This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 07 ANKARA 000423 
 
SIPDIS 
 
JUSTICE FOR OIA, AFMLS, AND NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL 
EUR/SE; INL 
 
E.O. 12958: N/A 
TAGS: SNAR KTFN PTER TU
SUBJECT: 2004-2005 INTERNATIONAL NARCOTICS CONTROL STRATEGY 
REPORT (INCSR) FOR TURKEY 
 
REF: A. 2004 STATE 248987 
 
     ¶B. 2004 STATE 254401 
     ¶C. THOMPSONKW - LOSBANOSMG E-MAIL 2005 25 JANUARY 
 
 
Following is the 2004-2005 INCSR report for Turkey. 
 
As discussed with INL ref c, Post is continuing to seek 
answers to some of ref b's specific questions on legal issues 
for the money laundering section and will send a follow-up 
cable. 
 
¶I. Summary: 
 
Turkey is a major transit route for Southwest Asian opiates 
to Europe, and serves as a base for major narcotics 
traffickers and brokers.  Turkish law enforcement 
organizations focus their efforts on stemming the traffic of 
drugs and intercepting precursor chemicals.  Turkish forces 
cooperate closely with European and U.S. agencies.  While 
most of the heroin trafficked via Turkey is marketed in 
Western Europe, an increasing amount of heroin and opium also 
is smuggled from Turkey to the U.S.  There is no appreciable 
cultivation of illicit narcotics in Turkey other than 
marijuana grown primarily for domestic consumption.  We are 
unaware of any diversion from Turkey's licit opium poppy 
cultivation and pharmaceutical morphine production program. 
 
Turkey signed the UN Drug Convention in 1988 and ratified the 
agreement in 1996.  Turkey is a member of the Financial 
Action Task Force (FATF).  The U.S. terminated its USD 
500,000 annual assistance program at the end of FY 1999, due 
to Turkey's refusal to provide Leahy Amendment certification 
in an agreement.  End summary. 
 
II. Status of the Country: 
 
Turkey is a major transshipment and opium conversion point 
for heroin.  Turkey is also a base of operations for 
international narcotics traffickers and associates 
trafficking in opium, morphine base, heroin, precursor 
chemicals and other drugs.  The majority of these opiates 
originate in Afghanistan, and are ultimately shipped to 
Western Europe.  A smaller but still significant amount of 
heroin is trafficked to the U.S. via Turkey, and indirectly 
through Europe. 
 
Turkish law enforcement forces are strongly committed to 
disrupting narcotics trafficking.  The Turkish National 
Police (TNP) remains Turkey's most sophisticated 
counter-narcotics force, while the Jandarma and Customs 
continue to increase their efficacy. 
 
Turkish authorities continue to seize large amounts of heroin 
and precursor chemicals, such as acetic anhydride.  It is 
estimated that multi-ton amounts of heroin are processed in 
or smuggled through Turkey each month. 
 
Turkey is one of the two traditional opium-growing countries 
recognized by the USG and the International Narcotics Control 
Board.  There is no appreciable illicit drug cultivation in 
Turkey other than marijuana grown primarily for domestic 
consumption.  The Turkish Government maintains strict control 
over its licit poppy program. 
 
Turkish law enforcement authorities continue to seize large 
quantities of synthetic drugs that have been manufactured in 
Northern and Eastern European countries.  The majority of the 
synthetic drug seizures have occurred as the drugs were being 
shipped through Turkey to other countries in the Middle East. 
 
III. Country Actions against Drugs: 
 
(a) Policy Initiatives: The GOT devotes significant financial 
and human resources to counter-narcotics activities.  Turkey 
continues to play a key role in Operation Containment (a 
regional program to reduce the flow of Afghan heroin to 
Western Europe) as well as in other regional efforts. 
 
