Tim W Hayes  01/23/2008 02:11:32 PM  From  DB/Inbox:  Search Results

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C O N F I D E N T I A L        NICOSIA 01813

SIPDIS
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    ACTION: POL
    INFO:   CONS TSR ECON DCM AMB MGT DAO RAO FCS PA PMA

DISSEMINATION: POLX /1
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VZCZCAYO398
PP RUEHAK
DE RUEHNC #1813/01 3190629
ZNY CCCCC ZZH
P 150629Z NOV 05
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5099
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 06 NICOSIA 001813 
 
SIPDIS 
 
E.O. 12958: DECL: 11/11/2015 
TAGS: PGOV PREL EAID ECON KCRM EFIN PTER KHLS CVIS
KNNP, TBIO, PHUM, EAIR, CY 
SUBJECT: DOING MORE WITH TURKISH CYPRIOTS ON ISSUES OF 
VITAL US INTEREST 
 
REF: A. STATE 201996 
     ¶B. 04 STATE 113612 
 
Classified By: CDA Jane Zimmerman, for reasons 1.4 (b) and (d). 
 
¶1. (C) SUMMARY.  The United States policy of supporting 
economic development in the Turkish Cypriot community has an 
important role to play in support of a resolution of the 
Cyprus problem -- however, closer cooperation with the 
Turkish Cypriots can also help advance other issues of 
broader national interest.  The porous Green Line dividing 
Cyprus represents a backdoor into the EU -- and the rest of 
the West -- for illegal immigration, infectious disease, 
trafficked persons and drugs, theft of intellectual property, 
and possibly terrorists and WMD material.  For political 
reasons, the GOC is unwilling to cooperate with Turkish 
Cypriot authorities in the fight against such global threats, 
while the Turkish Cypriots are unable to take meaningful 
action on their own because of the poorly trained, 
underequipped, and underfunded institutions of their 
unrecognized "state."  The largely secular community in the 
north offers an opportunity to reinforce support for moderate 
Muslims.  In her October 28 (ref a) meeting with Turkish 
Cypriot leader Talat, the Secretary highlighted the U.S. 
interest in helping build institutions and capacity in the 
Turkish Cypriot community.  In this cable, Post proposes 
several specific measures in response to the Secretary's 
call, which in our view will: 1) boost the ability of the 
Turkish Cypriots to support U.S. efforts to fight against key 
global threats that have an impact on U.S. security 
interests, 2) help prepare the Turkish Cypriots to be full 
partners in a United Cyprus, and 3) complement our already 
excellent cooperation with the Republic of Cyprus in these 
areas.  END SUMMARY. 
 
ADVANCING A CYPRUS SOLUTION, ADDRESSING GLOBAL THREATS 
--------------------------------------------- --------- 
 
¶2. (C) Since the 2004 Deputies Committee decision authorizing 
assistance to the Turkish Cypriots (ref b), the U.S. has 
pursued a policy of supporting the economic development of 
the Turkish Cypriot community -- to help reward and reinforce 
the strong Turkish Cypriot support for the UN-sponsored 
Cyprus settlement plan, and in line with the UNSYG's call to 
ease the international isolation of the north.  U.S. efforts 
so far have included the $30.5 million Cyprus Partnership for 
Economic Growth (CyPEG) program (designed to facilitate a 
Cyprus settlement by reducing economic disparities between 
the two communities), an end to ratios that disadvantaged 
Turkish Cypriot students in U.S.-funded scholarships, and a 
more sustained political dialogue including meetings between 
Secretaries Rice and Powell and community leader Mehmet Ali 
 
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Talat.  Cooperation with the Turkish Cypriots has remained 
limited, however, by sensitivities over dealing directly with 
a "government" the United States does not recognize. 
 
¶3. (C) There are nonetheless issues of vital interest to the 
United States in which closer cooperation with Turkish 
Cypriot authorities is critical.  The porous Green Line, 
which divides the island of Cyprus, represents the de facto 
eastern frontier of the European Union.  The Republic of 
Cyprus is unable to exercise control over the northern third 
of the island, and unwilling for political reasons to 
cooperate with the Turkish Cypriots who do.  As a result, the 
north constitutes a back door into the West for illegal 
immigrants, drugs, criminals and terrorists -- while Turkish 
Cypriot institutions are woefully under-prepared to deal with 
transnational issues such as terrorist finance, WMD 
proliferation, intellectual property protection, and 
infectious disease. 
 
