FATF Public Statement

The Financial Action Task Force (FATF) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from ML/FT risks and to encourage greater compliance with the AML/CFT standards, the FATF identified jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions*.

Iran

Democratic People's Republic of Korea (DPRK)

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies** The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.

Bolivia
Cuba**
Ethiopia
Kenya
Myanmar
Sri Lanka
Syria
Turkey


* The FATF has previously issued public statements calling for counter-measures on Iran and DPRK. Those statements are updated below.
**Cuba has not engaged with the FATF in the process.


Iran

The FATF remains concerned by Iran’s failure to meaningfully address the on-going and substantial deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The FATF remains particularly concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system. The FATF urges Iran to immediately and meaningfully address its AML/CFT deficiencies, in particular by criminalising terrorist financing and effectively implementing suspicious transaction reporting (STR) requirements.

The FATF reaffirms its call on members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions. In addition to enhanced scrutiny, the FATF reaffirms its 25 February 2009 call on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from Iran. FATF continues to urge jurisdictions to protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices and to take into account ML/FT risks when considering requests by Iranian financial institutions to open branches and subsidiaries in their jurisdiction. If Iran fails to take concrete steps to improve its AML/CFT regime, the FATF will consider calling on its members and urging all jurisdictions to strengthen counter-measures in October 2011.

Cuba

Cuba has not committed to the AML/CFT international standards, nor has it constructively engaged with the FATF. The FATF has identified Cuba as having strategic AML/CFT deficiencies that pose a risk to the international financial system. The FATF urges Cuba to develop an AML/CFT regime in line with international standards, and is ready to work with the Cuban authorities to this end.

Bolivia

Despite Bolivia’s high-level political commitment to work with the FATF and GAFISUD to address its strategic AML/CFT deficiencies, Bolivia has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Bolivia should work on addressing these deficiencies including by: (1) ensuring adequate criminalisation of money laundering (Recommendation 1); (2) adequately criminalising terrorist financing (Special Recommendation II); (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); and (4) establishing a fully operational and effective Financial Intelligence Unit (Recommendation 26). The FATF encourages Bolivia to address its remaining deficiencies and continue the process of implementing its action plan, including by continuing to work on its AML/CFT legislation.

Ethiopia

Despite Ethiopia’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, Ethiopia has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Ethiopia should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing an adequate legal framework and procedures to identify and freeze terrorist assets (Special Recommendation III); (3) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (4) raising awareness of AML/CFT issues within the law enforcement community (Recommendation 27); and (5) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17). The FATF encourages Ethiopia to address its remaining deficiencies and continue the process of implementing its action plan.

Kenya

Despite Kenya’s high-level political commitment to work with the FATF and ESAAMLG to address its strategic AML/CFT deficiencies, Kenya has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Kenya should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); (4) raising awareness of AML/CFT issues within the law enforcement community (Recommendation 27); and (5) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17). The FATF encourages Kenya to address its remaining deficiencies and continue the process of implementing its action plan, including by implementing the AML legislation and operationalising the new AML Advisory Board.

Myanmar

Myanmar has taken steps towards improving its AML/CFT regime, including by clarifying the scope of the ML offence. Despite Myanmar’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Myanmar has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Myanmar should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) further strengthening the extradition framework in relation to terrorist financing (Recommendation 35 and Special Recommendation I); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (5) enhancing financial transparency (Recommendation 4); and (6) strengthening customer due diligence measures (Recommendation 5). The FATF encourages Myanmar to address its remaining deficiencies and continue the process of implementing its action plan.

Sri Lanka

Despite Sri Lanka’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Sri Lanka has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Sri Lanka should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); and (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III). The FATF encourages Sri Lanka to address its remaining deficiencies and continue the process of implementing its action plan, including by continuing to work on its AML/CFT legislation.

