MASAK Activity Report.pdfTABLE OF CONTENTS STATEMENT BY HEAD OF MASAK viii I. COMBATING AGAINST...

REPUBLIC OF TURKEY

MINISTRY OF FINANCE

FINANCIAL CRIMES INVESTIGATION BOARD

MASAK ACTIVITY REPORT 2012

TABLE OF CONTENTS

STATEMENT BY HEAD OF MASAK ...................................................................................... viii

I. COMBATING AGAINST LAUNDERING PROCEEDS OF CRIME AND FINANCING

OF TERRORISM ............................................................................................................................ 1

II. OVERALL INFORMATION ON MASAK ........................................................................... 3

A. Vision and Mission .............................................................................................................. 3

B. Power, Functions and Responsibilities................................................................................ 3

C. Administrative Structure Information ................................................................................. 4

1. Position in the Ministry and Organizational Structure .................................................... 4

2. Human Resources ............................................................................................................ 7

III. PURPOSE AND OBJECTIVE ............................................................................................. 10

A. Purpose and Objective ....................................................................................................... 10

B. Essential Priorities ............................................................................................................. 10

IV. INFORMATION AND ASSESSMENTS ON ACTIVITIES ............................................... 11

A. Fiscal Information ............................................................................................................. 11

B. Information on Performance ............................................................................................. 13

1. Regulation and Coordination Activities ........................................................................ 13

1.1. Coordination Board Meetings ............................................................................. 13

1.2. Other Activities ................................................................................................... 14

2. Studies for Detection and Prevention of Laundering and Financing of Terrorism ....... 14

2.1. Data Collection Activities ................................................................................... 15

2.1.1. Suspicious Transaction Reports...................................................................... 15

2.1.2. Requests for evaluations and examinations made by Public Prosecutor’s

Offices and Courts ................................................................................................... 20

2.1.3. Other Reports as of years (2006-2012)........................................................... 21

2.1.4. Information Requests ...................................................................................... 24

2.2. Analysis, Evaluation and Examination ............................................................... 25

2.2.1. Analysis and Evaluation ................................................................................. 26

2.2.1.1. Analysis and Evaluation regarding Laundering Offence ........................ 26

2.2.1.1.1. Institutions Informed after Analysis and Evaluation ........................ 30

2.2.1.1.2. Subjects of Predicate Offences Revealed After Analysis and

Evaluation ......................................................................................................... 31

2.2.1.2. Analysis and Evaluations related to Terrorist Financing Offence........... 32

2.2.1.2.1. Institutions Informed after the Analysis and Evaluations ................ 34

2.2.1.3. General Analysis ..................................................................................... 35

2.2.1.3.1. Strategic Analysis and Evaluation .................................................... 35

2.2.2. Examinations into Laundering Offence .......................................................... 35

3. Supervision of Obligations ............................................................................................ 39

3.1 Supervisions of Compliance with Obligations ....................................................... 39

3.2. Examinations of Violations of Obligations and Administrative Fines Imposed . 40

3.3. Judicial Penalties ................................................................................................. 42

4. Activities Related to Foreign Relations ........................................................................ 43

4.1. FATF -Turkey III. Round Mutual Evaluation Process ....................................... 43

4.2. The Process of “International Cooperation Review Group (ICRG) in FATF -

Turkey Relation ............................................................................................................ 44

4.3. Memorandums of Understanding (MOUs) Signed with Counterpart Institutions ..

............................................................................................................................. 46

4.4. Meetings Abroad ................................................................................................. 47

5. Training and Informing Activities and Other Activities for Increasing Public Awareness

....................................................................................................................................... 48

5.1. In-house Trainings ............................................................................................... 49

5.2. Training Activities for Obliged Parties and Other Public Institutions ................ 49

6. Information Technologies and Communication Activities ........................................... 50

6.1. Enhancement Program of Administrative Capability ......................................... 51

6.2. MASAK IT Modernization Program .................................................................. 52

C. Performance Results .......................................................................................................... 54

1. Table on Performance Results ....................................................................................... 54

2. Evaluation of Performance Results ............................................................................... 68

3. Evaluation of Performance Information System ........................................................... 69

V. ASSESSING INSTITUTIONAL CAPABILITY AND CAPACITY ................................... 69

A. Analysis of Strong and Improvable Qualifications, Opportunities and Threats (GZFT

Analysis) .................................................................................................................................... 69

VI. CONCLUSION ..................................................................................................................... 70

TABLES

Table 1– Dispersion of Personnel (2003-2012) ......................................................... 7

Table 2– Numbers of Personnel As Per Titles (2012) ............................................... 8

Table 3– Personnel’s Age Profile (2012) ................................................................... 9

Table 4- Public Staff Foreign Language Knowledge (KPDS) level of MASAK

Personnel* .................................................................................................................. 9

Table 5- Economic Classification of Budget Allowance Allocations and

Expenditures (2008-2012)(TL) ................................................................................12

Table 6- The General Dispersion of the Reports Sent in 2012 ................................15

Table 7- The Numbers of STRs and the dispersion of them in respect of their

sources (2006-2012) .................................................................................................16

Table 8- Dispersion of Number of Financial Institutions Sending STRs in Financial

Sector as per years (2006-2012) ...............................................................................18

Table 9- Suspicious Transaction Types as to the Nature of Suspicion (2012) ........19

Table 10- Requests for evaluations and examinations made by Public Prosecutor’s

Offices and Courts ....................................................................................................20

Table 11– Number and Sources of Other Reports (2006-2012) ..............................21

Table 12– Number of the Referrals and their Alleged Subjects (2012) ..................23

Table 13– Exchange of Information with Foreign Counterparts (2006-2012) ........24

Table 14– Analysis and Evaluation Files Concluded (2003-2012) .........................26

Table 15– Subjects of the Analysis and Evaluation Files (2008 -2012) ..................28

Table 16- Institutions provided with intelligence after analyses and evaluations

(2012) .......................................................................................................................30

Table 17- Subjects of Intelligence Provided After Analysis and Evaluation .........31

Table 18– Analysis and evaluation files concluded by years (2008 – 2012)* ........32

Table 19– Number of Persons Denounced (2009-2012) .........................................33

Table 20- Institutions provided with intelligence after the analyses and evaluations

(2012) .......................................................................................................................34

Table 21- Examination Files Concluded related to Laundering Offence (2008 –

2012) .........................................................................................................................36

Table 22- Number of Persons Denounced based on the Analysis and Evaluation

Files/Examination Files related to Laundering Offence (2008-2012) .....................37

Table 23– Number of Persons Denounced as to Predicate Offences (2008-2012) .38

Table 24– Supervision of Compliance with Obligations (2009-2012) ....................39

Table 25– Obliged Parties subject to Administrative Fine (2008-2012) .................40

Table 26– Acts subject to Administrative Fines (2008 – 2012) ..............................41

Table 27– Amount of Administrative Fines (2008-2012) .......................................41

Table 28– Number of Cases and Persons Referred to Public Prosecutor’s Office

(2008-2012) ..............................................................................................................43

Table 29– Training and Information Activities (2012) ............................................50

Table 30– GZFT Analysis ........................................................................................69

FIGURES

Figure 1- MASAK’s Position within the Ministry of Finance .................................. 5

Figure 2– MASAK Organization Chart ..................................................................... 6

CHARTS

Chart 1– Dispersion of the Personnel as per titles (2012).......................................... 7

Chart 2– Dispersion of the Personnel As Per Their Ages (2012) .............................. 9

Chart 3– Percentages of Expenditures (2012) ..........................................................13

Chart 4- Numeric Trend of Suspicious Transactions Reports as per years (2006-

2012) .........................................................................................................................17

Chart 5- Numerical Trend of Financial Institutions Sending STRs as per years

(2006-2012) ..............................................................................................................18

Chart 6- Suspicious Transaction Types as to the Nature of Suspicion (2012) ........20

Chart 7- The Numerical Trend of Requests for Evaluations and Examinations made

by Public Prosecutor’s Offices and Courts (2006-2012) .........................................21

Chart 8– Sources of Other Reports (2012) ...............................................................22

Chart 9– Number and Subjects of Referrals (2012) .................................................23

Chart 10- Foreign Counterparts making the highest number of requests (2012) ....25

Chart 11– Conclusion Rate of Analysis and Evaluation Files (2003 – 2012) .........27

Chart 12- Institutions provided with intelligence after analyses and evaluations

(2012) .......................................................................................................................30

Chart 13- Subjects of intelligence provided after the analysis and evaluations

(2012) .......................................................................................................................32

Chart 14- Conclusion ratio of the analysis and evaluation files (2008-2012) .........33

Chart 15- Percentage Distribution of the Persons Denounced (2009-2012) ...........34

Chart 16- Institutions provided with intelligence after the analyses and evaluations

(2012) .......................................................................................................................35

Chart 17- Examination Files Concluded related to Laundering Offence (2008 –

2012) .........................................................................................................................36

Chart 18- Number of Persons Denounced based on Files on Analysis and

Evaluation/Examination of Laundering Offence (2008-2012) ................................37

Chart 19- Number of Persons Denounced as to Predicate Offences (2008-2012) ..38

Chart 20- Obliged Parties subject to Administrative Fines (2008-2012) ................40

Chart 21- Acts subject to Administrative Fines (2008 – 2012) ...............................41

Chart 22- Amount of Administrative Fines (2008-2012) ........................................42

STATEMENT BY HEAD OF MASAK

Financial Crimes Investigation Board (MASAK) continued its activities intensively in 2012 as

well in combating money laundering and financing of terrorism; analysis, evaluation and referral

of data to relevant units obtained in relation to offences of money laundering and financing of

terrorism that are main functions of a financial intelligence unit; regulation and coordination;

money laundering investigations, supervision of obligations; training obliged parties and law

enforcement units and informing them.

Training activities for the purpose of enhancing awareness and effectiveness of employees of

obliged parties of obligations known as “preventive measures” in fighting against money

laundering and financing of terrorism and in implementing these measures remained in 2012.

In the framework of the works of MASAK performed to enhance suspicious transaction report

system, a workshop was organized for banks’ compliance officers and officials in Istanbul for the

purpose of introducing MASAK.ONLINE System and assessing it that was created by improving

available electronic suspicious transaction reporting (e-ŞİB) system.

As a result of training activities and workshops, the number of financial institutions besides

banks sending suspicious transaction report increased to 108 in 2012 compared to 91 in 2011 and

also the number of suspicious transaction report received from financial institutions besides

banks increased to 1.450 compared to 585 in 2011.

The number of suspicious transaction report increased to 15.318 compared to 8.739 in 2011.

Application of suspicious transaction reporting in electronic environment was started first in

banking sector and 99.7 % out of 13.801 total suspicious transaction report received from

banking sector was sent through electronic environment.

Main reason of the dramatic increase in suspicious transaction reports is the application of new

“electronic suspicious transaction reporting” system installed in 2012. That reporting in

electronic environment is secure, fast and easy way contributes the increase of number of report

in banking sector.

The activities which were carried out by the IT Directorate within MASAK are performed via

newly established “IT Technologies and Communication Group”. In the scope of analysis

conducted for information technologies and communication activities, “Programme on

Modernization of MASAK Information Systems” was prepared. The programme is composed of

two projects under the titles of “Project on Modernization of MASAK Information Systems” and

“Effectiveness in Combating Money Laundering and Financing of Terrorism”.

The most important outputs of the activities carried out in 2012 are Integrated Financial

Intelligence System (EMİS) developed for MASAK within the framework of improvement of

institutional applications and MASAK.ONLINE System. Due to EMİS and MASAK.ONLINE

System, the solutions produced by integrating softwares with different capacity and feature are

changed into other specific softwares produced for all of the needs of MASAK. At the same

time, thanks to EMİS, automation has been provided in the processes of data collection,

integration and analysis which are the stages of financial intelligence.

On the other hand, a training activity where we shared our experience and knowledge was

organized for Turkmen officials in order to contribute to their efforts to establish necessary

institutional and legislative infrastructure in combating money laundering and financing of

terrorism.

In the framework of supervision of compliance programmes, supervisions were continued and 53

supervisions within obliged parties were completed.