¶4. (C) In his October 28 meeting with the Secretary, Turkish 
Cypriot leader Mehmet Ali Talat expressed not only a desire 
to work toward a settlement of the Cyprus problem, but also a 
willingness - without asking for recognition of the "TRNC" - 
to work with the United States more closely on more global 
issues that are of concern both to the U.S. and the two 
communities on Cyprus.  The Secretary, in turn, said the USG 
would look into additional ways to build institutions and 
capacity in the Turkish Cypriot community.  In light of this 
directive from the Secretary, this paper sets forth 
additional, specific capacity-building initiatives for the 
Turkish Cypriots that would serve broader U.S. interests. 
 
PROTECTING EQUITIES: FRAMING NEW USG INITIATIVES 
--------------------------------------------- --- 
 
¶5. (C) Several of the steps outlined below are certain to 
draw serious criticism from the Government of Cyprus, whose 
hypersensitivity over dealings with the Turkish Cypriots 
prompts vehement GOC opposition to any initiatives they feel 
might represent a precursor to recognition of the "TRNC."  We 
would have to proceed carefully to ensure that new USG 
initiatives do not do more harm than good by causing the GOC 
to restrict its own cooperation with us on vital issues such 
as border security, drug interdiction, terrorist finance, and 
infectious disease. 
¶6. (C) Our overarching message in proposing the initiatives 
listed below is that they address problems that pose a threat 
to the United States, the EU, as well as both communities on 
Cyprus, and are therefore in the interest of the GOC to 
support.  Eventually, any capacity-building investment in the 
Turkish Cypriot community will pay off for the Greek Cypriots 
- either today, by addressing current transnational problems 
that do not stop at the Green Line, or in the future, when 
Turkish Cypriots take their place as partners in a United 
Cyprus.  This is a message we will need to reinforce 
continually with the Cyprus government, as well as with media 
and other audiences; it is important to make the case to both 
communities that our measures are practical, not political. 
 
¶7. (C) On a more mundane level, the GOC,s desire to qualify 
for the Visa Waiver Program may give us some leverage here, 
since VWP participation requires effective security 
cooperation.  GOC moves to retaliate against or limit U.S. 
efforts in this area would raise significant problems for 
Cyprus's VWP participation.  At the same time, the United 
States should avoid controversy wherever practicable by 
continuing to funnel training and other support though 
Turkish Cypriot NGO cut-outs (such as the Turkish Cypriot 
Banks Association or Chambers of Commerce and Industry) or 
through outside contractors (as we are doing with CyPEG) to 
avoid conferring unnecessary symbolic legitimacy on "TRNC" 
institutions.  The State Department -- by programming 
assistance through INL, for example -- could also provide a 
degree of political insulation for agencies such as DEA or 
FBI, protecting their valuable day-to-day relationship with 
the GOC from political fallout.   We should also seek 
opportunities to partner creatively with others working to 
build capacity in the north (especially the UK), thereby 
diluting criticism leveled against us and getting more bang 
for the buck. 
 
BITE THE BULLET, BUT KEEP BALANCED WITH THE SOUTH 
--------------------------------------------- ---- 
 
¶8. (C) In some instances, however, direct and unilateral 
contact with Turkish Cypriot authorities will be unavoidable, 
especially when dealing with issues of law enforcement, 
border security, and public health.  In such cases, we should 
be prepared to accept public criticism as the cost of 
protecting vital U.S. interests -- and frankly, vital EU and 
Greek Cypriot interests as well. 
 
¶9. (C) Over the long term, however, the best way to ensure 
our programs in the north do not cripple our cooperation with 
the GOC will be to press ahead with balanced, creative 
initiatives in the south as well.  Cyprus was the first EU 
state to sign a PSI Shipboarding Agreement with the U.S., 
cooperated closely with FinCEN in the fight against money 
laundering, and has been an eager recipient of EXBS training 
and material assistance.  The U.S. must keep the Greek 
Cypriots on side by offering more resources and financing 
more training, including money laundering/terrorist finance 
and IPR enforcement, to ensure that our cooperation with the 
GOC continues.  Our final goal should be for both sides to 
have the willingness and the capability to cooperate 
effectively with us -- and eventually each other -- on issues 
of global concern. 
 
SPECIFIC PROBLEMS, SPECIFIC INITIATIVES 
--------------------------------------- 
 
¶10. (C) Terrorism Finance/Money Laundering. 
 