The Turkish International Academy against Drugs and Organized 
Crime (TADOC), established under the Turkish National Police 
(TNP), continues to be the key agency leading the fight 
against drug abuse in Turkey.  TADOC regularly organizes 
meetings in which members from relevant government agencies, 
such as experts from the Ministries of Education and Health, 
participate.  In 2004, TNP increased the number of drug 
training and prevention units it previously established in 
various provinces, to cover most parts of Turkey.  These 
units conducted intensive training programs for parents, 
teachers and students in these provinces, making a major 
contribution to the GOT,s drug prevention efforts. 
TADOC was also appointed as the lead agency in dealings with 
the European Monitoring Center for Drugs and Drug Addiction 
(EMCDDA) in 2003.  TADOC expects the GOT to sign the 
agreement making Turkey a member of EMCDDA in January 2005. 
Since all the members of EMCDDA are EU member countries, 
Turkey will be an exception. 
(b) Accomplishments: TADOC organized 79 training programs for 
local and regional law enforcement officers in 2004, mostly 
on narcotics smuggling and money laundering.  The USG 
provided three of these training programs.  A total of 257 
foreign officers were trained at TADOC this year, including 
officers from the Balkans, Central Asia and Afghanistan. 
Syrian officials received counter-narcotics training for the 
first time at TADOC this year. 
 
The UN conducted a drug abuse survey in 6 major cities in 
Turkey in 2004, which showed that there was no major increase 
in drug abuse in Turkey in the last couple of years. 
TADOC,s academy director attributed this to the TNP,s 
intensive training and prevention efforts throughout Turkey. 
 
(c) Law Enforcement Efforts: Through 22 December 2004, 
Turkish law enforcement agencies seized 7.2 tons of heroin, 
4.7 tons of morphine base, 7.7 million dosage units of 
synthetic drugs, 8.6 tons of hashish and 123.6 kilograms of 
cocaine.  In addition, the GOT law enforcement authorities 
have made more than 14,117 drug-related arrests. 
 
(d) Corruption:  In June 2003 a Parliamentary Commission on 
Corruption issued a report examining the reasons for and 
possible solutions to the problem of government corruption. 
It recommended increased transparency in public 
administration, strengthened audits, hiring of more qualified 
personnel, adoption of international judicial standards, and 
increased public and business education. 
 
The GOT continued to struggle against corruption in 2004. 
The Parliamentary Commission on Corruption conducted detailed 
investigations into one former prime minister and five former 
ministers, most of which were sent to the Supreme Court.  The 
court cases for these officials have not yet been finalized. 
 
An important step the GOT took against corruption in 2004 was 
preparing the Draft Law on Combating Corruption, which is 
currently on the General Assembly,s agenda.  The law defines 
the crimes that fall under corruption, as well as the 
prosecution procedures for these crimes.  The law also calls 
for periodical training of public sector personnel on work 
ethics and corruption.  Another law the GOT submitted to the 
Parliament this year that is still waiting for the 
Commission,s approval is the law making December 9 an 
Anti-Corruption Day in Turkey. 
 
In 2003 the GOT ratified the Convention on Combating Bribery 
of Foreign Public Officials in International Transactions; 
the Council of Europe's Civil Law on Corruption; and the UN 
Convention Against Corruption.  In January 2004, the GOT 
ratified the Council of Europe's Criminal Law on Corruption 
and became a member of the Group of Countries against 
Corruption (GRECO). 
 
(e) Agreements and Treaties: Turkey ratified the 1988 UN Drug 
Convention in 1996 and has been a member of FATF since 1991. 
Turkey ratified the UN Convention on the Suppression of 
Terrorist Financing in April 2002.  In 2003 Turkey ratified 
the UN Convention against Transnational Organized Crime. 
 
In February 2003 Turkey signed a Precursors Agreement with 
the EU, to combat the production of substances used in the 
manufacture of narcotic drugs and psychotropic substances. 
Turkey ratified the Precursors Agreement in April 2004. 
 
(f) Cultivation/Production: Illicit drug cultivation, 
primarily marijuana, is minor and has no impact on the United 
States.  The Turkish Grain Board, with no apparent diversion, 
strictly controls licit opium poppy cultivation. 
 