Syria

Syria has taken steps towards improving its AML/CFT regime, including by improving the ML and TF offences. Despite Syria’s high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies, Syria has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain Syria should work on addressing its deficiencies, including by: (1) adopting adequate measures to implement and enforce the 1999 International Convention for the Suppression of Financing of Terrorism (Special Recommendation I); (2) implementing adequate procedures for identifying and freezing terrorist assets (Special Recommendation III); (3) ensuring financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to ML and FT (Recommendation 13 and Special Recommendation IV); and (4) ensuring appropriate laws and procedures are in place to provide mutual legal assistance (Recommendations 36-38, Special Recommendation V). The FATF encourages Syria to address its remaining deficiencies and continue the process of implementing its action plan.

Turkey

Turkey has taken steps towards improving its AML/CFT regime, including by working on CFT legislation. Despite Turkey’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, Turkey has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Turkey should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); and (2) implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III). The FATF encourages Turkey to address its remaining deficiencies and continue the process of implementing its action plan.

Source: FATF

U.S. to allocate $29.3 million to Azerbaijan

The U.S. will allocate $29.3 million to Azerbaijan to develop democracy in 2011, the website foreignassistance.gov. reported.

U.S. assistance to Azerbaijan is aimed at promoting democratic reforma, strengthening governmental checks and balances, increasing public participation in state affairs, as well as combating domestic and transnational crime, including money laundering, terrorism financing, corruption, human and drug trafficking. U.S. assistance also helps to expand and diversify the country's economic growth by eliminating critical economic policy and institutional constraints to ensure stability and sustained growth in the sectors of the economy.

Georgia will receive $ 90.1 million in 2011, Armenia - $ 45.2 million, Russia $ 68.7 million, Turkey - $ 5.9 million.

Source: foreignassistance.gov

Turkey property 'scam' man faces court hearing

An NI man alleged to be involved in a multi-million pound property scam in Turkey is to appear in court later this month charged with 171 fraud offences.

Kevin O'Kane, 51, who is originally from Bellaghy and now lives in Portglenone, is accused of obtaining money and property by deception.

About 80 people from NI are believed to have paid £75,000 each for three bedroom properties near Bodrum.

Mr O'Kane has consistently claimed he is himself the victim of a scam.

His solicitor has said he will be denying the charges.

He faces one court of money laundering, three of forgery and 167 of obtaining money or property by deception.

The charges date from between 2005 and 2007.

It is alleged that he falsely represented himself as the landowner, builder and developer of the Golden Beach Villas and claimed that he had the authority to sell them.

His solicitor, Hugh Leslie of John J Rice and Company, said his client had fully co-operated with investigating police.

"He has given full explanations as to his business activities in Turkey.

"He makes the point that he has lost financially as a result of his involvement in those activities and that the people who are responsible for the loss of money involving so many investors in Northern Ireland are still in Turkey.

"He says he acted in good faith."

He added that Mr O'Kane believed there was a risk to his personal safety in Turkey.

"He is anxious to clear his name and he will be pleading not guilty at his eventual trial."

It is believed that at the court hearing on 27 August, the Public Prosecution Service will apply to have Mr O'Kane returned for trial by a jury.

Source: BBC

The New UN Sanctions Resolution Against Iran

The UN Security Council approved a resolution on June 9th imposing a fourth round of sanctions on Iran in response to its continued nuclear enrichment program in violation of prior Security Council resolutions. The vote was 12 in favor, 2 against (Brazil and Turkey) and 1 abstention (Lebanon).

The new resolution imposes new financial restrictions on Iran, expands an existing arms embargo, and authorizes greater stop and search of Iranian cargo ships. Targeted sanctions on specific individuals and entities were expanded. The resolution also includes measures directed against Iran’s Revolutionary Guard.

While the United States, Great Britain and France were its strongest sponsors, China and Russia also expressed their verbal support along with their votes, although the Russian ambassador added a major caveat in his response to a reporter’s question about Russia’s prospective sale of a sophisticated anti-aircraft system to Iran.

Lebanon’s decision to abstain was a pleasant surprise, considering the influence of Iran-backed Hezbollah in the Lebanese government. However, Brazil and Turkey as expected opposed the new resolution on the grounds that it could undermine the proposed nuclear fuel swap agreed by the two countries with Iran last month. They seemed to forget that the European Union has been trying to negotiate with Iran since 2005 and the Obama administration waited 18 months while trying to engage Iran before seeking passage of this resolution. Only when new sanctions became a real possibility did Iran come around to the fuel swap concept that it had first agreed upon and then promptly reneged on last fall.

Rice’s Positive Spin

U.S. Ambassador Susan Rice told reporters after the vote that the “resolution is strong, it’s tough and it’s comprehensive. And it is something that Iran fought very hard to prevent passage today. The effort, the time, the money, and the poise that they employed, to try to prevent this resolution’s passage only underscores their understanding, that this is a major blow.”

Despite the ineffectiveness of the three prior resolutions, Ambassador Rice expressed confidence that the cumulative effect on Iran of all the resolutions is “harmful and hurtful.”

Iran’s Rebuke

Iran remains unbowed. Its representative told the Security Council after the vote that it had no intention of changing its present course. He accused the United States and Great Britain in particular of continuing a long pattern of interference in Iran’s affairs and displaying a double standard vis a vis Israel. Ambassador Rice told reporters that these comments were “reprehensible, offensive, and inaccurate.”

Stronger Resolution on Paper

On paper at least, the new resolution does appear to represent a significant move forward from the prior three. More specifically, the resolution prohibits Iran from investing in sensitive nuclear activities abroad, like uranium enrichment and reprocessing activities, as well as activities involving ballistic missiles capable of delivering nuclear weapons. The ban also applies to investment in uranium mining.

States are prohibited from selling or in any way transferring to Iran various categories of heavy weapons (battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, and certain missiles or missile systems). States are similarly prohibited from providing technical or financial assistance for such systems, or spare parts.

The resolution also sets up a new cargo inspection framework. States are expected to inspect any vessel on their territory suspected of carrying prohibited cargo, including banned conventional arms or sensitive nuclear or missile items. States are also expected to cooperate in such inspections on the high seas.

States are called upon to prevent any financial service and freeze any asset that could contribute to Iran’s proliferation.

Resolution targets the Islamic Revolutionary Guard Corps

Most significantly, the resolution targets the Islamic Revolutionary Guard Corps (IRGC) for its role in proliferation and requires states to mandate that businesses exercise vigilance over all transactions involving the IRGC. Fifteen IRGC-related companies linked to proliferation will have their assets frozen. The IRGC is the major power center in Iran’s economic and military spheres as well as one of the government’s primary instruments for suppressing political dissent. Impairing the IRGC’s freedom of operations will be a significant accomplishment, if successful.

The Proof Will be in Enforcement

UN Security Council sanctions resolutions against Iraq, North Korea and Iran have had a bad track record in actual practice. The resolutions have been easy for the sanctioned countries to evade, through the use of multiple front entities, money laundering and trading partners unwilling to give up short term advantage for longer term peace and security.

Also, enforcement of the cargo inspection at sea will be a challenge if Iran, as expected, refuses to cooperate. When the French UN ambassador, for example, was asked what measures France would be willing to take in such a scenario, he refused to answer what he called a “hypothetical question.”

Most ominously, the Russian UN ambassador told reporters that Russia did not consider the sale of its sophisticated S-300 anti-aircraft system to Iran to be within the resolution’s scope. The S-300 missile defense system would no doubt be used by Iran to shield its nuclear sites against a potential air strike, should military force become necessary to stop Iran from producing nuclear bombs. The Russian ambassador is technically correct because the resolution’s ban on the transfer to Iran of certain missile systems is written in such a way that it creates a big loophole for Russia to walk through in delivering to Iran its ground-to-air missiles, including its S-300 anti-aircraft missiles and anti-missile interceptors.

The Obama administration will spin the latest sanctions resolution against Iran as a major diplomatic triumph and a significant obstacle in the way of Iran’s progress towards achieving a nuclear arms capability. I hope they are right. However, until the S-300 loophole is closed; until the U.S. and its allies figure out a way to effectively stop evasions of the sanctions; and until enough countries show that they are willing to enforce the cargo inspections, the Obama administration might want to wait before it celebrates.