Turkish Cypriot authorities lack the legal and institutional 
framework to meet minimum international standards with regard 
to combating money laundering and terrorist finance.  The 
north's 23 casinos, 18 offshore banks, and several hundred 
currency exchange points are largely unregulated, and several 
worrying cases have been reported.  According to UK sources, 
significant amounts of illicit proceeds from 
Afghanistan-Turkey-UK drug smuggling operations are being 
laundered through north Cyprus.  The Treasury Department has 
announced its intent to designate one Turkish Cypriot 
offshore bank as a "Financial Institution of Primary Money 
Laundering Concern."  One on-shore bank was until recently 
reportedly controlled by a German organized crime figure, 
while another has allegedly been receiving proceeds from 
internet fraud schemes carried out in the U.S.  Meanwhile, 
there is unconfirmed press speculation that Al Qaida could be 
using the Turkish Cypriot financial system. 
 
The USG has undertaken several steps so far to address these 
problems, including: 
 
-- Using CyPEG resources to train the Banks Association (an 
NGO) on Know Your Customer rules and basic anti-ML/TF 
procedures. 
-- Sending a visiting FinCEN official to the north for an 
informal seminar with Turkish Cypriot regulators (December, 
2004).   FinCEN has also provided informal advice on major 
shortcomings in current money laundering legislation. 
 
-- Providing the Turkish Cypriot "Central Bank" with all U.S. 
designation of individuals/entities as terrorists under E.O. 
13224, which the Central Bank distributes to both on-shore 
and offshore banks. 
 
-- Working, through IRS London, with the UK Treasury to 
provide informal advice/assistance in support of "Ministry of 
Economy" efforts to draft a new anti-money law, including the 
establishment of a Financial Intelligence Unit. 
 
-- Raising the importance of money laundering/terrorist 
financing with officials and bankers in the north. 
 
Nonetheless, we can do much more, including: 
 
-- Cooperate more closely to complement UK efforts in the 
area of Terrorist Finance.  (The UK has a 50,000-pound 
sterling program to help the Turkish Cypriot authorities 
improve their financial control measures, and is providing 
advice on the drafting of a new casinos law.) 
 
-- Provide additional training (both in Cyprus and the U.S.) 
on terrorism finance to the "Central Bank" and "Ministry of 
Finance," which oversees the offshore banks. 
 
-- Assist Turkish Cypriots in developing a package of 
amendments to other legislation that will complement and 
reinforce the draft money laundering and casino law. 
 
-- Work with the judiciary, regulators, and law enforcement 
to improve their ability to investigate, prosecute and 
adjudicate money laundering/terrorist financing cases, which 
currently languish because investigators are unfamiliar with 
financial issues or due to a lack of international 
cooperation. 
 
-- Share U.S. law enforcement information pertaining to 
suspected activities involving entities in north Cyprus with 
Turkish Cypriot "officials." 
 
¶11. (C) Border Security and Counterproliferation Cooperation. 
 
The question of political recognition has severely restricted 
the ability of the U.S., EU, and others to provide help to - 
or engage in direct cooperation with - Turkish Cypriot 
police, customs and border authorities.  As a result, almost 
no steps have been taken to address the proliferation and 
border security concerns, which the north's poorly trained, 
poorly equipped authorities are unable to handle alone. 
Embassy Nicosia's EXBS program recommends the following 
training, for which EXBS funding is already largely available: 
 
-- Contraband Enforcement Team Training (CET) for select 
groups of Turkish Cypriot customs officers, with a goal of 
establishing a standing Contraband Enforcement Team. 
 
-- Basic WMD Inspectors Workshop, provided by DHS, CBP for 
Turkish Cypriot customs officers in basic inspection 
techniques, use of specialized equipment, and familiarization 
with export control enforcement. 
 
-- Basic Integrated Export Control and Border Security 
Training (BIECBS) conducted by DHS, CBP for all Turkish 
Cypriot agencies involved in export control and border 
security, which would demonstrate methods, techniques, and 
practices necessary for a cohesive export control and border 
security system.  This system would eventually coordinate the 
efforts of all agencies involved in export control and border 
security.  At the outset, however, such training would 
provide Turkish Cypriot "officials" guidance on establishing 
units responsible for enforcement, intelligence, targeting, 
investigations, and prosecutions in the area of 
nonproliferation. 
 
-- WMD Basic Course, provided by DOD/DTRA, ICP, to give 
Turkish Cypriots an overview of the WMD threat and 
enforcement techniques. 
 
