Is Turkey's lax oversight keeping PKK flush with funds?

While the Turkish public is asked to mobilize against PKK terror, are the government’s efforts to curtail PKK financing and money laundering enough?

al-monitor People sit at an open-air tea house in the Kurdish-dominated southeastern city of Diyarbakir, Turkey, March 20, 2015.  Photo by REUTERS/Umit Bektas.
Pinar Tremblay

Pinar Tremblay

@pinartremblay

Topics covered

taxes, pkk operations, pkk, kurds in turkey, kurdish issue, financing, european union, cigarettes

Apr 4, 2016

In our quest to find the best tea in Istanbul, my friends and I recently stopped by Van Sofrasi, a restaurant chain named after the eastern province of Van famous for its lavish morning feasts. Unfortunately, as it turns out, we found that it is merely an urban myth that the smuggled mahogany-colored tea from Iran and Syria is the best.

​As we sat down, a news reporter on TV announced that a truck loaded with smuggled cigarettes worth 4 million Turkish lira (about $1.5 million) had been seized in the largely Kurdish southeastern province of Diyarbakir.

As the Turkish public is asked to mobilize against terror, operations against smuggling have intensified. Yet in this tense environment, it is hard to find recent news or debates about the government’s efforts to dry up the coffers of the Kurdistan Workers Party (PKK). The waiter at Van Sofrasi said, “After the fighting started in the east, you know many Turks stopped coming here, saying they don’t want to support the PKK. But our tea is addictive, so now they call and ask for delivery.” Pointing to a sizable thermos, he added, “We deliver in style.”

Can one be supporting a terror organization by consuming smuggled goods? Social media chatter focuses on signs at stores reading “HDP [pro-Kurdish Peoples' Democratic Party] members cannot enter” or “Do not buy from PKK members.” Even writing a petition to the government asking for peace and reconciliation with the terror organization is considered a crime. Government representatives reiterate that the PKK and its offshoot organizations are as dangerous for Turkish national security as the Islamic State and other Islamist terror organizations.

Indeed, since the peace process ended eight months ago, Turkey's official death toll of security personnel — excluding civilians — has surpassed 400. While the government keeps telling people the battle against the PKK is successful, the rising number of casualties makes one wonder. Is it sufficient to deploy more troops into the cities to battle PKK terror? For the duration of the peace process, what was accomplished to curtail PKK financial sources?

A two-star retired general who asked to remain anonymous told Al-Monitor, “If anything, during the peace process, the PKK and its allied organizations got richer. We had the upper hand, as Syria and Iran were willing to cooperate with us prior to 2011 — the start of Syrian civil war. The government knew well [that] even in northern Iraq, Kurdish entities charged an exorbitant illicit tax on Turkish businesses, and all around Turkey and Europe, Kurdish businesses had to pay through extortion — and the AKP [Justice and Development Party] turned a blind eye.

"The PKK sustains its finances through smuggling, extortion and money laundering. With the start of the Syrian civil war, the PKK gained better financial means. … So smuggled tea is the least of your worries.”

Ali Nihat Ozcan, a professor of international relations from TOBB University of Economics and Technology in Ankara who studies terrorism and the PKK, told Al-Monitor that, as the peace process collapsed, the government tried to curtail the PKK’s financial resources, yet “the operations only had a limited effect on the PKK."

"The PKK’s main funding comes from HDP municipalities’ support," Ozcan said. "The military operations had a direct impact on how much HDP’s local governments can help PKK. Dozens of elected HDP officials are now in jail. Now there is more vigilant border control, which limits smuggling. Also, the PKK’s ability to collect donations from the public is curtailed because it is now busy fighting.”

Yet when asked if these efforts can be considered effective, Ozcan was pessimistic. “The PKK does not work with banks; it works with cash. And about 45% of the Turkish economy is informal, underground. Since during the peace process PKK was allowed to strengthen its income sources, the current efforts are not sufficient.”

Ryan Gingeras, an associate professor at the Naval Postgraduate School in Monterey, California, concurs with Ozcan that, while it is difficult to gauge, the impact of government operations on PKK finances cannot be called effective based on the government's 2014 KOM Anti-Smuggling and Organized Crime Bureau report.

“According to the 2014 KOM report, smuggling across the Turkish frontier has risen dramatically as a result of the conflicts in Syria and Iraq. In addition to the more-reported commodities such as oil, cigarettes and people, an immense array of smuggled goods [such as medicine, cellphones and cars] are traded along the southern Turkish border," Gingeras told Al-Monitor.

"To genuinely evaluate the financial impact smuggling has on the PKK, one really must consider that smuggling is the economy for many rural communities in Anatolia, not just for border communities. Since the founding of the republic, Ankara has seen smuggling as a critical enabler of Kurdish militancy. It is [an enabler], if one also accepts that it is the lifeblood of the regional and, to some degree, the national Turkish economy as well. [The government] has tried many things — mining the border, closer monitoring of automobile traffic with checkpoints and military/gendarmerie patrols. Since 1923, government efforts to deal with smuggling through force or criminalization has had no discernible impact on illegal trade,” Gingeras concluded.

Analysts agree that the PKK has benefited from several situations: the lack of planning during the peace process to control its finances, the oddly intertwined nature of the Turkish underground economy with the PKK’s and organized crime networks' livelihoods, and the lack of proper cooperation between Turkey and other European countries. Indeed, the PKK is known to accrue income not only from narcotics and other types of smuggling, but also by pressuring Kurds to donate money to it in Europe; it also makes money through legitimate businesses, such as media outlets. In addition, Turkey has failed to develop a system to curtail the group's global income sources.

The longer an armed non-state organization survives, the harder it becomes to eliminate. The PKK has been operational for more than 35 years and cannot be eliminated while its finances thrive.

Is Turkey's battle against the PKK sincere? Can the government wage a comprehensive war to eliminate terror while enabling its thriving economy? Is it really the smuggled tea and cigarettes that are enriching the PKK and allowing it to purchase weapons and arms, or is it the inefficient financial accountability of the Turkish economy? The recent changes in Turkey's customs code, which allow for unlimited cash to enter into the country without any reporting, could be a factor that helps terrorism financiers. With laws that turn the country into a haven for money laundering, how can Turkey seriously claim to want to end terrorism?

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