Source: Canada Free Press

Cyprus’ anti-terror infrastructure ‘weak’ says US

The buffer zone separating the island’s divided communities is vulnerable to penetration by terrorist groups, a United States government report said.

“The largely porous, lightly-patrolled “green line” separating the two sides is routinely exploited for trafficking people, narcotics, and other illicit goods, and is vulnerable to penetration by terrorist groups,” the State Department 2009 Country Reports on Terrorism said.

“This de facto division has precluded counterterrorism cooperation between the two communities’ law enforcement authorities, and between Cyprus and Turkey.”

The report said the regular ferry service between Latakia, Syria and Famagusta, in the Turkish-occupied north, has facilitated increased illegal migration into Cyprus and the wider EU.

Cyprus continued to be an ally of the US in its fight against terrorism and the government was responsive to efforts to block and freeze terrorist assets, the State Department.

In January, Cypriot authorities detained the Cypriot-flagged MV Monchegorsk which was chartered by the Islamic Republic of Iran Shipping Lines and contained Iranian-origin weapons components allegedly headed for Hezbollah in Lebanon.

The components were confiscated by Cypriot customs officials after the Government of Cyprus determined the shipment was in violation of United Nations Security Council resolutions.

Cyprus also “continued to allow blanket overflight and landing rights to US military aircraft supporting operations in Iraq and Afghanistan,” the report said.

But the island’s legal framework for investigating and prosecuting terrorist-related activity remains relatively weak, the State Department said.

The two countries cooperated closely on terrorist financing and money laundering issues with Cyprus maintaining a “Prevention and Suppression of Money-Laundering Activities Law” that contained provisions on tracing and confiscating assets.

“In the Turkish Cypriot-administered area, issues of status and recognition inevitably restricted the ability of authorities to cooperate on counterterrorism,” the report said.

Turkish Cypriots cannot sign treaties, UN conventions, or other international agreements, and lack the legal and institutional framework necessary to combat money-laundering and terrorist financing effectively.

“Within these limitations, Turkish Cypriots cooperated in pursuing specific counterterrorism objectives.”

By George Psyllides Published on August 7, 2010

Source: Cyprus Mail

Saudi Arabia: Cabinet looks at money laundering

Monday’s Cabinet meeting, chaired by King Abdullah, Custodian of the Two Holy Mosques, resulted in approval for measures to address issues concerning money laundering and terrorism funding as well as housing.


The King briefed the session, held at Al-Yamama Palace in the capital, on the most significant communications of the past week, including the visits to the Kingdom of the President of Egypt, Hosni Mubarak, Palestinian President Mahmoud Abbas and the President of Sudan, Omar Hassan Al-Bashir.
King Abdullah also briefed the Cabinet on communications he received from the President of Yemen, Ali Abdullah Saleh, and his reception of Turkish Foreign Minister Ahmed Dawoud Awghlou and the Second Vice President of Afghanistan, Abdul Karim Khalili.

Minister of Culture and Information Abdul Aziz Khoja released a statement to the Saudi Press Agency (SPA) saying that the meeting looked at reports on developments in the Arab and Islamic world as well as wider international affairs and discussed the Kingdom’s economy following the recent announcement of the national budget.

Cabinet approval was given to authorize Prince Naif, Second Deputy Prime Minister and Minister of Interior, to sign with foreign authorities a memorandum of understanding on collaboration in investigation into money laundering and the financing of terrorism.

Measures were also approved following a study on providing land grants to Saudi nationals to facilitate the acquisition of homes. The measures included joining the Ministry of Municipal and Rural Affairs program to the Iskan housing program to guarantee citizens housing, the provision of land to the Housing Commission to build homes for nationals in conformity with regulations and government-planned zones, provide all services stipulated for by the budget, and help beneficiaries of housing projects integrate with the rest of society by ensuring that projects are evenly distributed across cities. Cabinet approval was further given for the proposed Board of Directors at the Balad Al-Ameen Construction Development Company for the period of three years and its members from government, private and other sectors.

Similar approval was given for the restructuring of the Board of Directors of the Jeddah Development and Construction Company.