As a result of analysis and evaluations conducted for money laundering offence within MASAK,

relevant institutions were informed of 1.641 persons in the scope of the cases associated with the

offences in their field. Furthermore, MASAK referred 275 persons to Public Prosecutor’s Offices

on the ground of commitment of laundering offence as a result of evaluations and examinations

completed in 2012.

Following analysis and evaluations carried out by MASAK related to the offence of financing of

terrorism, we shared information about 22.370 natural and legal persons with concerned

institutions in 2012 compared to 987 in 2011.

Activities of promoting cooperation with counterpart units in foreign countries were continued in

2012 and MoUs were signed with financial intelligence units of USA, Netherlands, Belgium,

Poland, Malaysia, Kosovo, Russian Federation and the Republic of Philippines for the purpose of

cooperation in combatting money laundering and financing of terrorism.

I hope the 2012 Activity Report covering the information about the actions performed by

MASAK will be successful within the context of fulfilling the function of informing public and

on this occasion thanks my workmates for their efforts on preparing the report.

Ankara, 15/03/2013

Mürsel Ali KAPLAN

Head of MASAK

1

I. COMBATING AGAINST LAUNDERING PROCEEDS OF CRIME AND FINANCING

OF TERRORISM

Broadly, laundering means inserting ill-gotten gains into the economic system by legitimizing

them via disguising their illegal origin and changing their nature. The main purpose in

distinguishing laundering offence from the predicate offence which forms the origin of it is to

prevent offences committed to get gains by depriving those who benefit from proceeds of crime

from these gains. Therefore, fight against laundering offence is regarded as an important

instrument for the fight against predicate offences.

Fight against money laundering has two dimensions which are preventive and repressive

measures. Repressive measures with respect to detection of criminal and proceeds of crime after

commission of crime covers criminalization of money laundering, detection, investigation, trial

and conviction of launderers, detection, tracing, seizure and confiscation of laundered assets

were regulated by the Turkish Criminal Code No. 5237.

Since, developments in IT and variations in financial instruments have caused the economic

system, especially financial activities, to become faster, more complex and borderless, which has

created opportunities for money launderers and financers of terrorism. Thus, measures for

preventing proceeds of crimes from being inserted in the economic system has become more

important than ever in the fight against money laundering and the financing of terrorism.

In this framework, effective implementation of preventive measures by obliged parties such as

CDD, STR, internal control and internal audit, risk management and assigning compliance officer

set forth for the purpose of fighting against laundering of proceeds of crime and financing of

terrorism ensures prevention of laundering activities before commission and use of financial

system as a means of commission of these offences.

International regulations have also emphasized on the importance of preventive measures in the

fight against laundering proceeds of crime and financing of terrorism and the countries have been

called to take necessary measures in this scope.

The United Nations Convention against Transnational Organized Crime (Palermo Convention)

prepared by the UN in 2000 for the purpose of preventing transnational organized crimes and

enhancing cooperation among countries within this framework and to which Turkey became a

party on 30.01.2003 is the first instrument prepared for fight against organized crimes and

includes preventive measures for combating money laundering. The Convention also deals with

preventive measures aspect of the issue by requiring banks, non-bank financial institutions and

other bodies particularly susceptible to money-laundering to implement customer identification,

record-keeping and suspicious transaction reporting measures and thus required countries to

make necessary legal regulations within this framework.

The financing of terrorism means providing or collecting funds willfully and knowingly that they

will be used in committing terrorist activities. It is vitally important in the fight against terrorism

to eliminate financial sources of terrorist organizations and to prevent distribution channels of the

funds acquired. Beside classical measures and implementations in the fight against terrorism

which gained an international dimension and has reached significant amounts of funds, financial

sources of terrorist organizations should be eliminated as well. This requirement has added the

dimension of “the fight against financing of terrorism” to the fight against terrorism.

2

On the other hand, International Convention for the Suppression of the Financing of

Terrorismprepared by the UN in 1999 for the purpose of developing cooperation among countries

to adopt and establish effective measures for preventing the financing of terrorism and to which

Turkey became a party on 10.01.2002 also deals with preventive measures within the framework

of the fight against the financing of terrorism, and countries are called upon to take measures

requiring financial institutions and other professions involved in financial transactions to utilize

the most efficient measures available for the identification of their usual or occasional customers,

as well as customers in whose interest accounts are opened, and to pay special attention to

unusual or suspicious transactions and report transactions suspected of stemming from a criminal

activity, and states are called upon to audit all fund transfer institutions for the prevention of

terrorist financing and to take measures to detect or monitor the physical cross-border

transportation of cash and bearer negotiable instruments, subject to strict safeguards to ensure

proper use of information and without impeding in any way the freedom of capital movements.

In this respect, essential preventive measures related to money laundering and the financing of

terrorism are dealt with in Turkey by the Law No. 5549 on Prevention of Laundering Proceeds of

Crime. A general framework for these measures has been drawn by the Law upon a legal basis

and detailed legal arrangements has been set forth to be made by secondary legislation

considering variations in financial instruments and the number of laundering methods increasing

day by day.

Within this framework, the Regulation on Measures Regarding Prevention of Laundering

Proceeds of Crime and Financing of Terrorism, the Regulation on Compliance with Obligations

of Anti-money Laundering and Combating the Financing of Terrorism and MASAK General

Communiqués No. 5, 6, 7, 8, 9 were issued. 19

Preventive measures are defined in detail in the “Regulation on Measures Regarding Prevention

of Laundering Proceeds of Crime and Financing of Terrorism” which was published in the

Official Gazette No 26751 on 09.01.2008. Detecting customers, business relationships and

transactions considered to be highly risky in terms of money laundering and the financing of

terrorism is listed as a measure required to be taken in addition to customer identification for

customer due diligence which is the most important element in the prevention of laundering

offence. Also, the requirement of suspicious transaction reporting which is one of the main

elements of preventive measures is rearranged in the Regulation, and obliged parties are required

to pay special attention to complex and unusually high-amount transactions, thus, ensuring

monitoring of this kind of transactions.

Prepared for ensuring the compliance with obligations within a system to be established by

obliged parties and depending on the Law No 5549, Article 5 on “Training, Internal Control,

Audit and Risk Management Systems and other measures”, the Regulation on Compliance with

Obligations of Anti-money Laundering and Combating the Financing of Terrorism includes

provisions for compliance program to be established by each obliged party with a risk based

approach. This provision is essentially for ensuring the effectiveness of preventive mechanism in

combating money laundering and aims at ensuring that obliged parties pay the necessary attention

and care for preventing money laundering and the financing of terrorism.

Issues related to preventive measures defined in the “Regulation on Measures Regarding

Prevention of Laundering Proceeds of Crime and Financing of Terrorism” and the “Regulation on

Compliance with Obligations of Anti-money Laundering and Combating the Financing of

Terrorism” are regulated in detail in MASAK General Communiques.

3

In this respect, ‘simplified measures’ required to be obeyed by obliged parties about CDD

principles are defined in MASAK General Communiques No.5 and 9; explanations for effective,

timely and proper ‘suspicious transaction reporting’ by obliged parties under the scope of

AML/CFT are defined in MASAK General Communique No.6; explanations regarding making

customer identification information of obliged parties’ customers with permanent business

relationship in line with the Regulation and other explanations regarding customer identification

are defined in MASAK General Communique No.7.

II. OVERALL INFORMATION ON MASAK

A. VisionandMission

MASAK’s vision and mission has been defined as follows.

Vision: The vision of MASAK is to become a leading institution that contributes to establishment

of an efficient economy and a safe society through effectively combating laundering proceeds of

crime and terrorist financing.

Mission: The mission of MASAK regarding prevention and detection of money laundering and

terrorist financing is to contribute to making policies and regulations, to collect and analyze

information quickly and reliably, to carry out examination and research and to convey the

information and results to relevant authorities.

B. Power, FunctionsandResponsibilities

After the Law No. 4208 on Prevention of Money Laundering entered into force on 19.11.1996,

Financial Crimes Investigation Board (MASAK) was established on 17.021997 and our country

became one of those fighting against money laundering.

Having started operating on 17 February 1997, MASAK is an administrative unit attached to the

Minister of Finance and its powers and functions were initially defined in the Law No. 4208.

Powers and functions of MASAK were redefined in Article 19 of the Law No. 5549 on

Prevention of Laundering Proceeds of Crime which entered into force on 18 October 2006 by

being published in the Official Gazette No. 26323. Accordingly, MASAK fulfills the following

essential services:

• To develop policies and implementation strategies, to coordinate institutions and

organizations, to conduct collective activities, to exchange views and information for the

prevention of laundering proceeds of crime.

• To prepare law, by-law and regulation drafts in accordance with the policies determined,

to make regulations for the implementation of Law 5549 and related decisions of Council of

Ministers.

• To carry out researches on the developments and trends on laundering proceeds of crime

and on detection and prevention methods.

4

• To make sector-specific studies, to develop measures and to monitor the implementation

for the prevention of laundering proceeds of crime.

• To carry out activities to raise public awareness and support.

• To collect data, to receive suspicious transaction reports, to analyze and evaluate them in

the scope of prevention of laundering proceeds of crime and terrorist financing.

• To request for examination from law enforcement and other relevant units in their fields,

when required during the evaluation period.

• To carry out or to have carried out examinations on the subject matters of Law 5549.

• To denounce files to the Chief Public Prosecutor’s Office for the necessary legal actions

according to the Criminal Procedure Law in the event of detecting serious findings as a result of

the examination that a money laundering offence has been committed.

• To examine the cases conveyed from Public Prosecutors and to fulfill the requests related

to the determination of money laundering offence.

• To convey the cases to the competent Public Prosecutor’s Office in cases where serious

suspicion exists that a money laundering or terrorist financing offence has been committed.

• To ensure supervision of obligations within the scope of Law 5549 and relevant

legislation.

• To request all kinds of information and documents from public institutions and

organizations, natural and legal persons, and unincorporated organizations.

• To request temporary personnel assignment from other public institutions and

organizations within the Presidency, when their knowledge and expertise is necessary.

• To carry out international affairs, to exchange views and information for the subjects in

the sphere of its duties.

• To exchange information and documents with counterparts in foreign countries, and for

this purpose, to sign memoranda of understanding which are not in the nature of an international

agreement.

C. AdministrativeStructure Information

1. Position in theMinistryandOrganizationalStructure

According to subparagraph (g) of Article 8 in Decree Law no. 178 on Organization and Duties of

Ministry of Finance, MASAK is a “main service unit” within the Ministry of Finance, and

according to Article 19 of Law no. 5549 shall work directly attached to Minister of Finance.

5

MASAK carries out its functions through deputies of the head and heads of departments attached

to the Head of MASAK and departments of Foreign Relations, Monitoring Legislation and

Coordination, Training, Data Collection, Data Entry, Supervision of Obligations, Analysis and

Evaluation related to Laundering Offence, Examination of Laundering Offence, Analysis and

Evaluation related to Financing of Terrorism, General Analysis Groups and branches of

Informatics, Human Resources and Administrative and Fiscal Affairs attached to them.

Figure 1- MASAK’s Position within the Ministry of Finance

6

Financial intelligence units are main organs of fight against laundering proceeds of crime and the

financing of terrorism which undertake significant functions in this fight.

In its Recommendation 26, FATF requests countries to establish a national and central authority

that receives and analyses STRs and sends them to relevant units.

Within this framework, as the Turkish Financial Intelligence Unit, MASAK undertakes

regulatory, supervisory and training functions as well as basic FIU functions. MASAK

organization chart is given below in Chart 2.

Figure 2– MASAK Organization Chart

7

2. Human Resources

Total number of personnel working at MASAK is 182. The following table gives information

on dispersion of personnel within the organization.

Table 1– Dispersion of Personnel (2003-2012)

2012 16 56 33 4 13 60 182

(*) The Head, Deputies of the Head, Head of Department, Director of Branch (1 Finance

Expert is Director of Branch).

(**) IT Director, Engineer, Analyst, Programmer, Computer Operator.

(***) Chief, Translator, Revenue Expert, Data Preparation and Control Operator, Civil

servants, Technician, Distributor, Servant.

Chart 1–Dispersion of the Personnel as per titles (2012)

16; 9%

56; 31%

33; 18% 4; 2% 13; 6%

60; 33%

Administrative Staff Finance Expert Finance Ass. Exp. Tax Inspector IT Staff Other Staff

Years Administrative

Staff

(*)

Finance

Expert

Finance

Assistant

Expert

Tax

Inspector

IT Staff

(**)

Other

Staff

(***)

Total

2003 6 24 27 3 8 45 113

2004 7 35 17 7 8 42 116

2005 7 41 9 7 11 51 126

2006 13 42 15 6 10 52 138

2007 13 40 22 3 12 56 146

2008 12 43 20 4 12 63 154

2009 13 44 21 3 12 68 161

2010 15 54 21 4 13 65 172

2011 15 54 28 4 11 62 174

8

Table 2– Numbers of Personnel As Per Titles (2012)

Title Number of Personnel

President 1

Vice President 2

Head of Department 8

Director of Branch 5

Finance Expert 56

Finance Assistant Expert 33

Tax Inspector 4

Revenue Expert 14

Revenue Assistant Expert 4

Translator 4

Engineer 3

Statistician 2

Analyst 1

Programmer 3

Computer Operator 2

Data Preparation and Control Operator 23

Chief 5

Technician 2

Driver 1

Distributor 4

Servants 6

182

Permanent Staff 137

Contract Staff 1

Interim Staff at MASAK 44

TOPLAM 182

Staff on Unpaid Leave 4

Temporarily Assigned in Another Unit 1

On Graduate Program Abroad 1

De facto Available : 176

9

Table 3–Personnel’s Age Profile (2012)

Age Number

20-29 27

30-39 80

40-49 56

50-59 19

Total 182

Chart 2–Dispersion of the Personnel As Per Their Ages (2012)

The following table gives information on Public Staff Foreign Language Knowledge

(KPDS) level of MASAK Personnel.

Table 4- Public Staff Foreign Language Knowledge (KPDS) level of MASAK Personnel*

KPDS A Level KPDS B Level KPDS C Level

6 23 43

(*)= 1 Translator-Interpreter knows English at A level and French at B level.

27; 15%

80; 44%

56; 31%

19; 10%

20-29 30-39 40-49 50-59

10

III. PURPOSE AND OBJECTIVE

A. PurposeandObjective

MASAK’s strategic objective is “to fight against laundering proceeds of crime and the

financing of terrorism effectively” under the scope of the strategic purpose of “Expanding the

Formal Economy and Lowering the Rate of Financial Crimes” defined in the revised 2013-

2017 Strategic Plan announced by the Ministry.

B. EssentialPriorities

MASAK will give priority to the following activities in 2013 in order to achieve the strategic purpose and objective:

to pursue receiving result-oriented STRs for analysis, evaluation and examination besides the target of enhancing the database through evaluating the results obtained from application of new “electronic suspicious transaction reporting system” which started in 2012

to complete as soon as possible the analysis and evaluation of referrals and STRs received relating to offences of laundering proceeds of crime and the financing of terrorism. To contribute to increase the efficiency in combating laundering proceeds of crime and the financing of terrorism by subjecting the issues mentioned and may pose risk in the referrals and STRs to sectoral analysis through benefiting from mass data. For this purpose, to complete the studies relating to receiving the information and document in the standard form suitable for analysis and secure medium required from natural and legal persons especially banks.

to organise trainings for raising awareness of obliged parties on obligations known as “preventive measures” in combating laundering proceeds of crime and the financing of terrorism and to ensure the implementation of these measures.

to perform supervision of compliance with obligations within obliged

parties for ensuring them to comply with the obligations established under the scope of combating laundering proceeds of crime and the financing of terrorism.

to carry out effective and proactive works with law enforcement units,

other relevant institutions and organizations which MASAK is in cooperation and coordination with that fit the purpose of effective and efficient development of combating laundering proceeds of crime and the financing of terrorism.

to concentrate on works for prevention laundering proceeds of crime

derived from predicate offences such as drug trafficking, cigarette trafficking, usury, fuel smuggling, human trafficking and cyber-crimes.

11

to organize activities for enhanced communication and cooperation with

examiners for the purpose of increasing effectiveness in money laundering examinations and supervision of obligations.

to sign Memoranda of Understanding with FIUs of other countries

allowing to exchange information for intelligence in order to ensure international cooperation.

to develop institutional capacity for the purpose of combating effectively

financing of terrorism in accordance with international standards.

to keep on works for establishing legal mechanisms for freezing terrorist assets in order to ensure Turkey’s compliance with the international standards on combatting financing of terrorism.

IV. INFORMATION AND ASSESSMENTS ON ACTIVITIES

A. Fiscal Information

The following table gives information on the General Budget and allocated allowances and

expenditures of MASAK within the last five years.

12

Table 5- Economic Classification of Budget Allowance Allocations and Expenditures (2008-2012)(TL)

Economic

Classificati

on

Type of Budget

Expenditures

2008 2009 2010 2011

2012

All

ow

an

ce

Ex

pen

dit

ure

All

ow

an

ce

Ex

pen

dit

ure

All

ow

an

ce

Ex

pen

dit

ure

All

ow

an

ce

Ex

pen

dit

ure

All

ow

an

ce

Ex

pen

dit

ure

01 Expenditures for

the Staff 3.480.428 3.480.427 4.001.300 3.857.398 4.415.800 4.403.254 5.464.000 5.337.029

7.006.000

6.788.782

02

State Premium

Payments to Social

Security

Institution

293.020 285.025 338.100 326.949 547.520 544.247 664.000 643.332

812.000

777.571

03 Goods and

Services Purchase 530.500 385.148 671.400 497.195 608.001 566.046 793.000 723.466

762.000

532.045

05 Current Transfers 51.500 51.379 66.500 64.399 78.000 73.723 113.500 107.598

117.000

114.736

05 Capital

Expenditures 0 0 0 0 1.500.000 1.464.333 3.500.000 3.280.400

14.000.000

12.896.580

Total 4.355.448 4.201.979 5.077.300 4.745.941 7.149.321 7.051.603 10.534.500 10.091.825

22.697.000

21.109.714

13

Chart 3– Percentages of Expenditures (2012)

The chart above demonstrates the dispersion of budget expenditures in respect of budget

economic codes as of 31.12.2012. The greatest item in the Chart is “the personnel

expenditures” which constitutes 32,16 % of the total expenditures. Percentages of other

expenditure items are 3,68% for state premium payments to social security institutions; 2,52%

for purchases of goods and services; 0,54% for current transfers; and 61.09% for capital

expenditures. Current transfers indicate the payments made to international institutions

(Financial Action Task Force and Egmont Group) by Turkey for membership annual dues.

B. Information on Performance

1. RegulationandCoordinationActivities

1.1. Coordination Board Meetings

The Coordination Board for Combating Financial Crimes were ordinarily held two times in

2012 under the chairmanship of Undersecretary of Ministry of Finance, consisting of

President of Financial Crimes Investigation Board, President of Revenue Administration,

President of Tax Inspection Board, Deputy Undersecretary of Ministry of Interior, General

Director of Laws of Ministry of Justice, General Director of Economic Affairs of Ministry of

Foreign Affairs, President of the Board of Treasury Comptrollers, President of Insurance

Supervision Board, General Director of Banking and Foreign Exchange of Undersecretariat of

Treasury, General Director of Insurance of Undersecretariat of Treasury, President of

Inspection Board of Undersecretariat of Customs, General Director of Customs of

61,09

32,16

3,68

2,52 0,54

Expenditures

Capital Expenditures

Personnel Expenditures

State Premium Payments toSocial Security Institutions

Expenditures of Goods andServices Purchase

Current Transfers

14

Undersecretariat of Customs, Vice President of Banking Regulation and Supervision Agency,

Vice President of Capital Markets Board and Vice President of Central Bank.

Activities of MASAK in 2011 and the works on fighting financing of terrorism were

discussed in line with the agenda for the first meeting of the Board held on 19.04.2012,

The works on fighting financing of terrorism were discussed in line with the agenda for the

second meeting of the Board held on 26.09.2012.

1.2. OtherActivities

Within the scope of the studies carried out for the responding of opinion requests from

obliged parties and other institutions and establishments regarding Law No.5549 and

secondary legislations, 28 opinion requests were responded by MASAK in 2012.

Additionally, 84 information acquisition request and 18 parliamentary requests were

responded in 2012 for fulfilment of information acquisition request submitted to MASAK

within the scope of Law No: 4982 on Right of Information Acquirement and studies related to

responding of parliamentary requests concerning MASAK posed as part of studies of Grand

National Assembly of Turkey.

2. StudiesforDetectionandPrevention of LaunderingandFinancing of Terrorism

The obliged parties, within the scope of Law No.5549 and secondary legislation related to this

Law, report the transactions carried out by themselves or mediated by them in case of a

suspicion of terrorist financing or laundering of assets derived from crime to MASAK as

Suspicion Transaction Report (STR).

Public Prosecutor’s Office and the Courts may demand legal request from MASAK for

identifying whether the offence of laundering of assets derived from crime is committed or

not.

Public institutions and organizations, natural and legal persons may also refer the cases to

MASAK.

15

While Finance Experts are carrying out analyzing and evaluation studies related to STR, legal

request and referrals concerning financing of terrorism or laundering of assets derived from

crime; the examiners also carry out investigations regarding laundering offence.

2.1. Data Collection Activities

Most of data collection activities of MASAK are to convert reports into electronic data and to

integrate them into MASAK IT System after confirmation process. Due to data collection

activities, information in the reports conveyed to MASAK can be converted into clear and

distinct data and therefore it allows us to carry out systematic, analytic and statistical analysis

on the reports. We have realized exchange of information with our counterpart units in foreign

countries within the scope of data collection activities. The reports sent to MASAK might be

classified as follows:

a) Suspicious transaction reports sent from obliged parties,

b) Evaluation or investigation requests carried out by Public Prosecutor’s Office and the

Courts,

c) Informative articles and research reports sent from other public institutions,

d) Referrals and complaints made by natural or legal persons,

e) Referrals and complaints made by natural and legal persons abroad,

f) Adopted as direct referral from the news in the national and international press as of

their contents.

Table 6- The General Dispersion of the Reports Sent in 2012

Reporting Types 2012

Suspicious Transaction Reports 15.318

Requests of Public Prosecutor’s Office and Courts 89

Other Reports 430

Total 15.837

2.1.1. Suspicious Transaction Reports

Suspicious transaction reports; they are the reports sent to MASAK in compliance with the

standard procedures determined by MASAK where there is any suspicion that the asset, which

is subject to the transactions carried out within or through the natural and legal persons stated

as “obliged parties” within the scope of the Regulation on Measures Regarding Laundering

Proceeds of Crime and Financing of Terrorism and in accordance of article 4 of Law No.5549,

is acquired through illegal ways or used for illegal purposes.

16

Table 7- The Numbers of STRs and the dispersion of them in respect of their sources

(2006-2012)

Sources of STRs 2006 2007 2008 2009 2010 (*) 2011 2012

Banks 1133 2903 4889 9480 9968 8141 13.504

Brokers 7 40 9 168 28 117 237

Financing, Factoring,

Financial Leasing and

Investment Companies

- - 15 32 70

164

520

Insurance and Pension

Companies - 3 10 129 148

286

569

Notaries - - 1 6 1 4 1

The General Directorate

of Post and Telegraph

Organization

- - - 6 25

11

297

Foreign Exchange

Offices - - -

2

11

14

123

Cargo Companies - - - - - - 61

Public Accountants and

Certified Public

Accountants

- - - - -

1

-

General Directorate of

National Lottery - - - - -

1

5

Including construction

machines, all kinds of

ship, aircraft and vehicle

dealers,

- - - - -

-

1

Total

1.140

2.946

4.924

9.823

10.251

8.739

15.318

17

The number of STRs received in 2012 is the highest compared with previous ones MASAK

has received so far.

Taking into consideration the change of the STR numbers in sectors as per years, it is seen

that increasing trend in the number of STR received from financial sector and promotion of

awareness in fighting money laundering and financing of terrorism in financial sector

continued in 2012 as well.

Chart 4- Numeric Trend of Suspicious Transactions Reports as per years (2006-2012)

13.759 out of 15.318 STRs received in 2012 were submitted electronically. Electronic

reporting application is used in banking sector initially and %99,7 of 13,801 STRs were

submitted by banking sector electronically in 2012. That electronic reporting is a secure, rapid

and easy way contributes to the increase in the number of STRs in banking sector.

1.140

2.946

4.924

9.823 10.251 8.739

15.318

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

2006 2007 2008 2009 2010 2011 2012

18

Table 8- Dispersion of Number of Financial Institutions Sending STRs in Financial

Sector as per years (2006-2012)

Financial Institution 2006 2007 2008 2009 2010 2011

2012

Banks 31 28 28 31 26 29

30

Insurance and Pension

Companies - 1 5 24 18 27

36

Factoring Companies - - 2 6 14 26

28

Brokers 1 2 5 15 10 17

23

Financial Leasing

Companies - - - 4 4 14

15

Financing Companies - - 1 2 2 5 4

Foreign Exchange

Offices - - - 2 1 2

2

Total 32 31 41 84 75 120

138

Chart 5- Numerical Trend of Financial Institutions Sending STRs as per years (2006-

2012)

32 31 41

84 75

120

138

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012

Number of Financial Institution Sending STR

19

Considering the numerical trend of financial institutions sending STRs as per years, it is seen

that development for institutional awareness in financial sector with regard to cooperation in

fighting against laundering proceeds of crime and financing of terrorism continued in 2012 as

well. In this scope, the number of financial institutions sending STRs increased to 138

compared with 120 in 2011. Similarly, the number of financial institutions other than banks

increased to 108 from 91. It is observed that the increase is in the sectors who are focused and

for whom training and workshops are organized by MASAK or who are informed of

suspicious transaction trends.

For obliged parties reporting suspicious transactions to MASAK, total 114 suspicious

transaction types classified in terms of the nature of the suspicion in the General Communiqué

No. 6 are determined. In case STRs or situations encountered by obliged parties match with

one or more types stated in the General Communique 6, the types are determined in STR

forms.

More than one STR types can be chosen in the framework of reporting process. 25.503 STR

types were chosen in 15.318 STRs sent in 2012.

The dispersion of suspicious transaction types in respect of the nature of the suspicion is as

follows:

Table 9- Suspicious Transaction Types as to the Nature of Suspicion (2012)

Suspicious Transaction Types Number of Types

Carrying Out Transactions Not Having Reasonable Grounds 7.271

Carrying Out Transactions Incompatible With Financial Profile 5.667

Suspicious Cash Transactions 3.086

Inconsistency In Declarations And Documents Of The Customer 2.094

Suspicious Electronic Transfers Into or Out Of Country 1.663

Concrete Findings on Illegal Activities 1.486

Suspicious Credit Transactions 1.484

Establishing Financial Relations With Risky Persons 842

Transactions Related To Risky Countries 753

Carrying out Transactions with third persons who are not clearly

relevant 538

Suspicion Related To Financing of Terrorism 332

Concealing That The Transaction Is Carried out for the Benefit of

Someone Else 160

Structuring of High Amount Transactions 113

Suspicious Safe-Deposit Box Transactions 14

Total 25.503

20

Chart 6-Suspicious Transaction Types as to the Nature of Suspicion (2012)

As it is seen in the Table 9, suspicious cases below are usually determined in the STRs sent in

2012:

a) customers conducting transactions disproportionate to their financial profile

b) transactions not having any legal or economic ground or reasonable explanation

c) carrying out suspicious cash transactions

d) false or inconsistent points in the declarations, actions or submitted documents of the

customer

2.1.2. Requests for evaluations and examinations made by Public Prosecutor’s

Offices and Courts

Public Prosecutor’s Offices and Courts send their requests to MASAK in order to make

financial researches on detection of laundering proceeds of crime and financing of terrorism.

With regard to the requests, MASAK carries out analysis, evaluation and investigation

activities.

Table 10- Requests for evaluations and examinations made by Public Prosecutor’s

Offices and Courts

22,2%

28,5%

12,1%

8,2%

6,5%

3,0%

5,8%

3,3%

5,8%

2,1%

1,3%

0,4%

0,6%

0,1%

Carrying out transactions incompatible with…

Carrying out transactions not having reasonable…

Suspicious Cash Transactions

Inconsistency in declarations and documents of the…

Suspicious electronic transfers into or out of country

Transactions related to risky countries

Concrete findings on illegal activities

Establishing financial relations with risky persons

Suspicious credit transactions

Carrying out transactions with people who are not…

Suspicion related to financing of terrorism

Structuring of high amount transactions

Concealing that the transaction is carried out for the…

Suspicious safe-deposit box transactions

Years 2006 2007 2008 2009 2010 2011

2012

Requests for evaluations and

examinations made by

Public Prosecutor’s Offices

and Courts

93 84 74 69 107 71

89

21

Chart 7- The Numerical Trend of Requests for Evaluations and Examinations made by

Public Prosecutor’s Offices and Courts(2006-2012)

2.1.3. Other Reports as of years (2006-2012)

Public institutions and organizations send the issues which they consider to fall under the

duties of MASAK through a report drawn up by their own institution or through official

communication to MASAK

Denunciations made to MASAK by natural persons and legal persons within the scope of

private laws, and certain press articles are also considered as reports when they are related

with the duties of MASAK, and are integrated into our system; and financial research is

conducted in relation to those reports. Denunciations not related with MASAK are sent to

relevant public institutions.

Table 11– Number and Sources of Other Reports (2006-2012)

Other Reports 2006 2007 2008 2009 2010 2011 2012

Public Institutions 117 120 115 100 91 87 148

Banks 38 8 - - 1 - 1

Press 4 5 3 2 2 - 9

Natural Person / Legal

Persons within the scope

of private laws

304 284 359 350 331 270 265

Abroad 7 5 3 6 8 12 7

Total 470 422 480 458 433 369 430

93 84

74 69

107

71

89

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012

22

Chart 8– Sources of Other Reports (2012)

Referrals and complaints were mostly received from natural persons residing in Turkey. 73%

of those referrals and complaints were put into process to be evaluated within the scope of

anti-money laundering and terrorist financing; 26% of them were sent to relevant institutions

due to not being directly related to MASAK and as for the remaining 1%, petitioners were

requested to provide extra information as there were not concrete findings in those

referrals/complaints.

The subjects of the judicial requests and other referrals/complaints sent to MASAK have been

dispersed as follows:

148

1 9

265

7 Public Institutions

Banks

Press

Natural Person / Legal Personswithin the scope of private laws

Abroad

23

Table 12– Number of the Referrals and their Alleged Subjects (2012)

Denunciations and Their Subjects in 2012

Tax Evasion 118

Usury 84

Fraud 62

Corruption 44

Laundering Proceeds of Crime 34

Suspicious Money Movements 29

Smuggling 22

Proceeds Whose Sources are Unknown 19

Bid Rigging 15

Cash or Similar Instruments seized at Borders 15

Terrorism or Financing of Terrorism 14

Establishing Criminal Organization 13

Drug Trafficking 13

Theft 7

Providing Gambling Services 5

Violation of Social Security Legislation 4

Other 21

Total 519

Chart 9– Number and Subjects of Referrals (2012)

When the subjects referred to MASAK in 2012 are examined, it is seen that most of them are

about tax evasion, usury and fraud, as in 2011.

0

20

40

60

80

100

120

140

24

In addition to them; corruption, laundering proceeds of crime and suspicious money transfers

are the other major subjects referred to MASAK.

2.1.4. Information Requests

As a financial intelligence unit (FIU), MASAK exchanges intelligential information and

documents with foreign counterpart institutions within the scope of anti-money laundering

and combating terrorist financing. MASAK, given duty and power on the mentioned issue

under Article 19 (1)(m) titled “Duties and Powers of the Presidency” of Law No. 5549,

mostly exchanges information with financial intelligence units of Egmont Group members.

Egmont Group was established in Brussels on 09.06.1995 by the participation of 24 countries

and 8 international organizations. As of 31.12.2012, financial intelligence units of 131

countries are members of the Egmont Group. This membership allows countries to exchange

information through a secure communication network (Egmont Secure Web – ESW). The

main objective of the Egmont Group is to assist countries to improve their AML/CFT systems

(anti- money laundering and combating terrorist financing systems), and to remove the

obstacles hindering the international exchange of information. MASAK became a member of

Egmont Group on 29.06.1998.

MASAK’s international exchange of information is mostly conducted with financial

intelligence units that use this secure communication network. MASAK also exchanges

information with foreign counterpart institutions not using Egmont Secure Web through mail

or telefax.

In 2012, MASAK received 221 information requests from counterpart institutions in relation

to money laundering and terrorist financing offences. These requests are generally about

unusual or suspicious financial transactions conducted in the country of the relevant financial

intelligence unit and involving money transfers made by Turkish citizens or made to Turkey

or to their country from Turkey.

Table 13– Exchange of Information with Foreign Counterparts (2006-2012)

Year Requests Received Requests Sent

2006 136 132

2007 196 59

2008 143 46

2009 169 162

2010 188 63

2011 202 38

2012 221 60

25

The following chart displays foreign counterparts making the most requests to MASAK in

2012. Information requests received are mostly from the FIUs of Belgium, Germany, Russia,

France and the Netherlands.

Chart 10- Foreign Counterparts making the highest number of requests (2012)

In 2012, MASAK sent 60 information requests to 35 foreign FIUs. 25% of those requests

have been made to FIUs of the Netherlands, Germany and the UK.

2.2. Analysis, Evaluation andExamination

MASAK carries out analysis and evaluation works for prevention and detection of financing

of terrorism and laundering proceeds of crime. It also carries out examinations for detecting

laundering proceeds of crime.

Analysis: It is the work carried out for obtaining qualified financial intelligence from various

data collected, and referrals and reports received within the scope of Law No.5549 by using

statistical and analytic methods and processing them with the help of technical instruments.

Evaluation; It is the work carried out for detecting serious suspicions and indications about

the assets and persons in relation to laundering offence based on cases which fall under the

duties of MASAK or the analyses performed.

Examination; It is the work carried out for detecting the facts indicating that the laundering

offence has been committed.

In accordance with Article 19 of Law No. 5549, MASAK carries out analysis and evaluations

on money laundering and terrorist financing through Finance Expertsemployed at MASAK

and money laundering examinations through Tax Inspectors, Customs and Trade Inspectors,

Sworn-in bank Auditors, Treasury Comptrollers, Insurance Supervision Experts and

30,80%

19,20%

10,90% 9,60%

8,30% 7,70%

3,80% 3,20% 3,20% 3,20%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

26

Actuaries, Banking Regulation and Supervision Agency Experts and Capital Markets Board

Experts.

The analyses, evaluations and examinations carried out by MASAK can be initiated based on

various sources; and requests submitted by Public Prosecutor’s Office, denunciations received

from public institutions or organizations and the natural or legal persons at home or abroad,

and the suspicious transaction reports conveyed by obliged parties designated to report

suspicious transactions according to Law No.5549 are among the prominent ones.

2.2.1. Analysis and Evaluation

The Financial Intelligence Units are the most important organizational structures in combating

laundering proceeds of crime and financing of terrorism. The Egmont Group defines FIU as

follows;

“A Financial Intelligence Unit (FIU) is a central, national agency responsible for receiving

analyzing and disseminating to the competent authorities, disclosures of financial information

which are related to suspected proceeds of crime and potential financing of terrorism, or

required by national legislation, in order to counter money laundering and financing of

terrorism”.

Today, in every country that combats laundering proceeds of crime and financing of terrorism,

there are financial intelligence units that receive and analyze financial information and

disseminate it to the relevant units within the framework of the function of FIU even though

they may have different administrative structures, locations and powers.

MASAK, as the financial intelligence unit of Turkey, gives information to the relevant

institutions and organizations about the issues that are deemed necessary after the analyses it

carries out.

2.2.1.1. Analysis and Evaluation regarding Laundering Offence

Out of the referrals and suspicious transaction reports conveyed to MASAK, evaluation files

are opened for the ones that are considered to be qualified in respect of laundering offence

after the analysis.

