TERRORISM FINANCE: U/S LEVEY MEETINGS IN ANKARA

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 000074 SIPDIS SIPDIS TREASURY FOR OTI JSERAFINI AND RLOEFFLER E.O. 12958: DECL: 01/16/2017 TAGS: KTFN PTER EFIN ETTC TU SUBJECT: TERRORISM FINANCE: U/S LEVEY MEETINGS IN ANKARA REF: 2006 ANKARA 6687 Classified By: Economic Counselor Thomas Goldberger 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 pointed out how better use of counterterrorism finance tools could help Turkey elicit stronger European cooperation against PKK. Turkish MFA expressed satisfaction with U.S. cooperation against the PKK in Europe. On the Yasin al-Qadi case, the head of Turkey's FIU argued (disingenuously) that the assets were still frozen thanks to the Government's appeal. End Summary. -------------- U.S. Court Decision on PKK -------------- ¶2. (C) On December 5, U/S Levey met separately with the Turkish Foreign Ministry and Finance Ministry Under Secretaries. In the MFA meeting that largely centered on SIPDIS Iran issues (reported septel),MFA Director General for Security Affairs Hayati Guven asked about the recent court ruling in California on terrorist designations. U/S Levey stressed that the court decision will not stop the Administration from freezing the assets of any PKK individual or entity that we designate. Nor will it alter the PKK's status as a terrorist organization in the U.S. ¶3. (C) He went on to explain that the case was quite technical: the judge struck down one criteria for designation, when an individual or group are "otherwise associated" with a terrorist group. Saying that Turkey was trying to decide whether to file an amicus brief, Guven asked whether the U.S. Administration will appeal. U/S Levey said there had been no decision yet but that they might only appeal the part of the ruling that challenged the President's authority to designate. -------------- PKK in Europe -------------- ¶4. (C) Guven expressed satisfaction with U.S. cooperation against the PKK in Europe. Although the results have not been spectacular, he said "we have to continue," and that it was important that the U.S. supported Turkey on this issue. ¶5. (C) U/S Levey pointed out that Turkey could accomplish more in approaching this issue through better use of terrorism finance tools. In the Finance Ministry meeting, U/S Levey put cooperation between U.S. and Turkish Finance Ministries against PKK in the broader context of cooperation against all forms of terrorism. Finance Ministry Under Secretary Hasan Basri Aktan agreed, saying there is no such SIPDIS thing as "my terrorism and your terrorism -- there is only one terrorism." U/S Levey said the two ministries could work together to designate individual PKK operatives in Europe. Citing her expertise as a prosecutor of money laundering and terrorism finance cases, U/S Levey also urged the Finance Ministry officials to work with Resident Legal Advisor Suzanne Hayden on these issues. -------------- MASAK Law -------------- ¶6. (SBU) U/S Aktan expressed the Government's pride in having secured Parliamentary passage of the "MASAK law," which explicitly criminalized terrorism finance and provided safe harbor for filers of suspicious transaction reports. Aktan said MASAK had been conducting extensive training programs for bankers to familiarize them with the new law and had substantially upgraded its information technology. With all these changes, Aktan said MASAK was now ready to step up international cooperation. ¶6. (C) While commending Turkey for passing the law, U/S Levey deferred to the FATF peer review on the effectiveness of the AML/CTF regime. He asked about the definition of terrorism finance, since he understood it to be limited to financing terrorist acts as opposed to any financing of a terrorist organization. Genc Osman Yarasli, President of MASAK, Turkey's anti-money laundering agency which is also Turkey's financial Intelligence unit, claimed that this was a misunderstanding based on a faulty translation of the law into English. It would be corrected in Turkey's December 15 reply to the draft FATF evaluation. ANKARA 00000074 002 OF 002 -------------- Yasin al-Qadi -------------- ¶7. (C) U/S Levey said the pinnacle of international cooperation against terrorism finance is the UN 1267 process. He expressed U.S. surprise at the Turkish Government's position on the Yasin al-Qadi designation: "If the Government believes he doesn't belong on the list, it should apply to the UN." U/S Aktan was clearly not familiar with the case. He deferred to the MFA but reiterated the Government's strong commitment to combat the financing of terrorism. ¶8. (C) Yarasli said Parliamentary passage of the MASAK law, a law he said had been in the works for ten years, demonstrates the Government's determination to combat money laundering and terrorism finance. On the al-Qadi case, Yarasli pointed out that the assets were still frozen and the Council of Ministers decree was still in effect: "there is no deficiency in the system." He said the important thing was the result and that it was thanks to the government's efforts that the assets were still frozen. Comment: While technically not false, Yarasli's assertion that the Government's actions kept the assets frozen is disingenuous: he omitted the government's efforts to withdraw its appeal. End Comment. -------------- Definition of Terrorism -------------- ¶9. (C) U/S Levey expressed surprise that Turkey had not internationalized its definition of terrorism despite Finance Minister Unakitan having promised such a change in his 2005 response to U/S Levey's letter on AML/CTF issues. Yarasli admitted the limited scope of the law. Aktan deferred to the Ministry of Justice which has the lead on the issue and promised to pass on U/S Levey's comments. This message was cleared by U/S Levey. Wilson Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON