Press Briefing – Assistant Secretary of the Treasury for Terrorist Financing Marshall Billingslea

Marshall Billingslea
Assistant Secretary for Terrorist Financing
U.S. Department of the Treasury
Press Briefing
Ankara, Turkey
July 20, 2018

Media:  The Treasury said recently that some countries who are not really able to [inaudible], and I was wondering if Turkey is one of those countries and whether this is what you discussed today in your meeting.

A/S Billingslea: Turkey, I’m here in Turkey because of the close relationship we have as a NATO ally and as a partner on so many of the important strategic issues we face in the world. And in fact we covered a lot of issues today. We also have a very good and close cooperation between the Department of the Treasury and the parts of the Turkish government that deal with terrorist financing. So a big part of our discussion is joint operations on countering the financing of terrorism, and the Turkish government has got a number of very important efforts underway that we are supporting and providing intelligence and other information to help them with their mission. And in return we also are receiving information about terror groups that we are investigating on our side, and this includes the PKK, Daesh and others.

We also, a major feature of our visit is to discuss the world’s worst sponsor of terrorism which is Iran. And to discuss the assessment that the United States has made regarding the various activities that the Iranian regime is engaged in, which are a direct threat to us in the United States as well as to Turkey and other NATO allies.

And specifically here I’m talking about their support to Hezbollah and Hamas, the Taliban, al-Qaida. If you name a terror group, the chances are that the Iranians are involved.

On top of that, we see the Iranians are creating instability across the Middle East with what they’re doing in Yemen by sending ballistic missiles to the Houthi rebels who then shoot those missiles at Riyadh in Saudi Arabia. What they’re doing in Iraq by arming these militias to target the populations there. By their efforts in Lebanon, their efforts in the Palestinian Authority and so on.

So we’re discussing all of these issues together. We’re explaining why we felt that in light of these behaviors by the Iranian regime and given the significant problems with the nuclear agreement, the terms of the nuclear agreement, that the President has in his decision to withdraw from the Nuclear Accord directed the Treasury Department to begin reimposition of sanctions on Iran to set the conditions for a revised set of negotiations that address all of the problems that are created by the regime in Tehran. And that’s what we’re here to do.

Obviously, Turkey as a neighbor of Iran, the issues of trade with Iran are very much something we have to talk about. But we are also very sensitive to the effect that could be had on the Turkish economy, and that’s why we’re discussing the very, very specific matters of concern to both countries.

At this stage we’re not in a position to suggest that we’re issuing waivers or exemptions or these kinds of things. It would be premature for me to discuss that. Rather, what we have to do is we have to understand the context, and we have to understand the specifics of all these different business transactions so that we can make assessments in Washington and make the best recommendations possible.

This is just the first of these conversations. There will be many more conversations. We encouraged a number of companies to come to Washington to have discussions. I don’t want to get into which ones, but you can figure that out. We also encourage the Turkish government to perhaps also have a round of meetings in Washington and then we will be back out here again to keep these discussions going.

Time is of the essence because the first of the major reimposed sanctions happens at the beginning of August, and then the sanctions on the oil trade and the Central Bank of Iran and these kinds of matters, these all happen in November. So we have a little bit of time on the oil issues and other things, but we do need to intensify our discussions, and in particular we need Turkish companies and Turkish banks to recognize that the reason we gave full 180 days before the sanctions was to allow companies enough time to wind their business down. So we very much want to see evidence of a winding down of business and that will affect our further decisions.

Media: …My question was that can we, how should we, read your visit to Turkey? Can we say that Washington may offer some exemptions to some countries including Turkey, maybe India, also India?

A/S Billingslea: No, you cannot assume that we’re offering exemptions or waivers. That would not be correct. That’s not what we’re here to do.

What you can understand from the fact that I’m here as a person both in my Treasury capacity but also as someone who’s worked very closely with Turkey in many different roles over many different years, that we’re here in the spirit of friendship and collaboration, and we’re having these discussions in the context of being NATO allies. And that’s very important. Because Iran may be a neighbor of Turkey but they’re not a friend or an ally. Let’s not make that mistake. But the United States considers itself both a friend and an ally of Turkey, and we also have, we also have very deep economic ties with Turkey that are important. Our banking relationships in particular are very very important.