Table 14– Analysis and Evaluation Files Concluded (2003-2012)

Year Number of Files Number of Concluded Files

2003 279 142

2004 407 221

2005 369 283

2006 692 275

2007 590 353

2008 400 324

2009 211 152

2010 159 93

2011 127 100

2012 98 38

27

Chart 11– Conclusion Rate of Analysis and Evaluation Files (2003 – 2012)

Number of Files Concluded/ Handled

As a result of the analysis and evaluation works carried out, it has been found out that many

cases which, at first glance, were thought to be unrelated with each other were in fact the

different components of the same attempt; and this situation impeded the analysis as all those

related cases were handled in different files. In this context, the cases which were detected to

be related with activities of money laundering and terrorist financing were merged under a

single file.

Considering the analysis and evaluation files on money laundering concluded between years

2008 and 2012, it is seen that various predicate offences have been committed but certain

offences such as drug trafficking, fraud and usury are more common.

0,51 0,54

0,77

0,40

0,60

0,81

0,72

0,58

0,79

0,39

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

28

Table 15– Subjects of the Analysis and Evaluation Files (2008 -2012)

YEAR SUBJECT OF THE PREDICATE

OFFENCE

NUMBER OF

FILES TOTAL

2008

Drug trafficking 61

324

Fraud 35

Customs smuggling 21

CMB Offences 11

Organized crime 10

Illegal gambling 10

Forgery of documents 6

Smuggling of precious metals 4

Embezzlement 4

Unjust enrichment 3

Fuel smuggling 2

Trading of organs and tissues 2

Receiving Bribe 2

Usury 2

Cigarette smuggling 1

Encouraging, aiding and mediating

prostitution 1

Bid rigging 1

Illegal financial transactions 141

Other 7

2009

Drug trafficking 25

152

Fraud 13

Organized Crime 10

Customs smuggling 9

Unjust enrichment 9

Fuel smuggling 6

Bid rigging 6

Usury 5

Bribe 5

Forgery of Documents 4

Encouraging, aiding and mediating

prostitution 4

Embezzlement 4

Migrant smuggling 1

CMB offences 1

Illegal gambling 1


Other 1

2010

Drug trafficking 19

93

Fraud 13

Customs smuggling 9

Usury 8

Organized Crime 6


29

Bid rigging 4

Bribe 4

Migrant/human smuggling 3

Unjust enrichment 3

Embezzlement 2

Smuggling of Precious Metals 1

CMB offences 1

Illegal gambling 1


Other 6

2011

Usury 24

100

Drug trafficking 15

Fraud 11

Fuel smuggling 5

Embezzlement 4

Customs smuggling 4

Organized Crime 3

Migrant/human smuggling 3

Unjust enrichment 2

Bid rigging 2

Commercial counterfeiting 2

Bribe 2


Cigarette Smuggling 2

CMB offences 1


Other 5

2012

Usury 8

38

Drug trafficking 6

Fraud 5

Organized crime 3

Fuel smuggling 1

Illegal gambling 3

Embezzlement 2

Customs smuggling 1

Bid rigging 1

Theft 1

Malpractice 1



When, as a result of the evaluation carried out by Finance Experts, there is serious suspicion

that laundering offence has been committed the case is denounced to the authorized Public

Prosecutor’s Office. The cases in which some indicators have been detected about money

laundering and which require different areas of expertize are subject to examination by the

examiners listed in Article 2 of the Law No.5549. In this scope, 18% of the evaluations

concluded in 2012 were conveyed to examination.

30

2.2.1.1.1. Institutions Informed after Analysis and Evaluation

In the event that subjects within the duty fields of different institutions are encountered in

analyses and evaluations related to laundering offence, those institutions are also informed. In

this scope; as a result of the analyses and evaluations conducted in 2012 related to laundering

offence, various institutions were informed about 1641 persons for intelligence purposes

Table 16- Institutions provided with intelligence after analyses and evaluations (2012)

Institution Number of Persons

Judicial Authorities 583

Law Enforcement 448

Tax Inspection Board 420

National Intelligence Organization 42

Ministry of Customs and Trade 36

Other Ministries 19

Revenue Administration 16

Social Security Institution 2

Undersecretariat of Treasury 2

Capital Market Board 2

Other 71

Total 1.641

Chart 12- Institutions provided with intelligence after analyses and evaluations (2012)

583

448 420

42 36 19 16 2 2 2 71

Institutions Provided with Intelligence

31

2.2.1.1.2. Subjects of Predicate Offences Revealed After Analysis and

Evaluation

Subjects of the information provided to other institutions in 2012 after the analyses on

laundering offence are as follows:

Table 17- Subjects of Intelligence Provided After Analysis and Evaluation

Subject of the Predicate Offence Number of Persons

Fraud 273

Fuel Smuggling 238

Tax Evasion 210

Usury 129


Drug trafficking 96

Organized crime 70

Customs smuggling 68

Malpractice 54

Corruption 50

Unlawful profits 35

Bid rigging 29

Forgery 15

Embezzlement 13

Bribery 10

Violation of Law on The Protection Of The Value Of Turkish

Currency 10

Trade of pornography 4

Illegal gambling 3

Other 123

Total 1.641

32

Chart 13- Subjects of intelligence provided after the analysis and evaluations (2012)

2.2.1.2. Analysis and Evaluations related to Terrorist Financing Offence

Out of referrals and suspisicious transaction reports sent to MASAK, the ones that have been

analyzed and found out to be qualified in terms of terrorist financing offence are subject to

evaluation. Statistics on the files opened and completed between 2008-2012 within the scope

of financing of terrorism is shown in the table below.

Table 18– Analysis and evaluation files concluded by years (2008 – 2012)*

Year Number of files Number of concluded files

2008 40 12

2009 59 37

2010 70 30

2011 77 36

2012 69 17

* Group of Analysis and Evaluation of Financing Terrorism was founded and started its activities on 08.11.2007,

pursuant to Law No. 5549 which entered into force on 18.10.2006. 1The 40 Recommendations on anti-money laundering published by FATF in 1990 were revised and

republished in 1996 and 2003. Besides, FATF published 8 Special Recommendations on terrorist

financing in 2001 and published the Special Recommendation 9 in 2004. Thus, the total number FATF

Recommendations on anti-money laundering and terrorist financing reached 49. Later on, the 9 Special

Recommendations were incorporated into the other recommendations as adopted in the FATF Plenary

of February 2012 and the recommendations were published again as 40 Recommendations.

2According to the FATF procedures, countries which do not adequately comply with

16,64%

14,50%

12,80% 7,86%

12,86%

5,85%

4,27%

4,14%

3,29% 3,05%

2,13%

1,77%

0,91%

0,79%

0,61% 0,61% 0,24%

0,18%

Subjects of the Intelligence Provided Fraud 16.64%

Fuel Smuggling 14.5%

Tax Evasion 12.8%

Usury 7.86%

Illegal financial transactions12.86%

Drug trafficking 5.85%

Organized crime 4.27%

Customs Smuggling 4.14%

33

Chart 14- Conclusion ratio of the analysis and evaluation files (2008-2012)

Table 19– Number of Persons Denounced (2009-2012)

Year

Being a member

of a terrorist

organization

Terrorist

Financing

Supporting a

terrorist

organization

Total

2009 2 2 4

2010 223 119 12 354

2011 - 7 7 14

2012 19 20 - 39

Total 244 148 19 411

0,30

0,63

0,43 0,47

0,25

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

2008 2009 2010 2011 2012

Number of Files Concluded/Evaluated

34

Chart 15- Percentage Distribution of the Persons Denounced (2009-2012)

2.2.1.2.1. Institutions Informed after the Analysis and Evaluations

As a result of analyses and evaluations carried out within MASAK into terrorist financing

offence, we shared information on 22370 natural/legal persons with various institutions in

2012.

Table 20- Institutions provided with intelligence after the analyses and evaluations

(2012)

NAME OF THE INSTITUTION NUMBER OF PERSONS

Turkish National Police 20.471

Social Security Institution 1.243

National Intelligence Organization 289

The Turkish Gendarmerie 175

Public Prosecutor’s Offices/Courts 173

Ministry of Foreign Affairs 19

TOTAL 22.370

0

0,1

0,2

0,3

0,4

0,5

0,6

Being a member of aterrorist organization

Terrorist financing Supporting a terroristorganization

0,59

0,36

0,05

35

Chart 16- Institutions provided with intelligence after the analyses and evaluations

(2012)

2.2.1.3. General Analysis

2.2.1.3.1. Strategic Analysis and Evaluation

With regard to the risk that some natural or legal persons may be out of the scope of

supervision for money laundering and terrorist financing offences,risk based analyses have

been conducted by taking domestic and foreign money transfers into account. According to

the analyses conducted, Turkish National Police was provided with information so that

necessary work and research into 85 persons and 17 companies could be conducted.

2.2.2. Examinations into Laundering Offence

Taking the expertice the work requires into account, the files which are considered to need

further examination as a result of the evaluations carried out within the scope of laundering

offence stated in Article 282 of the Turkish Penal Code No.5237 and the files which are

decided by MASAK to be sent directly for examination due to their nature are conveyed to

the examiners stated in Article 2 of the Law No.5549.

The files subject to examination process are shown below by years.

0

5000

10000

15000

20000

2500020471

1243 289 175 173 19

36

Table 21- Examination Files Concluded related to Laundering Offence (2008 – 2012)

Year Number of Files under

Examination Number of Concluded Files

2008 319 201

2009 181 76

2010 148 73

2011 124 58

2012 102 31

Chart 17- Examination Files Concluded related to Laundering Offence (2008 – 2012)

MASAK makes denunciations as a result of both money laundering examinations conducted

through examiners, and analyses and evaluations. Those referrals/denunciations are shown

together below:

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012

319

181

148

124 102

201

76 73

58

31

Number of Files under Examination Number of Concluded Files

37

Table 22- Number of Persons Denounced based on the Analysis and Evaluation

Files/Examination Files related to Laundering Offence (2008-2012)

Year Analysis and

Evaluation

Examination of

Laundering Offence

Total Number of

Denunciations

2008 3 228 231

2009 - 115 115

2010 30 356 386

2011 117*

105 177

2012 133 142 275

Total 283 946 1.229

(*) corrected after the shift in the denunciation year of the evaluation file

Chart 18- Number of Persons Denounced based on Files on Analysis and

Evaluation/Examination of Laundering Offence (2008-2012)

0

50

100

150

200

250

300

350

400

2008 2009 2010 2011 2012

3 0

30

117 133

228

115

356

105

142

Analysis and Evaluation Examination of Laundering Offence

38

Table 23– Number of Persons Denounced as to Predicate Offences (2008-2012)

Predicate Offence 2008 2009 2010 2011 2012 Total

Drug Trafficking 97 53 26 34 1 211

Customs Smuggling 14 - 69 - - 83

Fraud 29 10 56 77* 140 312

Providing Illegal

Betting and

Gambling Services

- - 165 5 37 207

Forgery of Official

and Private

Documents

18 34 15 8 4 79

Fuel Smuggling 25 - 30 8 26 89

Embezzlement 5 1 10 30 - 46

Usury - 3 4 31 41 79

Cigarette Smuggling 24 - - 3 9 36

Other 19 14 11 26 17 87

Grand Total 231 115 386 222 275 1.229

* corrected after the shift in the denunciation year of the evaluation file

Chart 19- Number of Persons Denounced as to Predicate Offences (2008-2012)

Between 2008 and 2012, 1229 persons were denounced on grounds of laundering offence and

the predicate offences of those denouncements comprised 312 fraud offences, 211 drug

trafficking offences, 207 offences of providing illegal betting and gambling services and 89

fuel smuggling offences.

0

50

100

150

200

250

300

350

211

83

312

207

79 89

46 79

36

87

39

3. Supervision of Obligations

3.1 Supervisions of CompliancewithObligations

Pursuant to the Law no 5549 on Preventing the Laundering of Proceeds of Crime and related

legislation, activities of supervision of obligations are carried out separately or based on

ansupervision program.

In 2012, programmed supervision of compliance with obligations were conducted in terms of

customer identification, suspicious transaction reporting and assigning compliance officers

(limited to obliged parties liable to assign compliance officers). Within the scope of the

program, supervision of 89 obliged parties started and supervision of 41 obliged parties was

completed in 2012.

The supervision of 11 obliged parties, comprised of 4 factoring companies and 7 financial

leasing companies, that had started in previous years was also completed in 2012.

Within the scope of separately conducted supervision of compliance with obligations, an

obliged party operating in the field of lottery and betting business was also supervised in

2012.

