Due diligence on the decline under Erdogan
Chris Hamblin, Clearview Publishing, Editor, London, 29 January 2014
The law enforcers of Turkey are losing their jobs en masse as the Erdogan government spirals out of control in a maelstrom of corruption. Conditions have never been better for money-launderers who wish to use the country's financial system, and there are plenty of them.
Things are looking up for private bankers who wish to shade Turkish clients' money from home country inspection. The government of Prime Minister Recep Tayyip Erdogan has conducted a mass cull of law enforcers, especially on the financial side of operations. 350 policemen in Ankara have lost their jobs along with the men in charge of the country's organised crime, financial crime and anti-smuggling units.
The premier has said that judges and the police have been conspiring to topple his government, in the same way that Silvio Berlusconi railed against "politically motivated, left-wing" investigative judges in the run-up to his being found guilty of various crimes and sentenced to make a tough choice between community service and house arrest.
It does not take a historian or a political analyst to predict that this is the beginning of a money-laundering bonanza. Private bankers are expected to find inspections, as far as they occur already, less onerous and their correspondent relationships less well policed. Intra-bank payments from Turkey to the wider world will be less well scrutinised, although the affairs of 'politically exposed persons' might be exposed more readily if they are caught in the crossfire between Erdogan's supporters and opponents.
Turkey is both a transit and originating country for drugs and humans that are smuggled through the Balkan route. The exact value to Turkey of its heroin exports is unknown but experts estimate a range in the tens of billions of dollars per year. Most of the heroin going to Europe is manufactured in or passes through Turkey, which is in trouble with the Financial Action Task Force for its lax financial controls.
Turkey is also a conduit for the nuclear black market and terrorist money that flows between Western countries and the Kurdish PKK. For the record, Dubai, Spain and South Africa are other nuclear proliferation 'hotspots.'
Turkish high-net-worth individuals and/or PEPs have recently been embroiled in terrorist financing allegations as well. Photos of Prime Minister Erdoğan’s son meeting a suspected al-Qaeda financier in an Istanbul hotel have been leaked to the press and have caused damage to the premier's reputation. The photos allegedly show Bilal Erdoğan meeting Saudi Arabian businessman Yasin al-Qadi, whom the US blacklisted in April 2013 as an al-Qaeda funder. The premier’s security men allegedly escored al-Qadi to meet Bilal to discuss a real-estate deal worth $1 billion in Istanbul’s Etiler neighborhood. Also in December, Erdogan ordered the sons of three members of his own cabinet to be rounded up on suspicion of corruption, but only dismissed the leading prosecutor when his own son had been arrested.