-- WMD Criminal Investigations Course, provided by DOD/DTRA, 
ICP to introduce police and customs to techniques for 
investigating WMD and nonproliferation violations. 
 
Similarly, the Turkish Cypriot authorities could make 
immediate use of the following nonproliferation-related 
equipment, for which DOE funding could be made available: 
radiation portal monitors for the ports of Famagusta and 
Kyrenia and for Ercan airport; basic Inspectional Tool Kits; 
radiation pagers; Contraband Detection Kits; X-Ray Equipment 
to examine ferry passenger luggage, a pallet X-Ray system for 
Ercan Airport. 
 
Finally, EXBS proposes the following assessments to gauge 
better deficiencies in the north's border security and 
recommend further areas for training and assistance: 
 
-- Port Assessment, conducted by a short-term EXBS advisor (a 
U.S. Customs Inspector), of Famagusta and Kyrenia.  The TDY 
advisor would spend 30 days evaluating the procedures 
employed by Turkish Cypriot Customs at the two ports, and 
assist "authorities" in establishing a Targeting and Risk 
Management Unit. 
 
-- Enforcement Assessment, conducted by a short-term EXBS 
advisor (special agent), focusing on enforcement entities and 
establishing a coordinated protocol for responding to WMD 
seizures and conducting non-proliferation investigations. 
 
-- Legal Assessment, to evaluate existing legal structure and 
help develop a legal framework for export controls.  A TDY 
team, consisting of an Assistant US Attorney (AUSA) and a 
Federal Judge, would conduct a five-day assessment to analyze 
the current laws and prospective legislation, and to conduct 
interviews with prosecutors and members of the judiciary, 
along with those who work in conjunction with the legal 
system.  The assessment will provide the foundation for the 
Turkish Cypriots to establish a legal framework for export 
control law and regulations.  The assessment would also bring 
Turkish Cypriot prosecutors and judges together to foster 
judicial system support for the creation of a legal framework. 
 
¶12. (C) Cooperation Against Drug Trafficking. 
 
In addition to causing counterproliferation concerns, the 
north's weak law enforcement capacity also creates a 
significant opening for drug trafficking.  Post DEA, either 
directly or with INL funding and assistance, recommends: 
 
-- Sponsoring Turkish Cypriot participation in the 2-week 
Basic Investigators Course. 
 
-- Providing 1-week Asset Forfeiture and Money Laundering 
Training to bankers, banking regulatory officials, police, 
prosecutors, and other court officials. 
 
-- Providing Operation Jetway training in the U.S. for 2-4 
police officers (1 week) to enhance airport security and 
anti-smuggling training. 
 
-- Providing the $35,000 network computer requested by 
Turkish Cypriot police to support a database that would help 
track criminal organizations and support a new criminal 
intelligence arm within the police force. 
 
¶13. (C) Avian Influenza & Other Infectious Diseases. 
 
The north's underdeveloped "state" infrastructure seriously 
compromises its ability to monitor and combat transnational 
health threats, especially infectious diseases such as avian 
flu.  This problem is aggravated by the peculiar politics of 
Cyprus, in which the GOC refuses all cooperation, for 
political reasons, with officials of the "TRNC."  While 
making clear that direct training for employees of the "TRNC" 
does not constitute recognition, we should explore ways to: 
 
-- Have NIH or CDC specialists train Turkish Cypriot doctors 
and public health officials in techniques to monitor, 
diagnose, and combat communicable diseases. 
 
-- Support Turkish Cypriot contingency planning efforts and, 
as required, serve as a channel of communication between 
Turkish Cypriot authorities and other countries or 
international health institutions. 
 
-- Offer material assistance as required in the form of 
medicine, supplies or equipment to help monitor, diagnose, 
and combat the spread of avian flu. 
 
¶14. (C) Trafficking in Persons. 
 
The north continues to be a significant destination for 
trafficked persons, and the "TRNC,s" thriving sex industry 
in the form of "night clubs" and "cabarets" poses a 
significant TIP problem.  TIP is also a major concern in the 
south.  Turkish Cypriot "officials" have shown a willingness 
to cooperate in the combat against TIP by addressing 
deficiencies in their legal framework, conducting workplace 
and health inspections, and offering better support and 
educational services to women employed in clubs.  The U.S. 
should continue to encourage both Turkish Cypriots and Greek 
Cypriots to make further progress along these lines, 
providing advice and training through our bicommunal 
development and support funds where needed. 
 