Supervision of obligations are conducted by MASAK in a programmed manner since 2009

and the table on supervision of obligations conducted between 2009 and 2012 is given below:

Table 24– Supervision of Compliance with Obligations (2009-2012)

Obliged party Years

2009 2010 2011 2012

Banks 36 - - 2

Capital Market Brokerage Houses 21 23 43 11

Insurance and Pension Companies 53 - - -

Factoring Companies - 16 20 8

Financial Leasing Companies - 3 18 10

Financing Companies - 10 - 1

Portfolio Management Companies - 7 5 4

Asset Management Companies - - 6 2

Money Lenders - 10 10 1

Precious Metals Market Intermediaries - - 11 8

Istanbul Gold Exchange - - 1 -

Operators of Lottery and Bet Games - - 6 1

Authorized Institutions - - - 3

Real Estate agents - - - 2

Total 110 69 120 53

40

3.2. Examinations of Violations of ObligationsandAdministrativeFinesImposed

Examination of violation of obligation is an individual supervision carried out by the

examiners listed in the Law No. 5549 in relation to violations of obligations detected during

the supervision of compliance, or reported to or detected by MASAK.

In the event that an act contrary to obligations is detected during the examinations, an

administrative fine pursuant to Article 13 of the Law No. 5549 and Misdemeanour Law or a

judicial penalty pursuant to Article 14 of the Law is applied depending on the type of the

obligation.

Administrative fines are applied to obliged parties violating any of the obligations of customer

identification, periodical reporting and suspicious transaction reporting stated in the Articles 3

and 6 of the Law and in addition to that, in cases of violation of the obligations of customer

identification and suspicious transaction reporting, an administrative fine is also applied to

officials not abiding by the obligations.

When the obligations listed in the Article 5 of the Law no. 5549 are not complied with,

MASAK gives obliged parties at least 30 days so that they can remove the deficiencies and

take necessary measures. An administrative fine is applied, based on the mentioned Article, to

obliged parties not removing the deficiencies or not taking the necessary measures in the

given time.

Tables and charts given below display the dispersion of administrative fines imposed between

2008 and 2012 in terms of number of obliged parties, violating acts and amounts of

administrative fines.

Table 25– Obliged Parties subject to Administrative Fine (2008-2012)

Years 2008 2009 2010 2011 2012

Number of Obliged Parties 57 15 12 15 21

Chart 20- Obliged Parties subject to Administrative Fines (2008-2012)

57

15 12

15

21

0

10

20

30

40

50

60

2008 2009 2010 2011 2012

41

Table 26– Acts subject to Administrative Fines (2008 – 2012)

Years 2008 2009 2010 2011 2012

Customer

Identification 355 17 127 66 1275

Suspicious

Transaction

Reporting

13 10 5 23 1

Total number of acts 368 27 132 89 1276

Chart 21- Acts subject to Administrative Fines (2008 – 2012)

Table 27– Amount of Administrative Fines (2008-2012)

Years 2008 2009 2010 2011 2012

Amount of

Fine (TRY) 2.337.210 341.004 1.452.441 1.292.284 14.369.887

0

200

400

600

800

1000

1200

1400

2008 2009 2010 2011 2012

355

17 127 66

1275

13

10 5 23

1

Customer Identification Suspicious Transaction Reporting

42

Chart 22- Amount of Administrative Fines (2008-2012)

3.3. JudicialPenalties

Judicial penalties are imposed, under Article 14 of the Law No. 5549, on persons who violate

any of the obligations stated in the Articles 7, 8 and 4(2) of Law No. 5549 with regard to

providing information and documents; retaining and submitting; and not giving information to

anybody including the parties of the transaction that they report the suspicious transactions to

MASAK, other than the examiners assigned to conduct supervision of obligations and the

courts during legal proceedings.

The obligations of customer identification and suspicious transaction reporting which are

regulated within the scope preventive measures for anti-money laundering and terrorist

financing underpin both preventive measures and supervision of obligations. Therefore, these

issues are prioritized in the supervision of obligations and the act contradicting the obligations

are punished with administrative fines. On the other hand, the acts punishable with judicial

penalties are not the kind of acts that can often be encountered in the supervisions. For this

reason, the number of persons punished with a judicial penalty is low compared to ones

punished with administrative fines.

In this scope, two persons were denounced to Public Prosecutor’s Office by MASAK in 2012

due to violating the obligation of providing information and documents.

The table below shows the number of cases and persons denounced to Public Prosecutor’s

Office by MASAK between 2008 and 2012.

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

14.000.000

16.000.000

2008 2009 2010 2011 2012

2.337.210

341.004 1.452.441 1.292.284

14.369.887

2008 2009 2010 2011 2012

43

Table 28– Number of Cases and Persons Referred to Public Prosecutor’s Office (2008-

2012)

Years 2008 2009 2010 2011 2012

Number of

Cases 5 - - 2 1

Number of

people 9 - - 2 2

4. ActivitiesRelatedtoForeignRelations

4.1. FATF -Turkey III. RoundMutual Evaluation Process

FATF, which was founded in 1989 for the purpose of anti-money laundering and which later

included combating financing of terrorism and weapons of mass destruction operates in

OECD headquarters, and has 36 members composed of 34 countries including Turkey and 2

regional organizations. FATF evaluates its members within the frame of its Recommendations

and the Methodology written based on those Recommendations1.

Up to now, Turkey has been evaluated three times by the FATF, which were in years 1994,

1998 and 2006. Third Round Evaluation Report of Turkey was discussed and adopted in the

FATF Plenary held in Strasbourg on 21-23 February 2007.

Since the evaluation date, Turkey, which was rated non-compliant for 11, partially compliant

for 22, largely compliant for 12, compliant for 3 and not-applicable for 1 Recommendation

out of FATF’s then current 40+9 Recommendations in the III. Round Evaluation Report has

made significant progress in terms of legislation and implementation related to remediation of

the issues which were criticized and considered as deficiency in the report.

The progresses made relating to the matters criticized in FATF Turkey Evaluation Report are

evaluated by follow-up reports submitted to FATF. According to this, it was decided at FATF

Plenary Meeting held in February 2007 that, within the scope of regular follow-up2, the First

1The 40 Recommendations on anti-money laundering published by FATF in 1990 were revised and

republished in 1996 and 2003. Besides, FATF published 8 Special Recommendations on terrorist

financing in 2001 and published the Special Recommendation 9 in 2004. Thus, the total number FATF

Recommendations on anti-money laundering and terrorist financing reached 49. Later on, the 9 Special

Recommendations were incorporated into the other recommendations as adopted in the FATF Plenary

of February 2012 and the recommendations were published again as 40 Recommendations.

2According to the FATF procedures, countries which do not adequately comply with

Recommendations 1,5,10 and 13, and Special Recommendations II and IV which are considered as

core recommendations by FATF, and countries which do not significantly comply with other

recommendations in spite of complying with the core ones are subject to monitoring which is called

“regular follow-up”. In follow-up process, the relevant country submits, at the end of the second year

44

Follow-Up Report of Turkey in which Turkey’s progress over the deficiencies stated in the

Report would be discussed at FATF Plenary Meeting to be held in February 2009. In the

ongoing process, Turkey’s succeeding Follow-up Reports were discussed at the following

FATF Plenaries: Second Follow up Report in February 2010, the Third Follow-up Report at

the FATF Plenary in June 2011, the Fourth Follow-up Report at the FATF Plenary in

February 2011, the Fifth Follow-up Report at the FATF Plenary in June 2011, Sixth Follow-

up Report at FATF Plenary in October 2011, Seventh Follow-up Report at FATF Plenary in

February 2012, Eighth Follow-up Report at FATF Plenary in June 2011, and Ninth Follow-up

Report in October 2012.

In the FATF Plenary in June 2011 where the Fifth Follow-Up Report of Turkey was

discussed, it was decided that Turkey would be subject to enhanced follow-up as the Draft

Law on Prevention of The Financing of Terrorism was not enacted yet as committed in Action

Plan of Turkey3 and consequently the deficiencies regarding Special Recommendation II

which sets out terrorist financing offence and Special Recommendation III which sets out

freezing procedure regarding terrorist assets were not removed.

After the evaluation of the Seventh Follow-up Report of Turkey at the FATF Plenary of

February 2012, it was decided to schedule a high level visit to Turkey on grounds that Law on

Prevention of Financing of Terrorism adequately addressing Special Recommendation II and

III was not enacted and the visit was made on 21-22 May 2012 by a mission in which the

President and Deputy President of FATF also participated. At the FATF Plenary of October

2012 where Turkey’s Ninth Follow-up Report was discussed, it was decided to suspend

Turkey’s FATF membership unless the aforementioned Law was enacted until 22 February

2013 with provisions complying with FATF criteria.

4.2. TheProcess of “International CooperationReviewGroup (ICRG) in FATF -

TurkeyRelation

1. In G-20 Leaders Summit held in London on 2 April 2009, it was decided that FATF would

determine the risky countries in terms of anti-money laundering and terrorist financing and

take necessary measures in this respect.

2. It was decided in the G-20 Leaders Summit held in Pittsburgh on 20-25 September 2009

that FATF would publish a list until February 2010 on countries that it determined to be risky

in terms of anti-money laundering and terrorist financing.

following the adoption of mutual evaluation report in the Plenary Meeting, a “follow-up report” on

recommendations which have been assessed as inadequate. After the discussion of follow-up report at

the Plenary Meeting, if it is decided that the country has not made sufficient progress, the country is

put under an enhanced follow-up and in this scope, a sanction mechanism is applied. This sanction

mechanism may include submission of follow-up reports by the country within periods shorter than a

year (for example every four months), writing an official letter to relevant Minister explaining the

gravity of the situation, paying a high-level visit to the country for the same purpose, applying

Recommendation 21 which regulates relations with risky countries; and may go so far as terminating

the FATF membership. 3 Please refer to section of “International Cooperation Review Group (ICRG) in FATF-Turkey

Relations” for information on Action Plan.

45

3. The countries that were determined as risky according to the criteria4 set by FATF within

the scope of ICRG process were included in a pool of review and the countries under this

scope were divided into Africa-Middle East, America, Asia-Pacific and Europe-Eurasia

Regional Observation Groups based on their geographical location.

4. Turkey, having 9 partially complaint and 1 non-compliant ratings out of 16 core and key

principles according to the III-Round Mutual Evaluation Report of Turkey published by FATF

in 2007 and thus, having a total of 10 ratings that are either partially compliant or non-

compliant, was automatically referred to pool of review based on the referral criteria and was

included in the Europe-Eurasia Regional Review Group.

5. The review report drawn up in this scope stated that “the arrangements regarding the scope

and elements of the terrorist financing offence in the current legislation of Turkey are

deficient and insufficient, and there is not any arrangement with regard to freezing procedures

for terrorist assets.”

6. In order to remedy the deficiencies stated in the report, Turkey drew up an action plan and

submitted it to FATF on 18 January 2010. In the action plan; it was stated that a draft law

would be drawn up to remedy the deficiencies regarding terrorist financing and freezing

procedure, and that draft was expected to be sent to Turkish Great National Assembly until

June 2010 and become a law by the end of 2010.

7. In accordance with the action plan submitted to FATF; under the coordination of Ministry

of Justice, a draft law on terrorist financing was published by efforts of the authorities from

Ministries of Justice, Interior and Foreign Affairs, MASAK and Undersecretariat of Treasury,

and the scholars and the draft was sent to Prime Ministry by Ministry of Justice in June 2010.

8. Since some of the articles of the draft needed to be revised in legal and technical terms,

some amendments were made in the draft by the joint work of the authorities from Ministries

of Justice, Interior and Foreign Affairs, MASAK and Undersecretariat of Treasury, and the

scholars and the revised draft was sent by Ministry of Justice to the Prime Ministry on

20.12.2010. The Draft Law submitted to Turkish Great National Assembly by the Prime

Ministry on 01.02.2011 could not be enacted as the Turkish Great National Assembly was

closed in April 2011 due to general elections to be held in June 2011.

9. After Turkish Great National Assembly (TGNA) started its new legislative session on

01.10.2011, the concerning Draft Law was sent to TGNA once more on 21.10.2011.

