT agencies inhibits their ability to work with
each other and to cooperate with other countries.


3. (SBU) Turkey faces a FATF review in late 2006. As
Treasury U/S Levey reminded Turkish Ministers and senior
officials when he visited in June, Turkey will fall short
on many of the FATF special recommendations on terrorism
finance. Since Levey's visit, the GOT submitted to
Parliament in November 2005 the "MASAK law" (named after
the Turkish financial crime intelligence agency that it
seeks to reorganize),which will explicitly criminalize
terrorism finance and offer safe harbor protection for
filers of suspicious transaction reports (STRs). The law
is currently under review by a sub-commission of
Parliament. The Turkish Finance Minister recently told
us he expects it to pass in February (ref A). However,
Parliamentary action on changes in Turkey's criminal code
that would extend the definition of terrorism beyond acts
directly aimed at Turkish interests appears to be
stalled. The reasons for the delay seem unrelated to
this point, but until the definition is expanded, there
will not be a predicate offense that would permit action
against financing in support of international terror
groups.

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Continuing Diplomatic Advocacy
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4. (SBU) The USG has engaged Turkish officials at all
levels to encourage the GOT to strengthen its counter-
terrorism finance (CTF) regime. After earlier missions
by an FSAT team and by a FINCEN official, U/S Stuart
Levey's June visit was an opportunity to urge the
Ministers of Finance and Justice, as well as other senior
officials, to bolster Turkey's CTF regime and to offer
enhanced U.S. cooperation, including the visit of an
interagency team in September. Similarly, former
Ambassador Edelman repeatedly encouraged the GOT to
criminalize terrorism finance and to broaden its overall
definition of terrorism. Post regularly meets with MASAK
President Genc Osman Yarasli and MFA, Justice, and
Interior Ministry officials responsible for terrorism
finance issues to monitor and spur progress. In his
first meeting the Finance Minister Unakitan, Ambassador

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Wilson stressed the importance of Turkey's FATF review
and of the passage of the MASAK law (ref A).

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Vienna Conference is a Wake-Up Call
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5. (SBU) In addition to this policy advocacy, in November
the USG sent three GOT officials to a U.S.- and OSCE-
sponsored conference on terrorism finance in Vienna. One
of the delegates, Recep Guven, Director of the Turkish
National Police (TNP) Intelligence Department's Organized
Crime Division, told us that the Turkish delegation was
particularly interested in an Albanian case study
presented at the conference that showed how a developing
country could be successful in combating terrorism
finance. Guven said that a French representative at the
meeting was critical of several countries, including
Turkey, for not complying with FATF recommendations.
Guven told us that upon his return, he urged Turkish
officials to develop a domestic designation system. He
also noted that attending the conference with MASAK
colleagues improved cooperation and communication between
TNP and MASAK -- cooperation that they hope to
institutionalize with the creation of a TNP terrorism
finance division (ref B).

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Establishing a Resident Legal Advisor Position
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6. (SBU) As Washington has proposed, a Resident Legal
Advisor (RLA) assigned to Embassy Ankara would be
beneficial for several reasons. An RLA could organize
training programs that would enhance the GOT's ability to
effectively investigate and prosecute criminal cases, an
area of technical weakness for Turkish officials. An RLA
could also increase USG engagement with the Turkish
Ministry of Justice in order to find ways to translate
into enhanced cooperation. Jim Silverwood, Regional
Director of the Department of Justice's Office of
Overseas Prosecutorial Development, Assistance, and
Training (DOJ/OPDAT),visited Turkey in November to
propose the creation of an RLA position.

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Treasury Visit Sparks Interest in Designations
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7. (SBU) As a second follow-up to Treasury U/S Levey's
June visit, in December Treasury official Christopher
Burdick made a presentation on terrorism finance
designations to a sizable interagency group of GOT
officials, chaired by MASAK President Yarasli (ref D).
Burdick addressed the rationale behind designations,
international agreements regarding them, and the U.S.
designation system. Yarasli and his colleagues asked
numerous questions throughout the presentation, primarily
focused on the de-listing process and executive branch
officials' legal authority to designate. Following
Burdick's presentation, MASAK Deputy President Ender
Tosun told us that Yarasli is interested in Turkey
developing a domestic designation system.

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Enhanced Role for FIU in Combating PKK
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8. (SBU) In December, an interagency U.S. team held a two-
day round of meetings with GOT officials to discuss
enhanced cooperation against PKK in Europe (ref C). In a
side meeting, Burdick explained to MASAK officials two
ways in which they could use CTF tools against the PKK.
He noted that they could make information requests of
other financial intelligence units (FIUs) to obtain more
specific information about PKK operatives and front
companies. In addition, if Turkey established a domestic
designation system, the GOT could then use intelligence
information to meet the evidentiary standard required for
a designation by either the EU Clearinghouse of by
national designation authorities. MASAK'S Ender Tosun
took the point and noted Yarasli's interest in using
domestic designations to target PKK supporters and front

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groups.

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OPDAT Workshops to Offer Asset Forfeiture Training
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9. (SBU) In another effort to build Turkish AML/CTF
capacity, DOJ's OPDAT will hold three workshops on the
practical application of money laundering and asset
forfeiture investigations and prosecutions. Three two-
day seminars, to be held in Ankara, Antalya, and Istanbul
in late February and early March, will each train 30
prosecutors, investigators, and FIU officials from the
GOT. Participants will be given a case study on money
laundering, which they will work through with assistance
from a U.S. delegation of prosecutors and Drug
Enforcement Administration (DEA) agents. The overall
goal of the program is to provide practical concepts and
methods to effectively address money laundering through
legislation, investigation, and prosecution.

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Comment
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10. (SBU) In addition to our constant policy advocacy,
the series of visits, conferences, and seminars help keep
the GOT focused on strengthening its AML/CTF regime in
the run-up to Turkey's peer review under the FATF,
expected later this year. With the imminent passage of
the law reorganizing MASAK (which also contains key
provisions improving the anti-terror finance regime) and
the continued USG engagement, there is reason to think
that Turkey is slowly making progress in this field, but
we will need to maintain our engagement and support.

WILSON