Source: The Saudi Gazette

Ghana fingered in Australia massive identity fraud

Ghana has been named as one of the countries whose citizens are stealing the identities of Australians.

News out in the Australian media say the theft which is in a large scale involves spies, drug dealers, illegal immigrants and people engaged in money laundering.

The report say passport details of five people emailed to a travel agent for travel for people from Ghana has been found.

One report by the Herald Sun citing documents from the country’s Department of Foreign Affairs and trade says the illegal practice of forging passports of living Australians is widespread.

According to the report, a fake or doctored Australian passport has been found, on average, once a week in the past three years.

Fake passports were detected at ports in countries including Britain, Dubai, Ghana, Thailand, Hong Kong, Indonesia, Malaysia, Egypt, Turkey, and Peru, the report indicated.

According to the report, some of the passports were in the hands of spies, smugglers and thieves.

Australian passports were used in 525 frauds in the last financial year, and many people were caught lying to get a passport, it said.

Source: Citifmonline

Turkey-UK: Gambling Web site linked to money laundering

An investigation into an England-based Web site, whose owners work from within Turkey targeting Turkish gamblers, has revealed that 600,000 Turks have lost money on the Web site, which has laundered the money to several Swiss bank accounts.

The Web site, superbahis.com, has a YTL 20 membership fee. Computers with the Web site's member database were seized by police from a building that is home to "Shopping TV."
Once the Financial Crimes Investigation Board (MASAK) noticed that the Web site launders money from Turkey through online betting via an England-based Web site, the office of the chief public prosecution in İstanbul took action. An operation was begun on May 27, 2008 by İstanbul police in İstanbul, Ankara, İzmir, Mersin and Trabzon simultaneously. Thirty-nine people, two of them women, were taken into custody. Among the detainees are Aydın A. and his brother, Turgay A., owners of superbahis.com and "Shopping TV." The police have reportedly confiscated 70 computers, seven hard drives, 1,115 DVDs and CDs, 33 memory sticks, 134 credit cards and many documents found in the course of a search of the detainees' houses and workplaces. The police also confiscated one kilogram of gold, TRY 368,800, $10,371 and 4,550 euros.

Eleven of the suspects were released following interrogation while 28 suspects were transferred to the İstanbul Court of Justice and stand accused of establishing a criminal organization, being intermediaries in betting and gambling, and laundering money.

The suspects allegedly illegally collected TRY 7 million. A report drafted by MASAK claims the money acquired through gambling was first transferred to England and then to the suspects' bank accounts in Switzerland or to "Shopping TV" in payment for its services in an attempt to launder the money. MASAK is continuing to account for all the funds.

In connection with this case is that of Barış Kum, who had had reportedly won up to TRY 2,750,000 through online gambling on superbahis.com with money he collected from family and friends. He allegedly committed suicide on Nov. 6, 2006 after losing all his earnings. His family has sued the Web site over his death.

Source: Zaman

Turkey Seeks to Tighten Legislation Aagainst Money Laundering

By Gareth Jenkins

Friday, September 26, 2008

On September 16 a directive by the Turkish Ministry of Finance to try to tighten Turkish anti-money-laundering legislation was published in the country’s Official Gazette.

“The Directive on the Harmonization Program Regarding Responsibilities Related to the Prevention of the Laundering of Criminal Proceeds and the Financing of Terrorism” requires all financial institutions in the country—such as banks, brokerage houses, and insurance and pension companies—to improve the monitoring of financial transactions through the adoption of standardized procedures and an increase in staff training. The directive also obliges the institutions to establish specialized departments to ensure that the appropriate procedures are being followed (Official Gazette, No. 26999, September 16).

The directive is the latest in a flurry of legislative amendments passed by the Turkish authorities in the run-up to an assessment in February 2009 of Turkey’s anti-money-laundering efforts by the Financial Action Task Force (FATF) of the Organization for Economic Cooperation and Development (OECD). A previous assessment by the FATF in February 2007 listed numerous shortcomings in Turkish legislation and its implementation. They included the lack of a precise definition in Turkish law of the crime of money laundering; inadequate fulfillment of Turkey’s obligations under the 1999 International Convention on the Suppression of the Financing of Terrorism, particularly with regard to non-indigenous groups; the low level of notifications of suspicious transactions; and poor implementation of anti-money laundering-legislation by the Turkish court system (Dunya, July 7).