4The criteria used for subjecting countries to a review process within the scope of ICRG are as follows:

a) being nominated by FATF or FATF Style Regional Bodies (FSRB),

b) automatic referral if, according to the Mutual Evaluation Report of the Country, the ratings of ten or more of the 16

Recommendations which are called “core” and “key” recommendations (Recommendation 1, 3, 4, 5, 10, 13, 23, 26, 35, 36, 40

andSpecial Recommendation I, II, III, IV and V) are partially compliant (PC) or non-compliant (NC),

c) automatic referral based on non-participation in FATF or FSRBs, or not agreeing to publish its Mutual Evaluation Report

46

10. In 2011 FATF Plenary Meeting held in Mexico in June, with regard to the Action Plan

Turkey submitted to FATF, it was decided that Turkey should be put into Public Statement5 as

the Draft Law was not enacted although one year passed after its commitment and for this

reason there were no progresses made.

11. The new legislative session of the TGNA started on 1 October 2011, and the Draft Law

which could not be enacted in the previous session was sent to TGNA on 21 October 2011 in

the new legislative session.

12. TGNA Justice Commission discussed the Draft Law on 22 March 2012 and decided to

refer it to sub-commission. The sub-commission discussed it on 17-18 April 2012 and made

some amendments. Upon the report by the sub-commission, the Justice Commission

concluded its general discussion on the Draft Law on 2 May 2012.

13. In line with the decisions made at the FATF Plenary in February 2012, a high-level

mission comprised of the FATF President, Secretariat and delegation of some member

countries visited Turkey on 21-22 May 2012 and held meetings with the Minister of Justice,

Minister of Finance, and members of the TGNA Justice Commission.

14. Meanwhile, the legislative session ended and the TGNA closed on 04 June 20012.

Therefore, the commission meetings where they discussed the Draft Law on the Prevention of

Financing of Terrorism on article basis could not be completed.

15. The first Plenary and Working Group meetings of FATF’s 24th

term were held in Paris on

15-19 October 2012. At the Plenary, it was noted that Turkey still had not enacted the Draft

Law on the Prevention of Financing of Terrorism which was promised in the action plan

submitted to FATF and therefore had not made enough progress, and it was decided to

suspend Turkey’s FATF membership unless the aforementioned Law passed until 22

February 2013 with provisions complying with FATF criteria.

4.3. Memorandums of Understanding (MOUs) SignedwithCounterpartInstitutions

Under the Article 12 of the Law No.5549, President of MASAK is authorized to sign the

memoranda of understanding, which are not in the nature of international agreement, with

foreign counterparts and to amend the memoranda of understanding signed in order to ensure

exchanging information within the scope of duties of the Presidency and the signed

memoranda of understanding and their amendments enter into force by the Decision of

Council of Ministers.

In this framework, MOUs were signed with the financial intelligence units of the following

countries.

5 Public Statement is a document that FATF publishes the list of ;jurisdictions subject to a FATF call on its members and other jurisdictions to apply countermeasures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions (1.group list)and jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress inaddressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies (2. Group list).These jurisdictions are; 1. group: Iran and North Korea, 2.group: Cuba, Bolivia, Ethiopia, Kenya, Myanmar, Nigeria, Sao Tome and Principe, Sri Lanka, Syria and Turkey.

47

● In 2006; Turkish Republic of Northern Cyprus

● In 2007; Indonesia, Portugal and Sweden

● In 2008; Mongolia, Afghanistan, Georgia, Albania, Syria and Romania

● In 2009; Croatia, Macedonia, South Korea and Bosnia Herzegovina

● In 2010; Japan, Ukraine, Norway, Jordan, Senegal and Luxembourg

● In 2011; Belarus, United Kingdom, Canada, Monaco, Finland, Australia

● In 2012; USA, Holland, Belgium, Poland, Malaysia, Kosovo, Russia Federation, Republic

of The Philippines.

4.4. MeetingsAbroad

MASAK participated in the following meetings held abroad in 2012:

●Plenary and working group meetings held in Paris by FATF for reviewing

Recommendations.

●ICRG (International Cooperation Review Group) meeting held in Paris by FATF.

●ECO (Economic Cooperation Organization) Experts Meeting held in Teheran by ECO.

●Seminar on “Conflict of Interest in Combating Corruption” held in Brussels by TAIEX.

●Meeting on “Combating Money Laundering and Financing of Terrorism” held in Vienna by

OSCE.

●2012 February plenary and working group meetings held in Paris by FATF.

●Meeting on “Proceeds of Crime and Money Flow through Internet” held in Kiev (Ukraine)

by European Council.

●Meeting held in Paris by “Task Force on Tax Crimes and Other Crimes” TFTC-OECD.

●Meeting on “Construction of Asset Recovery Unit” held in Warsaw by TAIEX.

●Meeting on “Determinations and Suggestions relating to Asset Recovery Unit” held in

Wiasbaden (Germany) by TAIEX.

● Meeting on “Determinations and Suggestions relating to Asset Recovery Unit” held in

London by TAIEX.

●Seminar on “Confiscation and Recovery of Assets” held in Jakarta (Indonesia) by UN and

Asia Pacific Group.

●Meeting held in Rome by OECD Tax Crimes and Other Crimes Forum.

●Plenary and working group meetings held in Moscow by FATF and Eurasia Group.

48

●Meeting on “Laundering, Search, Seizure and Confiscation of Proceeds from Crime” held in

Strasbourg by European Council.

●2012 June Plenary and working group meetings held in Rome by FATF.

●Workshop on “Finance related to criminal organizations performing organized migrant

smuggling through Turkey and Southeast Mediterranean” held in Greece.

●Conference on “Tax Fraud and Money Laundering-legislative Regulations and Positive

practices” held in Tbilisi by TAIEX.

●Plenary and working group meetings held in St. Petersburg (Russia) by Egmont Group.

●Meeting on “Combating Money Laundering and Financing of Terrorism” held in Postdam

(Germany) by East Germany Banking Union.

●Regional seminar related to “Determination and Recovery of Stolen Assets” held in Vienna

by OSCE.

●Meeting on “Recovery of Assets” held in Doha (Qatar) by G8-Deauville Common Platform.

●ICRG meeting held in Paris by FATF.

●Meeting held in London by General Directorate of Security Boğaziçi Working Group.

●Plenary and working group meetings held in New Delhi (India) by Eurasia Group.

●Meeting on “The Last Developments, EU Standards, International Cooperation in

Combating Human Trafficking and Experiences of Member Countries” by TAIEX.

●Training programme on “Customer Identification, Customer Due Diligence Principles,

Suspicious Transaction Reporting in Preventing Laundering Proceeds of Crime and New

FATF Recommendations” held in Nicosia by The Central Bank of TRNC .

●Training programme on “Financing of Terrorism” held in Washington by USA Federal

Bureau of Investigation.

●Information and Communication Technologies Fair held in Frankfurt by HD Discover.

●Meeting on “Russia-Turkey Consultations on Combating Terrorism” held in Moscow by

Ministry of Foreign Affairs.

5. Training

andInformingActivitiesandOtherActivitiesforIncreasingPublicAwareness

Execution by obliged parties of preventive measures introduced with regard to anti-money

laundering and terrorist financing is very important in terms of revealing and preventing the

laundering acts, and preventing the use of financial system as an instrument in commission of

these crimes. In order to increase obliged parties’ awareness of preventive measures and

ensure that they implement these measures, MASAK carries out training activities for obliged

parties. Furthermore, the activities for ensuring cooperation and coordination between

49

regulatory and supervisory bodies participating in combating terrorist financing and the law

enforcement bodies and activities for informing examiners continue to be carried out

intensely.

Information regarding the training activities for obliged parties and other public institutions

and for Finance experts and assistant experts given by MASAK in 2012 is stated below.

5.1. In-houseTrainings

A “Basic Training” program was held between 13.02.2012-20.04.2012 for newly recruited

XV. Term Finance Assistant Experts. In the scope of the training program, experts from

relevant institutions trained the assistant experts on issues of anti-money laundering and

terrorist financing legislation, banking, foreign exchange, capital markets, tax and customs

legislation, and criminal and commercial law. 15 assistant experts received a total of 4185

hours of training within the scope of the mentioned training program.

Within the scope of new planning realized in MASAK in 2012, a total of 396 hours of

training was given to 11 technical staff acting in “Information Technologies and

Communication Group” between 29.04.2012-05.05.2012.

Within the scope of “Plan and Application Principles of 2012 In-house Training”, a total of

660 hours of “Training concerning Adaptation to Changes” was given to 22 people comprised

of 14 Finance Experts, 4 Assistant Finance Experts, 3 Data Preparation and Control Operators

and 1 Tax Inspector between 21-25.05.2012; a total of 3480 hours of “IFIS-Integrated

Financial Intelligence System” and “Brushing up Training” was given to 104 people

comprised of 45 Finance Experts, 36 Assistant Finance Experts, 4 Tax Inspector, 12 Revenue

Experts, 3 Chief, 11 Data Preparation and Control Operators, 2 programmer, 1 Engineer and 1

statisticians in two periods between 5-10.11.2012 and 11-16.11.2012.

5.2. Training ActivitiesforObligedPartiesandOtherPublicInstitutions

Activities for training the personnel of financial institutions and other obliged parties about

anti-money laundering and terrorist financing obligations introduced by Law No. 5549 and

related secondary legislation continued intensely in 2012 as well.

In this scope, MASAK provided training on AML/CFT obligations in Ankara and Istanbul for

financial leasing companies, Istanbul Stock Exchange, courier companies, The Central Bank

of The Republic of Turkey, Development Bank of Turkey and General Directorate of Post.

Besides, training for trainers programme was provided to the authorities of insurance

companies, capital market intermediary institutions, factoring and financial leasing

companies. MASAK also carried out training activities for relevant law enforcement units

involved in the fight against money laundering and terrorist financing.

Additionally, MASAK provided trainings including its experiences and knowledge for the

authorities of Turkmenistan in order to make contributions to the creation of necessary

institutional and legal infrastructure in combating laundering and terrorist financing.

50

Within the scope of studies carried out for the purpose of making the suspicious transaction

reporting system more efficient, a workshop was held in Istanbul in order to introduce and

evaluate the “MASAK.ONLINE” System established with the redevelopment of existing e-

STR system for the compliance officers and authorities of banks.

In this scope, information on training activities provided in 2012 by MASAK is given below.

Table 29– Training and Information Activities (2012)

The Agencies

Participated in

Training

Activities

Number of

Training

Activities

Training Hours Number of

Trainers

Number of

Participants

Obliged Parties 10 72 18 413

Law Enforcement

Units 11 31 14 509

Examiners 3 16 3 61

Other

2 20 5 212

Total 26 139 40 1.195

6. Information Technologies andCommunicationActivities

MASAK considerably carries out its duties and activities in the scope of the Law No.5549

based on information systems.

MASAK Information Systems Strategy is comprised of steps as vision determination,

planning necessary activities and putting the planned activities into effect. Within the scope of

concerning strategic vision studies, it is necessary to discuss continuously the information

systems activities with reengineering understanding, to determine the other FIU samples in

the world relating to information technologies, to take into consideration the implementations

in the form of international recommendations concerning EU Acquis and FATF standards, to

examine the structure of the information systems in the other public institutions in Turkey and

the technologic and academic developments in this field and to carry out the studies in

continuance.

51

As the result of the analysis of requirements conducted in 2011, it has emerged that MASAK

information systems should be re-established paying regard to principles such as

“uninterrupted service”, easy management” and “efficient use of system resources” in

accordance with National Plans and Programs, e-Transformation Turkey Project and

Information Society Strategy. Accordingly, “Enhancement Program of Administrative

Capability” and “MASAK IT Modernization Program” has been prepared and started to be

implemented in 2012.

6.1. Enhancement Program of AdministrativeCapability

Under the program, it was targeted that MASAK information systems would use the modern

technology effectively and intensively, would have a simpler structure in comparison with the

current system ensuring high performance, would be easy to be managed administratively and

would have cost-efficient IT processes.

Within this scope, “Information Technologies and Communication Group” has been

established for carrying out the activities more healthy such as project designing, project

execution and institutional development activities. The activities which were previously

carried out within the framework of development activity of IT governance model through

Directorate of Information Processing have been started to be executed within the new

established “Group of Information Technologies and Communication”.

