U/S LEVEY SEEKS TURKISH COOPERATION AGAINST IRANIAN TERRORISM FINANCE AND NUCLEAR PROLIFERATION

C O N F I D E N T I A L SECTION 01 OF 03 ANKARA 006687

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.O. 12958: DECL: 12/18/2016
TAGS: KNNP PRELEIN KTFN TU IR
SUBJECT: U/S LEVEY SEEKS TURKISH COOPERATION AGAINST
IRANIAN TERRORISM FINANCE AND NUCLEAR PROLIFERATION

REF: ANKARA 6519

Classified By: DCM Nancy McEldowney for reasons 1.4(b) and (d).


1. (C) Summary: In his meetings with the Turkish Foreign and
Finance Ministries, Treasury Under Secretary Stuart Levey
explained U.S. interest in working with allies, within and
outside of the UNSC process, to financially isolate Iran for
its support for terrorism and nuclear weapons program
development. Levey briefed on Iranian abuse of the
international financial system and sought Turkish
cooperation. Turkish officials expressed a desire to
cooperate, asked for more information and undertook to study
U.S. ideas. At the same time they made a distinction between
UN sanctions and other financial measures. End Summary.

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Working with Allies to Target Bad Conduct vs. Whole Nation
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2. (C) Treasury Under Secretary for Terrorism and Financial
Intelligence Stuart Levey, accompanied by the Ambassador, met
with Turkish MFA Under Secretary Ertugrul Apakan December 5
in Ankara. Apakan was joined by Director General for
Security Affairs Hayati Guven and Deputy Director General for
South Asia Babur Hizlan. Levey said the U.S. believes Iran
is pursuing a nuclear weapons program, which violates
requirements set forth by the United Nations Security
Council(UNSC) and stressed that the U.S. is trying to develop
an international consensus to put pressure on Iran, both
within and outside the diplomatic process at the UN. U/S
Levey expressed the U.S. preference to avoid country-wide
sanctions that the international community has used in the
past, such as trade embargoes, because governments and the
private sector can evade them fairly easily, and they impede
upon benign business relationships. If, instead, the U.S.
can persuade its allies to target bad conduct through
targeted financial measures against supporters of
destabilizing policies (such as terrorism and weapons of mass
destruction programs),ultimately the effort will be more
successful. He asked for Turkish ideas and cooperation. The
Ambassador said the spirit of the Levey visit was to consult
with Turkey, and that it was part of a conversation begun by
Ambassador Schulte when he came to Ankara in February. The
Ambassador said the U.S. and Turkey need to focus on
long-term things that Iran is doing -- not just in the
military realm but also in the economic and financial
spheres.

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Alerting Banks to Iranian Risk
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3. (C) U/S Levey mentioned his meetings with Turkish banks
(septel) and explained U.S. thinking on combating Iran's use
of the international financial system to transfer funds to
terrorists and to supply its nuclear weapons program. Levey
described deceptive practices by Iranian entities and banks
and cited the U.S. regulatory action against Bank Saderat.


4. (C) Levey asked whether Turkey had information about the
Islamic Revolutionary Guard Corps (IRGC) increasing its role
in the Iranian economy. Hizlan described the important role
of Bonyads, state-linked foundations. He said that the
Revolutionary Guard's share of Bonyad-controlled business was
increasing but that the Revolutionary Guard did not control
the entire economy. Stating increased USG concern about the
IRGC,s resurgence under Ahmadinejad,s authority, U/S Levey
cautioned that the IRGC,s growing role in the Iranian
economy was not limited to the public sector, but included
the private sector as well. Levey recalled the IRGC,s
interference with two major Turkish-Iranian business deals:

1. the Turkish Company TAV,s contract to service the new
Imam Khomenei International Airport in Tehran, which the IRGC
forcibly cancelled by not allowing any planes to land on the
runway; and 2. the IRGC,s involvement in halting Turkcell,s
deal to provide a competitor telecom network in Iran;
Irancell, Iran,s leading telecom company, is fully owned by
the IRGC and won parts of the telecom replacement contract
along with a South African provider.

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Turks want more Information
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5. (C) Apakan thanked U/S Levey and said Turkey is always
trying to get Iran to act in accordance with international
norms, including on Prime Minister Erdogan's December 3-4
visit to Tehran. Apakan said that they tell the Iranians
that if the UN imposes sanctions, Turkey will comply with
them. Apakan asked for a non-paper they could study. They
were curious about other countries' reactions. Levey said he
had visited the UK, Italy, France, Germany, and Switzerland,
among others. U/S Levey reported that governments have
tended to view a conduct-based approach as more attractive
than their earlier experiences with broad sanctions. He also
noted that the private sector has been receptive because it
does not want to do business with bad actors. Levey described
a general desire in many countries for the U.S. to share
information about the actors who are helping Iran pursue its
nuclear program in violation of existing UN Security Council
resolutions.

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Relationship to UN Action
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6. (C) Hizlan asked how the USG,s approach tracked with the
P5 1 negotiations, which seemed likely to produce
narrowly-targeted sanctions. Levey said that the USG is
working with the UN and desires for that process to be
successful. However, Secretary Rice has conveyed that in
addition to the UN channel, like-minded countries should
discuss cooperative actions that they could take.

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Turkish Economic Concerns
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7. (C) Apakan and Guven said the issue was very sensitive
because Iran was a neighbor and because of the economic
relationship. Hizlan said bilateral trade was expected to
reach $7 billion in 2006, of which roughly $6 billion was oil
and gas imports. He said Iran supplied 30% or Turkey's crude
oil imports and about 15% of its natural gas. Apakan
expressed a desire to cooperate with the U.S. and promised to
study any U.S. proposal, but he made a distinction between UN
sanctions and measures suggested by friendly countries. The
Ambassador pointed out that Levey had not used the word
"sanctions" and urged the Turkish authorities to give serious
consideration to the U.S. ideas.

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Finance Ministry Defers to MFA
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8. (C) U/S Levey met separately with Finance Ministry Under
Secretary Hasan Basri Aktan and Genc Osman Yarasli, the

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President of Turkey's financial intelligence unit, MASAK.
When Levey briefed them on Iranian abuse of other countries'
banking systems, Aktan was interested but largely deferred to
the Foreign Ministry. Aktan said Turkey had long suffered
from terrorism and would view Iran developing a nuclear
weapon as a threat to peace and stability in the region. He
said the Prime Minister had made this point to the Iranians
in Tehran, and he said Turkey had always supported UN
policies. He said he hoped any UN measures would be
effective in preventing Iran from developing nuclear weapons.
Levey supplied a paper on Bank Sepah and a list of companies
facilitating North Korean and Iranian nuclear programs.


9. (C) With both MFA and the Ministry of Finance, Levey also
discussed cooperation against PKK in Europe and Turkey's
anti-terrorism finance regime (septel).

Under Secretary Levey has cleared this message.

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


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