(g) Drug Flow/Transit: Turkey remains a major route, and 
storage, production and staging area, for the flow of heroin 
to Europe.  Turkish-based traffickers and brokers operate in 
conjunction with narcotic smugglers, laboratory operators, 
and money launderers in and outside Turkey.  They finance and 
control the smuggling of opiates to and from Turkey. 
Afghanistan is the source of most of the opiates reaching 
Turkey.  Morphine and heroin base are smuggled overland from 
Pakistan via Iran.  Multi-ton quantities of opiates and 
hashish have been smuggled by sea from Pakistan to points 
along the Mediterranean, Aegean, and/or Marmara seas. 
Opiates and hashish also are smuggled to Turkey overland from 
Afghanistan via Turkmenistan, Azerbaijan, and Georgia. 
Traffickers in Turkey illegally acquire the heroin precursor 
chemical acetic anhydride from sources in Western Europe, the 
Balkans and Russia.  For fiscal year 2004, 1.5 metric tons of 
acetic anhydride was seized in or destined for Turkey. 
 
Turkish-based traffickers control and operate heroin 
laboratories at various locations.  Some of them reportedly 
have interests in heroin laboratories operating near the 
Iranian-Turkish border in Iran.  Turkish-based traffickers 
control much of the heroin marketed to Western Europe. 
 
In 2004, Turkish authorities reported an increase in 
synthetic drug seizures throughout Turkey. Although Turkish 
law enforcement has not seen a large increase in synthetic 
drug manufacturing in Turkey, Turkish National Police did 
report one synthetic drug laboratory seizure in Usak, Turkey 
in December 2004.  For fiscal year 2004, a total of 7.7 
million dosage units of synthetic drugs, predominantly 
Captagon and Ecstasy, were seized in Turkey. 
 
(h) Demand Reduction: While drug abuse remains low in Turkey 
compared to other countries, the number of addicts reportedly 
is increasing.  Although the Turkish Government appears to be 
increasingly aware of the need to combat drug abuse, the 
agencies responsible for drug awareness and treatment remain 
under-funded.  As of 2004, six Alcohol and Substance Abuse 
Treatment and Education Clinics (AMATEM) have been 
established, which serve as regional drug treatment centers. 
Due to lack of funds, only one of the centers focuses on drug 
prevention as well as treatment.  The most recent clinic was 
opened in Ankara in 2004 and will serve as the countrywide 
coordinating center for drug and alcohol treatment and 
education.  The Health Ministry has not conducted a drug 
abuse survey since 1995 due to lack of resources. 
 
In 2004, the United Nations coordinated a survey in 6 major 
cities on drug abuse in Turkey.  The survey did not 
demonstrate any major increase in the number of drug users 
compared to previous data provided by local NGOs. 
 
IV. U.S. Policies, Initiatives and Programs: 
 
(a) U.S. Policy Initiatives and Programs: U.S. policy remains 
to strengthen Turkey,s ability to combat narcotics 
trafficking, money laundering and financial crimes.  Through 
fiscal year 1999, the U.S. Government extended USD 500,000 
annually in assistance.  While that program has now 
terminated, during 2004-05 the U.S. Government anticipates 
spending approximately $100,000 in previously-allocated funds 
on anti-narcotics programs. 
 
(b) Bilateral Cooperation: U.S. counter-narcotics agencies 
report excellent cooperation with Turkish officials.  Turkish 
counter-narcotics forces have developed technically, becoming 
increasingly professional, in part based on the training and 
equipment they received from the U.S. and other international 
law enforcement agencies. 
 
(c) Road Ahead: After the 2002 national elections, many of 
the key government officials responsible for 
counter-narcotics and money-laundering were replaced; 
however, this did not appear to have degraded the quality of 
cooperation. The U.S. Mission in Turkey has continued to 
engage the appointees, and work with the government. 
 
¶V. Statistical Tables (through 9 December 2003): 
 
                              2004      2003       2002 
 
Opium (licit) 
- Cultivation                59,300   149,787    117,650 
- Eradication                   N/A       N/A        N/A 
- Harvestable                35,000    99,430     50,741 
 
Drug Seizures 
- Cocaine (kg)                123.6       2.6        1.6 
- Opium (kg)                   72.0     243.6      262.6 
- Hashish (tons)                8.6       1.9       10.1 
- Heroin (tons)                 7.2       5.2        5.1 
- Morphine Base (tons)          4.7       0.8        0.8 
- Acetic Anhydrite (tons)       1.5       5.8       60.9 
- Captagon/other synthetic      7.7       4.95       1.7 
  (Million dosage units) 
- Illicit Labs                  1         7          N/A 
- Domestic Consumption          N/A       N/A        N/A 
- Users who applied 
  for treatment                8000       N/A        N/A 
- Users treated                 800       N/A        N/A 
- Arrests                    14,117     6,678      8,965 
 
