VZCZCXYZ0001
RR RUEHWEB

DE RUEHAK #1907 3091117
ZNR UUUUU ZZH
R 041117Z NOV 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 7873
INFO RUEHIT/AMCONSUL ISTANBUL 4931
RUEATRS/TREASURY DEPT WASHDC

UNCLAS ANKARA 001907 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KTFN EFIN TU
SUBJECT: TURKEY: CAPITAL REPATRIATION LAW WILL NOT EXEMPT 
MONEY FROM AML-CTF REVIEW 
 
REF: A. ANKARA 1898 
     ¶B. ANKARA 1872 
     ¶C. ANKARA 1864 
 
 ¶1. (U) Sensitive but unclassified.  Not for internet 
distribution. 
 
¶2. (SBU) Summary: We met October 31 with Hasan Aktan, 
Undersecretary of Finance, to discuss the GOT's draft Capital 
Repatriation law and press reports that the GOT draft bill 
would exempt repatriated capital from money laundering and 
terrorism finance laws.  Aktan said the bill, which is now in 
the Parliament, only exempts Turkish citizens who bring 
capital from abroad into Turkey from tax evasion or export 
invoice fraud charges.  The money will have to be deposited 
in a bank and depositors will have to to certify the source 
of the funds.  MASAK (the Turkish FIU) will receive reports 
of all repatriated funds and will review the transactions for 
AML-CTF concerns. End summary. 
 
¶3. (SBU) Aktan said that the GOT modeled its Capital 
Repatriation law on similar legislation from Italy, Germany, 
Greece and Ireland.  The legislation is now in the 
Parliament's Planning and Budget Committee.  The aim of the 
law is to attract much-needed capital to Turkey by reducing 
barriers for Turks to bring back money they currently hold 
offshore.  A major barrier to this, the GOT believes, is 
concerns about unpaid taxes and/or fraudulent export invoice 
declarations used to keep or move funds offshore. 
Accordingly, the bill provides an amnesty during a 
three-month period for Turkish citizens who bring or transfer 
funds into Turkey and deposit the money in a bank. 
 
¶4. (SBU) Aktan said the GOT remains sensitive to money 
laundering and especially to money coming into Turkey to fund 
the PKK.  Accordingly, the law requires Turks who repatriate 
money to deposit it in a bank, present identity documents and 
certify the origin of the money.  Reports of the deposits, 
including depositor declarations, will be given to MASAK, the 
Turkish financial intelligence unit, to review for money 
laundering or terrorism finance concerns. 
 
¶5. (SBU) Comment: As reported reftels, Turkey is facing a 
potentially serious foreign exchange liquidity crisis, and 
this law is intended to alleviate this in part by giving 
Turks a chance to repatriate some of their offshore money. 
The tax and export invoice fraud amnesty may be attractive 
for some, but the GOT is undercutting this by refusing to 
raise its bank deposit guarantee limit from the current YTL 
50,000 or USD $33,000. Much of the money the GOT hopes to 
attract is now in European banks, where it is protected by 
much higher or unlimited deposit guarantee limits.  In 
recognition of this, the Planning and Budget Committee added 
a provision to the GOT's draft bill, giving the GOT the 
discretionary authority to raise deposit insurance rates in 
the future.  End comment. 
 
Visit Ankara's Classified Web Site at 
http://www.intelink.sgov.gov/wiki/Portal:Turk ey 
 
WILSON