Turkey’s FATF listing shows EU double standards

The FATF is made up of 36 member organizations and nations, including the European Commission and most of Europe. It said in its July statement that although Turkey had taken steps toward improving its anti-money laundering and terrorist-funding policies by updating its legislation, it had failed to make sufficient progress in “implementing its action plan, and that certain strategic AML/CFT [anti-money laundering/combating the finance of terrorists] deficiencies remain. It recommended Turkey address these deficiencies by adequately criminalizing terrorist financing and implementing an adequate legal framework for identifying and freezing terrorists’ assets.

Other countries included in the list are Kenya, Bolivia, Sri Lanka, Syria, Cuba and Myanmar. The FATF listed North Korea and Cuba in a subcategory which could be defined as the body’s black list in terms of terrorist financing.

After the FATF statement was released on July 24, the US urged Turkey to improve its counter-terrorist financing measures. During a good-will visit to parliamentary speaker Cemil Çiçek to congratulate him on his new post, US Ambassador to Turkey Francis Ricciardone said Turkey should adopt the necessary legislation to prevent the financing of terrorists. The US, which also lists the PKK as a terrorist organization, froze the financial assets of two PKK leaders over their involvement in drug trafficking shortly before the statement’s release. However, until that act the US had been mostly unhelpful in dealing with the terrorist group’s drug trafficking operation in northern Iraq.

Although Turkey has been warned with regards to its control of terrorist financing for the past two years, it has never been subject to any serious criticism by the EU. Turkish officials believe that Turkey’s appearance on the list stems from differences in opinion the EU and Turkey have over the definition of a terrorist organization. Turkey also feels that the FATF and the EU are being unfair and one-sided, as most European countries have continued to allow PKK-affiliated groups to function in their countries, despite a myriad of notices and warnings from Turkey.

Holland, France, Germany and Belgium have caught many PKK members in their countries with large amounts of money in the bank, but all of these people were released by courts. PKK-affiliated groups in Europe are mostly founded through laundered money earned in drug trafficking along the PKK network. Most European countries see the PKK as a group of freedom fighters and do not agree that money transferred to the PKK from pro-PKK groups is financing terrorism, even though the EU officially lists the PKK as a terrorist organization.

Turkey also feels its listing is unfair because the Turkish Finance Ministry’s Financial Crimes Investigation Board (MASAK) has covered a great distance in combating the financing of terrorists and money laundering. Turkey, through MASAK, has signed a number of bilateral agreements with other countries, including Indonesia, Portugal, Sweden, Mongolia, Afghanistan, Georgia, Albania, Syria, Romania, Croatia, Macedonia, South Korea, Bosnia and Herzegovina, and most recently Japan, Ukraine, Norway, Jordan, Senegal and Luxembourg. These agreements usually take the form of Memorandums of Understanding (MOU) over the cooperation between the parties’ financial intelligence units.

Money laundering in Turkey

Turkey has not taken the FAFT report very seriously due to the double standard of European countries in financing of terrorists. Turkey will continue to conduct operations to combat money laundering and the financing of terrorists through bilateral agreements.

On July 19, 2010, Turkey announced a new action plan to fight organized crime. Since then, MASAK has uncovered 10,251 suspicious money transactions that appeared to be money laundering operations, compared to only 352 in 2005. Regarding transactions suspected to finance terrorist organizations, there were 186 cases reported by MASAK, as opposed to three in 2006.

Turkey to step up

Although Turkey is upset by the double standard, it recognizes that both the US and some EU members have been more cooperative in combating the financing of terrorists. In response, Turkey will continue to carry out its responsibilities in this regard. Improvements are expected with a bill on the Prevention of Financing of Terrorists that will be referred to Parliament shortly.

Turkey will also concentrate on its Action Plan to Combat the Laundering of Income Generated by Crime developed in May 2010 shortly after a conference held by Paul Vlaanderen, the head of FATF.