VI. Money Laundering and Financial Crime: 
 
(a) General.  In general, though the GOT has tried to bring 
its legal regime in compliance with international norms, 
Turkey's anti-money laundering regime does not have a strong 
reputation for enforcement.  In 2001, the GOT signed the 
Strasbourg Convention on Laundering, Search, Seizure and 
Confiscation of the Proceeds from Crime (ratified September 
2003); the Council of Europe (COE) Criminal Law on Corruption 
(ratified 2004); and the Council of Europe (COE) Civil Law on 
Corruption (ratified April 2003).  By becoming a party to 
these COE conventions, the GOT obligated itself to revise its 
laws to include proceeds of all serious crimes in the 
definition of money laundering, and to specify corruption as 
a predicate offense for money laundering. 
 
The Turkish Government signed the UN Convention against 
Transnational Organized Crime in 2001 and ratified it in 
December 2003.  Turkey signed the Convention on Combating 
Bribery of Foreign Public Officials in International Business 
Transactions in 2000 (ratified February 2003).  The GOT also 
became a party to the 1999 International Convention for the 
Suppression of the Financing of Terrorism in 2002. 
 
Turkey cooperates closely with the U.S. and its neighbors in 
the Southeast Europe Cooperation Initiative (SECI).  Turkey 
is responsive, although often not in a timely way, to 
requests for US law enforcement assistance necessary to the 
investigation of financial crimes related to terrorism, 
terrorist financing, and other crimes, pursuant to the 
provisions of the Mutual Legal Assistance Treaty (MLAT).  All 
responses are generated by the Turkish Ministry of Justice. 
 
Turkey is not an offshore financial center but Istanbul is an 
important regional financial center, particularly for Central 
Asia and the Caucasus, as well as for the Middle East and 
Eastern Europe.  Since the financial crisis of 2000, the GOT 
has significantly tightened oversight of the banking system 
through the independent Bank Regulatory and Supervisory 
Agency (BRSA).  Although it failed to detect massive fraud at 
one bank which led to its being taken over in 2003 by 
regulators, the BRSA is working to improve its ability to 
detect bank fraud.  Since the recent banking law amendments 
and also the establishment of the BRSA, there has been no 
evidence of an increase in financial crimes in Turkey. 
 
Money laundering takes place in both banks and nonbank 
financial institutions.  Traditional money laundering methods 
in Turkey involve the cross-border smuggling of currency; 
bank transfers into and out of country; and the purchase of 
high value items such as real estate, gold, and luxury 
automobiles.  It is believed that Turkish-based traffickers 
transfer money to pay narcotic suppliers in Pakistan and 
Afghanistan, primarily through Istanbul money exchanges.  The 
exchanges in turn wire transfer the funds through Turkish 
banks to accounts in Dubai and other locations in the United 
Arab Emirates.  The money is then paid, often through the 
underground banking system, to narcotics suppliers in 
Pakistan and Afghanistan.  Local narcotics-trafficking 
organizations are reportedly responsible for only a small 
portion of the total funds laundered in Turkey.  A 
substantial percentage of money laundering that takes place 
in Turkey appears to involve tax evasion, and informed 
observers estimate that as much as 50 percent of the economy 
is unregistered.  The GOT has taken no steps to regulate or 
register alternative remittance networks. 
 
To Post's knowledge, neither the country nor any senior 
official, as a matter of government policy or practice, 
facilitates or engages in laundering the proceeds from 
illegal drug transactions, from other serious crimes or from 
terrorist financing.  Moreover, to Post's knowledge, Turkey's 
financial institutions do not engage in currency transactions 
involving international narcotics trafficking proceeds that 
include significant amounts of US currency or currency 
derived from illegal drug sales in the US or that otherwise 
significantly affect the US. 
There is no significant black market for smuggled goods in 
Turkey.  However, since tax evasion is a problem, the GOT is 
in the process of reforming its tax administration, with the 
goal of improving tax collection.  Turkey has established 
systems for identifying, tracing, freezing, seizing and 
forfeiting narcotics-related assets.  Turkey,s laws allow 
for only criminal forfeiture. 
 
