VZCZCXYZ0015
RR RUEHWEB

DE RUEHAK #2745/01 3130819
ZNR UUUUU ZZH
R 090819Z NOV 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 4326
INFO RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS ANKARA 002745 
 
SIPDIS 
 
SIPDIS 
 
TREASURY FOR INTERNATIONAL AFFAIRS - JROSE 
EEB/ESC/TFS JAY JALLORINA, S/CT, AND INL 
 
E.O. 12958: N/A 
TAGS: KTFN KCRM EFIN ETTC PREL PTER
SUBJECT: TERRORIST FINANCE: FOLLOW-UP ON ILLICIT CASH 
COURIERS 
 
REF: SECSTATE 152088 
 
¶1.  We spoke with Ergin Ergul, Deputy Director General for 
Foreign Relations at the Justice Ministry.  His comments 
related to questions in reftel are shown below.  In addition, 
we have included information from the April 2007 Financial 
Action Task Force review of Turkey, which are relevant to 
this issue. 
 
¶2.  Status of host nation laws specifically criminalizing 
bulk cash smuggling and key elements of those laws: described 
in para three below. 
 
¶3.  Cross-border reporting requirements for inbound/outbound 
movement of currency and monetary instruments:  There is a 
declaration requirement for taking $5,000 (or equivalent of 
any other currency) and above out of Turkey.  There is no 
declaration requirement for incoming cash in any amount. 
While Turkey currently has a limited declaration system 
related to movement of currencies worth over USD 5,000, the 
Anti Money Laundering law (Law 5549 of October 2006) provides 
for a more comprehensive system to be implemented. 
 
¶4.  Host country actions to interdict potential cash couriers 
or to throw risk into the system:  If the Customs authority 
is suspicious of the amount carried, or of the person 
carrying it, Customs can appeal to MASAK (Turkey's Financial 
Intelligence Unit) and report the amount as a suspicious 
action.  If MASAK is convinced that the cash is linked to 
money laundering or terrorist finance, MASAK carries out the 
necessary investigation and turns the case over to a GOT 
prosecutor for litigation. 
 
¶5.  Status of investigations into bulk cash smuggling: no 
information available 
 
¶6.  Prosecutions under bulk cash smuggling laws: no 
information available 
 
¶7.  How mission elements have engaged relevant partners to 
develop and execute a cash courier interdiction plan:  The 
Regional Legal Advisor at Embassy Ankara hosted a seminar in 
Istanbul on October 31-November 1, 2007, on Anti Money 
Laundering (AML) and Countering Terrorist Finance (CTF).  The 
Regional Legal Advisor at Embassy Ankara hosted a seminar on 
October 31-November 1, on AML/CTF issues.  Participants 
included more than 50 judges, prosecutors, bank compliance 
officers, banking regulators, MASAK, and Ministry of Justice 
officials.  On the U.S. side, representatives from the 
Department of Justice, Federal Bureau of Investigation, and 
State Department participated.  The conference allowed for an 
open discussion of the AML and CTF process, along with 
discussions of suspicious transaction reports, banking 
compliance issues, and legal concerns related to AML/CTF. 
Participants compared success stories and discussed ways to 
improve the current system to achieve more successful 
prosecutions of AML and CTF cases. 
 
¶8.  From the 300-page April 2007 Financial Action Task Force 
Report on Turkey, authored in part by a U.S. Treasury 
Department official: The GOT recently passed a number of key 
laws relating to anti-money laundering (AML) and countering 
terrorist finance (CTF).  A new money laundering offense was 
introduced in June 2005, and a stand-alone terrorist 
financing offense was introduced in July 2006.  The 
confiscation framework in Turkey appears to meet most of the 
standards, but has not yet produced substantial results. 
Turkey has weak systems of implementation of S/RES/1267 
(1999) and S/RES/1373 (2001).  The new AML law (Law 5549 of 
October 2006) provides, among other things, for a more 
comprehensive system of disclosures of cross-border movements 
of cash and monetary instruments to be implemented in the 
near future. 
 
After the establishment of the Turkish Republic in 1923, 
certain laws and codes promulgated were strongly inspired by 
those of other European civil law jurisdictions.  The 
Government of Turkey has in recent years embarked on a 
program of legislative renewal, in part related to 
anticipated accession to the EU.  Overall, Turkey's legal 
requirements to combat ML and TF are generally comprehensive. 
 The legislative renewal program has strengthened the AML/CTF 
system, though, due to the recent implementation of a number 
of key laws, many elements of the system's effectiveness have 
not yet been tested. 
 
Competent authorities are capable, committed and actively 
involved in the Turkish AML/CTF system.  Prosecutors and 
judges do seem, however, to have limited awareness of AML/CTF 
 
issues.  As the TF offense was enacted recently, the CTF 
training of all authorities and of the financial sector is so 
far insufficient.  Competent authorities do not have an 
adequate structure and sufficient technical staff and other 
resources for full AML/CTF supervision of the insurance 
sector.  The FIU is not adequately resourced with staff who 
have a law enforcement background.  Also the need for a 
Council of Ministers' decree for a MASAK memorandum of 
understanding to enter into force is too restrictive.  The 
Customs Service does not seem to have sufficient funding and 
staff for undertaking its functions, and this may lead to 
inadequate attention to AML/CTF issues. 
 
The primary method for laundering funds seen in 246 referrals 
made by MASAK are money transfers and other banking 
transactions (21 percent), commercial transactions and 
accounting records (14 percent), purchasing real estate (13 
percent), physical transfers abroad (four percent), foreign 
commercial transactions (three percent), shell companies 
(three percent), and use of counterfeit documents and 
invoices (three percent). 
 
Following the introduction of AML measures, in particular 
customer due diligence and suspicious transaction reporting, 
there has been an increase in attempts to open accounts in 
the names of third persons.  A decreased use of large bank 
transfers and decreased use of cross-border carrying of cash 
has been detected.  According to Turkish authorities, the 
ability to conduct non face-to-face transactions due to 
technological developments is seen as a ML threat on the near 
horizon. 
 
The Undersecretariat of Customs has a board of inspection and 
investigation and sends reports on violations of legislation 
and major smuggling cases to MASAK.  It is responsible for 
laws relating to the cross border movement of cash, and sends 
copies of foreign currency declaration forms to MASAK. 
Customs enforcement units for anti-smuggling, intelligence, 
and narcotics combat all types of smuggling cases. 
 
The number of ML prosecutions in Turkey is very low, and no 
finalized convictions have yet been achieved.  The new ML 
offense, the scope of which is broader than the previous 
offense, is as yet untested.  This may provide for an 
increase in the number of prosecutions in the future. 
 
Visit Ankara's Classified Web Site at 
http://www.state.sgov.gov/p/eur/ankara/ 
 
WILSON