So that’s kind of the framework of the discussions at this stage.

Media: Yesterday, to my knowledge, you had meetings with the business community.

A/S Billingslea: Yes.

Media: Today with the Turkish authorities. Regarding your meeting with the Turkish authorities, I wonder the reaction of the Turkish side. If the government will defensive [about] oil imports from Iran transactions. I’m asking because the official argument, the ‘on the record’ statements of Turkish authorities, are just that they will not cut any trade relations with Iran.

I wonder [about] your assessment today. Did they defy or did they ask any possibility for a reduction of oil imports or any kind of exemptions in the future? To discuss in the future?

A/S Billingslea: It was a very positive discussion today. It was not conflict. We were not clashing in any way today.

Rather, what we were discussing was the United States, we made our presentation to explain in very clear terms to many different ministries why we were taking the steps that we were taking. What is motivating us? What are the concerns we have? I mentioned the terrorism issues with Iran, the ballistic missile issues with Iran, and the holes, the big problems with the nuclear agreement itself. So we talked a lot about that.

Then we talked a lot about the details of the sanctions that the President has directed the Treasury to impose and why we are imposing these sanctions. And what we explored with the government of Turkey are the potential implications for Turkish companies and the Turkish economy, different measures. And we agreed today that as allies this is something that we have to continue to study and continue to exchange details on because these are significant issues.

I do not want to downplay the importance in our relationship of the financial ties that the two countries have. At the same time we recognize the situation regarding oil and some of the other products that are imported into Turkey from Iran. But I would say it was a very positive discussion. There was no hostility on either side.

Again, we discussed it in the context of friends and allies.

Media: — Ministers is [inaudible] for Treasury and Turkish Ministers. They have a meeting on July 20 in Buenos Aires?

A/S Billingslea: I’m actually headed to Buenos Aires here at 2 o’clock, so I’m hopeful that there will be discussions. I don’t know if a meeting has been set or not. But these are all such significant issues that Ministers, I’m sure Ministers will be talking about these things in the future.

Media: I got a question about, as you know, the nuclear agreement that the U.S. signed with Iran was considered as null and void with the new administration. But just like the European Union countries, Turkey is not quite [affirmative] towards this action from the Trump administration. Do you think we could see a new nuclear agreement in which Turkey’s involved in the foreseeable future?

A/S Billingslea: What the United States wants is for Iran to return to the negotiating table and to address the different dangerous activities that they are involved in. And the Secretary of State, Secretary Pompeo has laid out in a speech fairly recently the actions that Iran needs to undertake to address these concerns.

These are concerns that are not just affecting the United States and Turkey. They’re affecting Saudi Arabia, they affect Iraq, they affect Lebanon and Israel and the Gulf nations. So there are a lot of countries that are very worried about what Iran is doing. Not just some of the European Union countries, but many countries are suffering under Iran’s very destabilizing support for terror groups, so Iran has to address that.

I think that you will find that the United States and Turkey very much see eye to eye on stopping terrorism and stopping the financing of terrorism. I think the question is how do we best do that together? And that’s what we’re working on.

Media: But possible Turkish involvement in a new nuclear agreement?

A/S Billingslea: What I would say is that one of the main failings of the way the previous negotiations happened I think is that U.S. allies and friends were not sufficiently kept aware and involved and given the details of where the discussions occurred. And we intend to make sure that our NATO allies are kept fully and currently informed of the progress we are making.

I don’t necessarily know that we need to have 28 countries at the same negotiating table. That would make it kind of hard. But we definitely will be getting the opinions and views of our allies as we go forward. We will not be ignoring them the way it was done previously.

Media: Can I ask, with the issue of possible fines, the Halkbank discussed —

A/S Billingslea: We did not discuss that, and because that’s a pending enforcement process in the United States I wouldn’t be in a position to discuss that anyway.