There are 21 Free Trade Zones operating in Turkey.  There is 
no indication that theses free trade zones are being used in 
trade-based money laundering schemes or by the financiers of 
terrorism.  The GOT controls access and grants limited 
authority within the free trade zones. 
 
There have been no arrests and/or prosecutions for money 
laundering or terrorist financing since January 1, 2004. 
 
(b) Laws and Regulations to Prevent Money 
Laundering/Terrorist Financing. 
 
Turkey criminalized money laundering in 1996 for a wide range 
of predicate offenses, including narcotics-related crimes, 
smuggling of arms and antiquities, terrorism, counterfeiting, 
and trafficking in human organs and in women.  The Council of 
Ministers subsequently passed a set of regulations that 
mandate the filing of suspicious transaction reports (STRs), 
and require customer identification and the maintenance of 
bank records for five years.  These regulations apply to 
banks and a wide range of nonbank financial institutions, 
including insurance firms and jewelry dealers.  Sanctions 
apply for failure to comply.  However, the number of STRs 
being filed is quite low, even taking into consideration the 
fact that the Turkish economy is cash-based.  A possible 
reason for this is the lack of safe harbor protection for 
bankers and other filers of STRs.  Turkish officials 
indicated in December 2004 that the GOT has drafted 
legislation that will provide such protection, but it has not 
yet been enacted. 
 
Turkey does not have secrecy laws that prevent disclosure of 
client and ownership information by domestic and offshore 
financial services companies to bank supervisors and law 
enforcement authorities. 
 
Turkey is party to the UN International Convention against 
Illicit Traffic in Narcotic Drugs and Psychotropic Substances 
and is, in general, a party to all the relevant UN 
instruments.  However, implementation efforts on UN 
anti-financial crime conventions are weak.  On terrorism 
finance, Turkey does not adhere to all eight of the FATF 
special recommendations.  The GOT claims, however, that new 
legislation being prepared in early 2005 will help bring 
Turkey closer to adhering to all relevant international money 
laundering and terror finance standards. 
 
 
Turkey,s police, prosecutors, judges and investigative 
agencies require substantial training in financial crimes. 
The government has increased its focus on money laundering, 
but has had difficulty obtaining convictions.  Since being 
established in 1997, the Financial Crimes Investigative Board 
(MASAK) has pursued more than 500 money-laundering cases. 
Through 2004, only one case has resulted in a conviction and 
it was overturned.  Note: Last year,s report mistakenly 
claimed that two cases had resulted in convictions.  While 
good statistics are not available, most of the cases are 
believed to involve non-narcotic criminal actions or tax 
evasion. 
 
Money laundering offenses are more broadly defined in the new 
Turkish Criminal Law (which will be enforced starting April 
2005) to include all predicate offenses punishable by 
one-year imprisonment.  Previously, Turkey's anti-money 
laundering law comprised a list of specific predicate 
offenses.  In addition, the new Criminal Procedures Law, also 
to be enforced in April 2005, facilitates asset forfeiture. 
MASAK is trying to strengthen its role as Turkey,s financial 
intelligence unit.  It would benefit from additional legal 
authority; continuity of senior management; training; and 
computers.  Training and equipment needs are being addressed 
by an EU accession twinning project, which is expected to end 
in June 2006. 
 
Currently, there are three main pillars which govern MASAK,s 
procedures and duties: 1) Regulatory function; 2) Financial 
intelligence function; and 3) Investigation and assessment 
functions.  In a new draft law on its structure and 
functions, MASAK will lose its investigative function. 
Prosecutors will take on the investigative function and 
coordinate the relevant agencies needed for investigations of 
financial crimes.  MASAK will retain its financial 
intelligence and regulatory responsibilities.  The new law 
also recommends policies to investigate the proceeds of 
bribery and corruption.  Relevant agencies are currently 
reviewing the draft of MASAK,s law and the law is expected 
to be passed early in 2005. 
 
