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Turkey guts cash screening at customs

May 18, 2015

Turkey has revised its customs regulations to the point where one Turkish headline described it as “Unlimited cash entry into Turkey now legalized.” Turkey said the regulations are an improvement compared to the old policy, but experts contacted by Al-Monitor said there was nothing wrong with the previous regulations.

What’s so problematic about this development is that Turkey has been used as a key transit point for money and fighters for the Islamic State of Iraq and Syria. And that was when there were at least some nominal controls at customs points. Now it appears to be open season.

The other rotten element of this story is that Turkey appears to have waited to change these regulations until just after they came off of the international financial watchdog FATF’s grey list. It’s as though they knew they couldn’t get de-listed with regulations like these, so the bided their time.

Read all about it (h/t @moscow_ghost):

No questions asked about Turkey’s suitcases full of cash

Author Pinar Tremblay Posted May 14, 2015

The Turkish Ministry of Customs and Trade issued new regulations April 15 for entering and leaving Turkey with any amount of cash. The new Customs Code had passed without much public attention until early May, when the news broke with the headlines “Hot money days are over, now starts the black money days” and “Unlimited cash entry into Turkey now legalized.”

Umut Oran, deputy of the main opposition Republican People’s Party (CHP), submitted a parliamentarian query asking why the previous Customs Code was replaced with the new code, which would enable suspicious financial transactions, thus increasing the risk for money laundering, terror financing and tax evasion.

In a rather foggy statement, Minister of Customs and Trade Nurettin Canikli said the previous code was unclear, adding there were contradictory clauses in the code, and customs personnel could not be flexible. He said they had only simplified the code. “We had many complaints from exporters bringing money into the country,” Canikli said. “It could be from various countries, such as Iran, Iraq, Syria, the Balkans, where there are no banking services. Frankly, why does it matter if the money comes in cash or through a bank as long as it is money earned from exports? If this is dirty money, it will not be allowed to enter the country. There are no changes with regard to unrecorded cash.”

Yet, all pundits whom Al-Monitor contacted — bankers, customs officials, economists, senior economy editors of reputable news networks — agreed that the vagueness was introduced with the new code, and none were able to see what was wrong with the old code.

The previous Customs Code, which was six pages, was seen as compatible with EU regulations. When questioned about the compatibility of the 2015 codes with the EU, Canikli said, “We are not a member of the EU, we are Turkey.”

Indeed, there is sufficient reason to worry about the 2015 Customs Code, which is two pages shorter than the 2013 version. Yet, with those two deleted pages are red flags. Turkey has been on the gray list of the Financial Action Task Force (FATF) since 2011. The FATF took Turkey off its list of high-risk and non-cooperative jurisdictions only in October 2014. Turkey came to the brink of suspension of its membership in the FATF in October 2012. In its latest report, the FATF was still concerned with Turkey’s ability to institute a system that would identify and freeze terrorist assets. The report warned about Turkey’s definitions for “terrorism financing” and stated that Turkey’s procedures for freezing the assets of identified groups were too slow.

Emin Capa, CNN Turk’s senior economy editor, told Al-Monitor, “Turkey worked real hard to get off the gray list of the FATF. I doubt the government would enact any legislation that would reverse the decision.” Yet Capa had serious concerns about the new code. “There are three troubling topics. First, the sentence ‘passenger cannot be compelled to make a declaration at customs.’ What does this mean?” he asked. This line was added to the updated 2015 Customs Code, while many other items were excised. This line is indeed contradictory with the inspection regime…

 

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