Media: But that would fall within your scope of —

A/S Billingslea: Those kinds of matters do.

Media: I mean it could relate to your [agency] and the manager of Halkbank was found guilty.

A/S Billingslea: But as you might recognize, we just don’t comment on pending law enforcement matters.

Media: I have, under the previous term, the previous sanctions by the U.S., for the case of Turkey we see that we have come to the trial of, I mean the Deputy Chairman of Halkbank. So for this time, actually, yeah, that previously Turkey found some ways to manage to make trade with Iran to gold and maybe it will be different with yuan.

Actually, I want to ask if, what will be, do you think that the U.S. approach will be different this time, just to have success, achieve success to [stop] the trade relations of Iran with the neighboring countries? I’m asking for the case with Turkey. Do you think this time to be more successful?

A/S Billingslea: I believe that this time around the Treasury sanctions will be enforced very, very aggressively and very comprehensively.

Media: More than in —

A/S Billingslea: Even more. And the reason for that is because the Iranian behavior has become so concerning that they risk triggering crisis in the Middle East.

What happens if one of those missiles lands in Riyadh? What happens if the Iranian backed militias do something, miscalculate in Syria with Israel? We’re in a very dangerous situation being created by the Iranians and therefore, we feel that the economic pressure is the appropriate way to tackle this problem to avoid any kind of miscalculation.

So you should expect that we will be very active on this. Much more active even than in the past. And in the past I would say there was a lot of work that was done. So, and I think the Turkish government understands our position on that.

In terms of efforts to evade sanctions, which you asked about, we would certainly encourage that efforts not be made to do that. And we certainly would be very, very concerned about trying to trade with Iran in gold. That is something that will become sanctioned at the beginning of August. We are tracking large purchases of gold in Turkey these days, and we’re trying to understand why that’s happening. But I think some of that has to do with currency issues and other things, but it certainly would be a very bad idea to think that somebody is going to trade with Iran in gold and avoid U.S. actions if that occurs.

Anadolu Agency: What if any yuan currency or any goods to oil from Iran? Will those [be sanctioned]?

A/S Billingslea: We’re not singling any one company or any one country out when it comes to the oil trade. Our approach has been very firm across the board with every country. India, Turkey. We are not in a position to signal flexibility in the oil trade at this stage, but we need a lot more information and a lot more details before we could make such a signal.

Media: Sir, you said a few minutes ago that the United States is NATO partner, NATO ally for Turkey, and Iran is definitely not a friend or ally for Turkey. But the Turkish government has been, has had a different opinion over the course of the last two years, especially after the American support for the YPG.

Is Turkey really a hundred percent behind the United States in imposing these sanctions against Iran? And behind the sanctions against any economic activity with Iran?

A/S Billingslea: The Turkish government has to speak for itself on the position it wants to take.

I would say —

Media: From your perspective.

A/S Billingslea: I think we have a really significantly positive development in the fight against terrorism. I am personally involved in supporting effort son the PKK. We in fact were here to provide additional information to the government of Turkey on PKK operatives and their locations and what they’re doing, and we are committed to that because we view the PKK as a terror group that has American blood on its hands also. And as well, we had some very good discussions today on Daesh and on stopping the financing of Daesh entities that are in the region.

So those are all very, very positive.

On the matter of Iran, I do believe, I actually believe that we as allies see Iran in a very similar light. I think what we have to work on is we have to come to a consensus on the best way to work together to stop the Iranian behavior, and that’s where we’re focusing our efforts right now.

There are obviously financial implications to this. That’s why we’re here. We want to discuss these matters before the sanctions become imposed, and we want to find a good way ahead.

Media: Are you going to any other countries after this? [Inaudible]?

A/S Billingslea: I think so far there have been, the U.S. government, well, the U.S. government’s been in constant discussions with a lot of countries, and I have been talking on the phone with Turkish officials for many, many months. This didn’t just start today or yesterday. In fact I was here just a few months ago.