The Turkish authorities subsequently passed measures to tighten the legal definition of the financing of terrorism (Official Gazette, No. 26693, November 7, 2007), improve coordination between state authorities against money laundering (Official Gazette, No. 26730, December 12, 2007), and increase the measures that should be taken to combat it (Official Gazette, No. 26751, January 9). Serious doubts remain, however, about how effective these changes will be in practice.

The Financial Crimes Investigation Board (MASAK), whose primary purpose is to combat money laundering, was first established in the Turkish Ministry of Finance in 1997. Its legal status and responsibilities were overhauled in 2006 (Law No. 5549 on the Prevention of the Laundering of Criminal Proceeds, published in the Official Gazette, No. 26323, October 18, 2006). In addition to its activities inside the country, it is faced with an additional problem: Turkey’s position on one of the main heroin trafficking routes into Europe has ensured that members of the Turkish underworld have been able to amass considerable fortunes, much of which has been ploughed back into the Turkish economy. Yet, in the 11 years since MASAK was founded, nobody has served time in jail in Turkey for money laundering.

According to MASAK’s own figures, from February 17, 1997, until December 31, 2007 (the latest period for which official data are available), a total of 231 money-laundering cases were filed with the Turkish courts, of which 170 were still continuing as of December 31, 2007. Of the 61 cases that had been concluded in the court of first instance, 51 resulted in acquittal and 10 in convictions. The court granted the right of appeal in 54 of the 61 cases. Of these 54 cases, 46 were still continuing. Of the other eight, the appeal courts ruled for an acquittal in seven and a retrial in one (MASAK Annual Report 2007, www.masak.gov.tr)

There is no reason to doubt the Turkish authorities’ determination to combat indigenous terrorist organizations such as the Kurdistan Workers’ Party (PKK), nor Prime Minister Recep Tayyip Erdogan’s personal antipathy toward organized crime groups such as those involved in narcotics trafficking; but, while there is no evidence to suggest that leading members of the ruling Justice and Development Party (AKP) have knowingly concealed illegal financial transfers, there have recently been disturbing signs of a lack of political will by some members of the government to subject those with whom they are personally acquainted, or whom they believe share their ideological affiliations, to legal scrutiny.

On September 17 in a court in Frankfurt, Germany, three members of the Deniz Feneri e.V. charity, which collected donations from Muslims in Europe, were convicted of embezzling 41.3 million euros (approximately $58 million) (see EDM, September 11). The convicted men confessed to having transferred a large share of the money to Turkey, where it was invested in businesses (Milliyet, Radikal, Hurriyet, NTV, September 18). The three convicted men, Deniz Feneri e.V., and the businesses in Turkey in which the embezzled funds were invested were all close to the AKP. Yet, not only was the AKP reluctant to launch an investigation into what had happened to the money after it arrived in Turkey, but when non-AKP Turkish newspapers published details of the verdict, together with documents apparently implicating AKP-appointed members of the bureaucracy, Erdogan instructed AKP supporters: “Don’t allow these newspapers into your homes” (NTV, CNNTurk, Milliyet, Radikal, Hurriyet, September 19).

The AKP’s apparent reluctance to subject its own supporters and acquaintances to judicial scrutiny came less than a month after former AKP Foreign Minister and now President Abdullah Gul formally pardoned 82-year-old Necmettin Erbakan, the doyen of the Turkish Islamist movement and under whose wings both Erdogan and Gul himself had begun their political careers. Erbakan had been convicted of embezzling treasury aid while head of the Islamist Welfare Party (RP). The original indictment also named Gul as a co-defendant, although his parliamentary immunity meant that he could never be tried (Radikal, August 20). Gul defended his decision on the grounds of Erbakan’s age, but he has not extended this courtesy to other elderly convicted criminals.

