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