So these discussions will continue but it’s very important to be here personally to have these conversations so that I can talk with as many possible officials in the Turkish government and also as many people in the business sector and in the banking sector as possible so that we can have an exchange of views. We can answer questions on the details on, you know, very important questions like are you going to prohibit, my company sells textiles. Can I keep selling textiles to Iran? And so a lot of our discussions with the private sector were to handle those kinds of very detailed questions.

We’re not talking about a full embargo on Iran. That is not what the United States is saying. But we are talking about a prohibition on certain activities in the banking sector, in metals, in the oil and gas world, and those are big financial issues and they’re important issues to the Turkish economy. So that’s why we felt it was important to be here.

I will also be going to many other countries in the future.

Media: My question was whether you’re focusing on countries who are, you know, import the bulk of their oil supplies from them. The focus of your talks.

A/S Billingslea: In my capacity as an Assistant Secretary I’m focused on the countries of sort of geostrategic importance to this effort.

Media: So are we talking about reduction of oil imports? Or just cut imports to zero?

A/S Billingslea: It’s up to the Department of State to declare whether we’re talking about zero or significant reductions. The Treasury Department sanctions are very specifically directed to encourage a wind-down before November of all transactions.

We’re not being absolutely unequivocal on this because we do need more information and details, but again, we weren’t here to immediately start discussing waivers or exemptions. That was not on the table. We would need a lot more of an understanding of the situation before we could have that kind of discussion.

Media: But I mean the embargo will go into full effect in November, is that right? So —

A/S Billingslea: The sanctions will go —

Media: I mean the parties will decide on which areas they will do, I mean their capacity to degrees or?

A/S Billingslea: Again —

Media: [Inaudible]?

A/S Billingslea: It is the moment at which the sanctions go back into force, and so at that point we definitely are encouraging companies to have wound down their business. That’s why we gave the 180 days. Again, it really, it’s up to the individual companies to make their business decisions. We’re not in a situation where we’re trying to dictate to Turkish companies what to do. We want to educate Turkish companies but also we have to be very clear that in the areas where sanctions will be imposed, companies have to make an informed business decision. If you want to continue to do business with Iranians in these prescribed areas, that is a business decision that you can make. But they have to understand that they will not do business in the U.S. market or with the U.S. financial system if they do that. That’s a totally reasonable business calculation that can be made and should be examined by businesses not just in Turkey, but India and everywhere else.

We’re hopeful that they will wind the business down. We’ve shown a willingness to talk about that. Secretary Mnuchin very recently in fact said that we will, if we see that there’s a wind-down, we will be flexible in how we talk about these things and work on these things together. And I would refer you back to his comments on that because they’re very important.

But at the same time, we do have to stress that any company that is engaged in these prohibited transactions, if they keep doing so after either the August or the November roll-out of the sanctions, they are running business risk.

Media: Can I please ask you to elaborate on the fact that you are here also to provide extra information about the PKK? Can you please elaborate on that? I couldn’t quite get the sense. I mean what kind of extra information that you can share with Turkish authorities?

A/S Billingslea: I’m certainly not going to be able to share the details. What it shows, what it demonstrates is that we have, as allies, we have a diverse and multi-faceted security relationship with each other that covers a lot of different topics, and the matter of Iran and their behavior is a crucial topic, but it is not the only one. We have a lot of other areas that we work together on in close collaboration, and those areas are actually increasingly close and increasingly positive and the PKK areas is one where we have long designated the PKK as a terror group for their behavior, and we have intensified our cooperation with Turkish authorities on this topic.

Media: Since when?

A/S Billingslea: For the past many months. But I was, a series of requests were made to me on matters that we have investigated, and I was here to share the results of our investigation.

Media: What has changed with respect to the United States administration in intensifying fight against PKK?

A/S Billingslea: What has, well, what’s changed is you have a new government in the United States. President Trump and his perspective and his desire to work very closely with the government of Turkey on these topics.

Media: Okay. Thank you very much.

A/S Billingslea: Thanks, guys.

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