As a result, in addition to doubts about how effective Turkey’s new anti-money laundering-measures will prove in practice, there are also now questions about how evenly they will be applied. There is no reason to suppose that Deniz Feneri e.V. was involved in the financing of terrorism, but other organizations masquerading as Islamic charities undoubtedly are; including some that are active in Turkey.

Source: Eurasia Daily Monitor

Bulgarian Football Club Owner Charged with Money Laundering, Human Trafficking

Prosecutors indicted Monday the owner of Bulgaria's football club Spartak - Varna, Ivan Slavkov, for money laundering and human trafficking.

Slavkov, who is a councilor from the Turkish Ethnic Party in the municipal council in the seaside city of Varna, was also charged with drugs possession and incitement to prostitution.

The announcement was made by the defendant's lawyer Branimir Balachev in an interview for Darik Radio.

"Slavkov is in poor health condition but doctors declared he could be on life support while in custody," Balachev explained.

The municipal councilor will be put behind bars for 72 hours immediately after being discharged from the hospital he is currently taken to.

Source: Novinite

Cyprus: Money laundering law to EU standards

The Turkish Cypriot Parliament approved the ‘Money laundering crime prevention Law’ at Monday’s sitting

The National Unity Party (UBP), who has ended its Parliamentary boycott, also voted for the law. The draft bill was created using the current ‘Money laundering crime prevention Law’ as a basis and included suggestions from the European Union (EU) adjustment works and the negativities in the current practice. The law, which was passed by a majority, defines the procedures and principles to prevent the laundering of income from crime and the financing of terrorism.

EU standards will be ensured
Minister of Finance Ahmet Uzun, who gave the first speech during the debate on the draft bill in the Parliament General Assembly, said that they are aiming to overcome the inadequacies of the current procedure. Uzun stated that last year the EU Financial Action Task Force (FATF) committee was planning to show northern Cyprus as being amongst the countries laundering money but they did not use the fact that there are no financial police operating to EU standards; and following that there was 1½ year’s worth of work to be done by officials and professionals from Turkey. After the draft bill is approved the second step will be to set up a financial police organisation. The Minister said that in this way EU standards will be ensured in the prevention of ‘laundering’ of tainted money.

Committee studies
While answering those claiming that the draft bill is still immature CTP MP and President of Economy, Finance, Budget and Planning Committee Alpay Afsaroglu said that the committee had held 5 meetings already concerning this draft bill in addition to 4-5 study sessions. He stated that one incident concerning a person convicted in Britain for drug smuggling was dealt with in the framework of ‘The law for the prevention laundering of criminal gains’ and gave information regarding the incident. The bill, he said, will prevent crimes. This is also the general understanding around the world: “It seems that in this way it will be easier to fight against this crime.”
They had examined legislation from many countries including Turkey, Afsaroglu said, and they were not expecting serious problems to come up in the draft though if problems did surface they can be fixed. He continued to say that after the September 11 attack in the US the financing of terrorism was also included in the compass of the law and said that “laundering of criminal income” will be determined by the courts and that the new law also defines the “financing of terrorism” which is almost standard in many countries.

Prime Minister’s speech
In his speech, General President of CTP/BG, Prime Minister Ferdi Sabit Soyer congratulated the members of the committee and everyone who contributed to the law for their hard work.
Soyer explained that in time the law for the ‘Prevention of money laundering’ will be accepted in north Cyprus as after September 11 terrorism has been discussed around the world and certain rules were laid down first in the UN and then in the EU. The PM reported that the Greek Cypriot side makes propaganda against northern Cyprus by saying that it is “a paradise for the laundering of criminal money.” The government has now shown that it is serious in its intent to prevent tainted money entering the country, that they attend meetings of international institutions with the Turkish delegation, that they have reached a certain point in the works and that the draft has been prepared in this framework.

Soyer said that they will go to FATF’s meeting in the middle of February with this new law and will show that northern Cyprus has laws conforming to UN and EU standards.

http://www.observercyprus.com/observer/NewsDetails.aspx?id=2618