¶15. (C) Airport Safety and Security 
 
The north's Ercan airport is considered illegal by the GOC, 
and only Turkey and Azerbaijan permit international flights 
to land there - over the protests of the Cyprus government. 
The Turkish Cypriots believe that direct flights between 
north Cyprus and the U.S./EU would boost the development of 
their tourism-dependent economy, but have not yet filed a 
formal request.  Meanwhile, Ercan nonetheless handles 
significant numbers of tourist passengers - especially from 
Europe, but also from the Greek Cypriot community and even 
the United States.  As a practical matter, improving the 
safety and security practices at Ercan will help increase the 
safety and security of U.S. citizens and air travel in 
general. 
 
Turkish Cypriot authorities have taken significant steps, 
with help from Turkey, to ensure Ercan airport meets ICAO 
security standards.  One of their most significant 
outstanding problems is the lack of a formally documented set 
of security procedures and practices, and the lack of a 
formal "national" security plan including contingency 
planning as required by ICAO.  Turkish Cypriot authorities 
also have little experience or formal training in the 
detection of visa and other travel document fraud.  Two TSA 
agents conducted an informal survey of the airport in 
November 2004, and Embassy consular officials have begun 
periodic contact with Turkish Cypriot immigration authorities 
there.  Additional steps we could take include: 
 
-- Extending EXBS training and assistance to Ercan Airport, 
including the provision of radiation portal monitors and a 
pallet X-ray system. 
 
-- Having TSA/Rome conduct a follow-up visit to assess 
progress on documenting procedures and drafting "national" 
security plan. 
 
-- Including Turkish Cypriot aviation "officials" in 
TSA-sponsored courses on security planning in U.S. and 
 
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abroad. 
 
-- Authorizing a full and formal TSA and FAA surveys of Ercan 
to ensure the USG has a complete picture of the security and 
safety situation there in the event an application for direct 
flights is received. 
 
-- Initiating a sustained, regular relationship between 
Turkish Cypriot immigration "officials" and Embassy consular 
staff, who will provide training in document fraud detection 
and other areas relating to border security. 
 
-- Allocate DS/ATA funds to improve the counterterrorism 
capacity of law enforcement personnel at the airports and 
elsewhere in the north. 
 
¶16. (C) Muslim Outreach. 
 
The Turkish Cypriots are a highly secular, democratically 
governed Muslim community.  Apart from any considerations 
relating to the Cyprus problem, it remains in the broader 
U.S. interest to engage in a closer cultural and educational 
relationship with the Turkish Cypriot community to encourage 
this community to remain a western-leaning example to other 
Muslims in the region.  The large number of students from the 
Middle East and South Asia -- attracted by high quality 
universities as much as by the north's secular culture -- 
expands our potential to engage with other moderate Muslims. 
Programs to increase this cultural and educational contact 
should include, but not be limited to: 
 
-- Seek an invitation for Mehmet Ali Talat to attend the 
National Prayer Breakfast in Washington, not in any 
"official" capacity but as the elected leader of the largest 
Muslim community on Cyprus. 
 
-- Foreign Language Teaching Assistant (FLTA) and other 
Fulbright teacher exchange programs for Turkish Cypriot 
teachers, to contribute to English language capacity in the 
north. 
 
-- English Language Fellows to improve the English language 
capacity of secondary teachers, of journalists, of imams, and 
public servants. 
 
-- Providing Drug Prevention training to public schools in 
the north, a program which has been requested by Turkish 
Cypriot education "authorities." 
¶17. (C) Intellectual Property Rights. 
The Turkish Cypriot community lacks a basic understanding of 
IPR, which has opened the door to a thriving trade in pirated 
goods, music, and movies.  Antiquated Turkish Cypriot laws 
and spotty enforcement mean that artists and businesses from 
the U.S. and elsewhere suffer from theft of their ideas and 
products.  The "TRNC Ministry of Economy" is willing to 
accept U.S. help to prepare new legislation and training.  It 
is in the interest of U.S. business to help protect IPR in 
the north by: 
 
-- Financing the participation of a Turkish Cypriot official 
in the USPTO IPR Training Academy. 
 
-- Hiring a contractor to work with the "Ministry of Economy" 
to prepare modern IPR legislation. 
 
-- Providing training to Turkish Cypriot "officials" on the 
enforcement and protection of IPR. 
ZIMMERMAN