(c) Asset Forfeiture and Seizure Legislation.  In addition to 
penalizing the crime of money laundering, Turkey's anti-money 
laundering law calls for forfeiture.  However, the law does 
not allow for civil as well as criminal forfeiture.  Turkish 
law does not allow for the administrative freezing of assets. 
 It relies instead on criminal freezing.  Legitimate business 
can be seized if used to launder drug money, support 
terrorist activity, or are otherwise related to other 
criminal proceeds.  Property or its value that is confiscated 
is transferred to the Treasury.  There are no provisions for 
sharing, either with domestic or international law 
enforcement.  The country has not enacted laws for the 
sharing of seized narcotics assets, nor for assets from other 
serious crimes with other governments.  With regards to 
terrorism finance, the GOT has the authority to identify and 
freeze only the assets of terrorist individuals and groups 
designated by the UN 1267 Sanctions Committee. 
 
The anti-money laundering law provides for the confiscation 
of all property and assets (including derived income or 
returns) which are the proceeds of a money laundering 
predicate offense (soon to be expanded to crimes punishable 
by one year imprisonment), once the defendant is convicted. 
The law allows for the confiscation of the equivalent value 
of direct proceeds that could not be seized. 
Instrumentalities of money laundering can be confiscated 
under the law.  In addition to the anti-money laundering law, 
Article 36 of the Criminal Code provides for post-conviction 
seizure and confiscation of the proceeds of crimes.  The 
defendant, however, must own the property subject to 
forfeiture. 
 
Under the anti-money laundering law, forfeiture provisions 
for assets obtained from criminal acts can only be applied to 
individuals convicted of laundering "dirty money" and to 
those assets in the possession of the convicted subject. 
 
The government enforces existing drug-related asset seizure 
and forfeiture laws and MASAK, the Turkish National Police, 
and the Courts are the government entities responsible for 
tracing, seizing assets and freezing assets.  The 
jurisdiction has adequate police powers and resources to 
trace, seize and freeze assets. 
 
The GOT is engaged in bilateral and multilateral negotiations 
with other governments to enhance asset tracing, freezing and 
seizure.  For example, GOT representatives will participate 
in a meeting in Vienna in January 2005 to prepare a draft 
model bilateral agreement on the disposal of confiscated 
proceeds of crime. 
 
To Post's knowledge, neither traffickers, organized crime 
organizations, nor terrorist organizations have taken 
retaliatory actions related to money laundering/terrorist 
financing investigations, government cooperation with the 
USG, or seizure/freezing of assets. 
 
(d) Terrorist Financing. Turkey has not yet explicitly 
criminalized the financing of terrorism.  It complies with 
UNSCR 1373 through the distribution to interested GOT 
agencies of ministerial decrees.  The tools currently 
available under Turkish law for locating, freezing and 
confiscating terrorist assets are cumbersome, limited and not 
particularly effective.  For example, the Turkish authorities 
have no legal mechanism to freeze assets of terrorists other 
than those linked to Al-Qaeda and the Taliban.  The absence 
of &safe harbor8 protections from prosecution for bankers 
reporting suspicious transactions is another limiting factor. 
 There is no mechanism for timely information sharing with 
other countries, law enforcement and anti-terrorist 
financing agencies.  As a result, one terrorist financing 
investigation conducted by the FBI and Royal Canadian Mounted 
Police in 2003 had been hampered.  The legislation discussed 
above as well as efforts underway in the GOT to define 
terrorism finance in the Law to Combat Terrorism in 
accordance with the international and EU framework should 
improve this situation. 
 
Another vulnerability in Turkey's counter-terror finance 
regime is the possibility of abuse in non-profit 
organizations.  The GOT has a General Director of Foundations 
which licenses and oversees charitable organizations. 
Applicants are required to verify and prove their funding 
sources.  Charities must have bylaws and are audited by the 
Directorate and are subject to being shut down if they act 
outside the bylaws.  However, the GOT does not require other 
oversight mechanisms such as requiring the publication of 
annual financial reports or periodic reporting to competent 
authorities to prevent the misuse of non-profit organizations 
and alternative remittance systems by terrorist or criminal 
groups.  There is no central registry to provide ease of 
access to appropriate law enforcement and regulatory 
agencies.  The EU accession twinning project is providing 
MASAK with a sound structural database system and could serve 
as a registry for information for law enforcement and other 
regulatory agencies. 
EDELMAN