Within the scope of the program, trainings on information system management models have

been taken with the participation of institution management, domain experts and technical

team. In the framework of these activities, the management models commonly adopted by the

other public institutions’ IT departments have been examined and as a result it is considered

to be suitable to redesign MASAK IT Center in the model of “Matrix Organization Structure”

which is a modern management model. The job definitions of each unit in the organization

have been redefined in parallel with the newly established infrastructure.

52

6.2. MASAK IT Modernization Program

“MASAK IT Modernization Program” is consisted of a

range of projects designed with the concept of

reengineering. The main target of the program is to

develop an integrated information system which will

carry out more effectively the process of combating

money laundering and terrorist financing together with

the counterpart institutions. MASAK realizes its e-

transformation with the “IT Modernization Program” in

line with e-state strategy. In this way, an integrated

platform has been developed which can be entirely

managed in electronic environment for the working

processes carried out together with the national and

international counterparts.

Within the scope of Modernization Program, two projects have been developed under the

name of MASAK IT Systems Modernization (Modernization Project) and Efficiency in

Combating Money Laundering and Terrorist Financing

(Harmonisation Project).

Modernization Project is carried out under five different

components. The main activities as of components are;

Modernization of MASAK Data Center, Software

Development Services, Analysis Systems and Business

Intelligence Implementations, Certification and Security

Control Services, Business Continuity and Installation

of Disaster Recovery Center.

The Harmonization Project is composed of the

components twinning and investment and targeted to

harmonise with its counterparts by increasing the legal, administrative and technical capacity

of MASAK.

With the Project supported with EU co-finance in the scope of 2012 Financing Agreement, it

is targeted to harmonize the business process possessed within the scope of Modernization

Mission of Program

To make the processes of

combating money laundering and

terrorist financing more effective,

quick and reliable

To ensure reliability of financial

system

To contribute to national security

To contribute to strengthen of

economy

Vision of Program

To establish a modern and reliable

information and communication

system which will strengthen the

process of collecting and analyzing

of financial data and disseminating to

the relevant units

53

Project activities and data processing capabilities with the sample systems implemented and

showed parallelism in counterparts in EU member countries and organizations, by this means

to make more efficient the combating period with laundering proceeds of crime and terrorist

financing.

In 2012, within the scope of Modernization Program; modernization of data centre, the large

part of software development activities and modernization of security infrastructure activities

have been completed. Development activities of the analysis systems and business

intelligence implementations, establishment of business continuity and disaster recovery

centre are planned to be performed in 2013.

Within this scope, the activities carried out under the name of Modernization Program by

Information Technologies and Communication Group have been summarized as follows:

Modernization of Data Centre: The activity of “Modernization of MASAK Data Centre”

which is the first component of multi-annual investment project “Modernization of MASAK

Information Systems” has been completed as of October 2012. Under the component, the

hardware, shelfware, network infrastructure of MASAK Information Systems have been

established using new technologic systems, the systems have been redesigned in redundant

architecture as required by modern buildings and the technical infrastructure has been set up

relating to new electronic suspicious transaction reporting system.

Integrated Financial Intelligence System (EMİS):

Within software development framework,

institutional software was designed taking

modern technological developments into

attention and institutional modules were

redeveloped at first at the rate of available

capacities. The most important output of

these activities has been the Integrated

Financial Intelligence System (EMİS).

EMİS, which is a system ensuring integration with other public institutions, has been

developed with the understanding of reengineering parallel to the information society

strategy. Furthermore, EMİS led to automation of collection, integration and analysis

processes of the data which are the steps of financial intelligence process.

The medium and long term outcome of EMİS for our country will be conducting faster,

higher quality and more reliable AML/CFT activities.

MASAK.ONLINE System: MASAK.ONLINE system has been built up for ensuring that

obliged parties send STRs and their annexes in electronic environment. With

54

MASAK.ONLINE system, which was developed in the scope of BT Modernisation Program,

the online STR system which was used only by the banks formerly has now been open to all

obliged parties. In other words, all natural and legal persons acting in sectors linked to

financial transactions will be able to send online STRs by signing up the MASAK.ONLINE

System.

Modernisation of Security Infrastructure: In 2012, Modernisation of Information System

Security Infrastructure was completed under the scope of Modernisation Project; and the

technical infrastructure required for the security audit to be carried out with TÜBİTAK and

for ISO 27001 information security management system certification.

C. PerformanceResults

1. Table on PerformanceResults

The tables relating to realization value of MASAK performance indicators stated in

2012 Ministry of Finance Performance Program are as follows.

55

Year

Unit

Performance Target

1. Quarter 2. Quarter 3. Quarter 4. Quarter

4,50 6,00 7,50 9,00 7,50 7,50 33,33 -66,67 Not attained

6,00 6,00 6,00 6,00

0,00 1,50 1,50 1,50

0,00 0,00 1,50 1,50

0,00 0,00 0,00 -1,50

Year-end

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target(%)

2012

12.00.35.00 / MASAK

Efficiency will be provided in combating offences of laundering proceeds of crime and terrorist financing.

Reason of Deviation

Completion Period of Evaluations regarding

Laundering Offence (Month)

Strategic Purpose

Strategic Target

Performance Indicator

To prevent offence economy, corruption and unregistered economy

To prevent laundering proceeds of crime and terrorist financing

Degree of Attaining

the TargetTarget

Realized

MONITORING REPORT ON PERFORMANCE INDICATOR REALIZATION

Measures to be taken against Deviation

Although the evaluation period regarding laundering offence does not show the efficiency in combating offence alone, the shortness of this period

will shorten the period of criminal investigation in total. In this scope, the coompletion of period evaluations relating to laundering offence has been

specified as performance indicator.

Evaluation and Analyzing Group

Deviation in target has been observed thanks to expansion of files with new findings and late arrival of information requested from other public

institutions.

Definition

Source of Indicator

Analysis of Performance Results

-4,00

-2,00

0,00

2,00

4,00

6,00

8,00

10,00

1 2 3 4

Performance Realization in Quarterly Periods


4,50

7,50

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

Target Year-end Realization

Performance Target - Year-End Realization

56

Year

Unit

Performance Target


9.000,00 3.758,00 7.896,00 11.401,00 15.318,00 15.318,00 170,20 70,20 Target Exceeded

3.758,00 3.758,00 3.758,00 3.758,00

0,00 4.138,00 4.138,00 4.138,00

0,00 0,00 3.505,00 3.505,00

0,00 0,00 0,00 3.917,00



One of the most important activities within the scope of prevention of laundering proceeds of crime and terrorist financing is to receive, analyze

and evaluate STRs received. For this reason, the number of STRs received is specified as performance indicator. However, when examining 2010

data, it was seen that only 3 of the STRs among sent 10.251 STRs were assessed to be requiring denunciation. For this reason, as of 2011, the

issues were concentrated on sending reports, relating to same subjects, in the same one without seperating them, filling in form fields in the

standart format and properly. Although the target for the number of suspicious transaction report is aimed lower than the other years, ensuring

sending of the reports properly is targeted.

Data Analysis Group

The number of STRs sent electronically were 13.759 among 15.318 STRs in 2012. Implementation of electronic transmission of suspicious

transaction was primarly used in banking sector by MASAK and %99.9 of the suspicious transaction reports conveyed to MASAK in 2012 were

transmitted electronically. As it is secure, fast and easy to send the reports electronically, it also contributes to the increase in the number of

reports in banking sector.

Definition

Source of Indicator


Reason of Deviation

Number of STRs Received (Number)

Strategic Purpose

Strategic Target


To prevent offence economy, corruprtion and unregistered economy


Degree of Attaining

TargetTarget

Realized Year-end

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


0,002.000,004.000,006.000,008.000,00

10.000,0012.000,0014.000,0016.000,0018.000,00

1 2 3 4



9.000,00

15.318,00

0,00

2.000,00

4.000,00

6.000,00

8.000,00

10.000,00

12.000,00

14.000,00

16.000,00

18.000,00



57

Year

Unit

Performance Target


10.000,00 2.500,00 5.126,00 5.126,00 8.606,00 8.606,00 86,06 -13,94 Not attained

2.500,00 2.500,00 2.500,00 2.500,00

0,00 2.626,00 2.626,00 2.626,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 3.480,00



Although the trainings arranged by MASAK within the scope of 2012 on-the-job training plan are carried out in May, June, September and

October, they may be carried out in other months of the year in case of needs. Additionally, participation is also provided to the trainings organized

by MAYEM (Finance Training Center of Ministry of Finance).

Training Group

Spring term on-the-job trainins were arranged for less than the number of planned personnel

Definition

Source of Indicator


Reason of deviation

Trainings for development of profession and

legislation knowledge for meeting the institutional

and personal needs of personnel (man*hour)

Strategic Purpose

Strategic Target




Degree of Attaining

TargetTarget

Realized Year-end

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


0,001.000,002.000,003.000,004.000,005.000,006.000,007.000,008.000,009.000,00

10.000,00

1 2 3 4



10.000,00

8.606,00

7.500,00

8.000,00

8.500,00

9.000,00

9.500,00

10.000,00

10.500,00


Performance Target- Year-End Realization

58

Year

Unit

Performance Target

1. Quarter 2. Quarter 3.Quarter 4. Quarter

5.000,00 0,00 0,00 0,00 -100,00 Target not Attained

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


Reason of Deviation

Number of persons received e-learning for obliged

parties (Number)

Strategic Purpose

Strategic Target




Degree of Attaining

TargetTarget

Realized



It is aimed to monitor the number of persons participated to the e-learning studies for obliged parties.

Trainig Group

Target could not be attained as the infrastructure of e-learning program was not completed in 2012.

Definition

Source of Indicator


0,000,100,200,300,400,500,600,700,800,901,00

1 2 3 4



5.000,00

0,000,00

1.000,00

2.000,00

3.000,00

4.000,00

5.000,00

6.000,00

Target Year-End Realization


59

Year

Unit

Performance Target

1.Ouarter 2. Ouarter 3. Ouarter 4. Ouarter

3,00 1,00 2,00 2,00 3,00 3,00 100,00 0,00 Target Achieved

1,00 1,00 1,00 1,00

0,00 1,00 1,00 1,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 1,00



Within this scope, workshops will be carried out with the participation of MASAK and examiners in order to ensure effective cooperation with

supervision units and law enforcement units.

Training Group

Target effectively attained

Definition

Source of Indicator


Reason of Deviation

Number of workshops carried out for supervision units

(Unit)

Strategic Purpose

Strategic Target




Defree of Attaing

TargetTarget

Realized Year-end

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

1 2 3 4


1.Ouarter 2. Ouarter 3. Ouarter 4. Ouarter

3,00 3,00

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50



60

Year

Unit

Performance Target


90,00 75,00 87,50 85,00 87,50 87,50 97,22 -2,78 Target not Attained

75,00 75,00 75,00 75,00

0,00 12,50 12,50 12,50

0,00 0,00 -2,50 -2,50

0,00 0,00 0,00 2,50

Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


Reason of Deviation

Number of files brought to trial/Number of files

denounced (%)

Strategic Purpose

Strategic Target




Degree of Attaining

the TargetTarget

Realized



It defines the number of denunciations brought to trial in laundering offences. This ratio is desired to be % 100. This situation means that the public

prosecutors and the courts find the denouncement reports adequate to bring lawsuit.

Examination Group

24 files were denounced and also lawsuits regarding 21 files were brought in 2012.

Definition

Source of Indicator


-20,00

0,00

20,00

40,00

60,00

80,00

100,00

1 2 3 4



90,00

87,50

86,00

86,50

87,00

87,50

88,00

88,50

89,00

89,50

90,00

90,50



61

Year

Unit

Performance Target


1,00 1,00 1,00 1,00 1,00 1,00 100,00 0,00 Target Achieved

1,00 1,00 1,00 1,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00



The evaluations carried out relating to reportings on violation of obligations received within the organization or from outside the organization under

Regulation on Measures are desired to be completed in a resonable period of time. Especially as the result of the evaluation, if the case is decided

to be submitted to examiners stated in Law No.5549 in order to be subject to inspection of obligations and as the result of the inspection if any

acts against obligations are determined which administrative penalty should be applied, it is necessary to act immediately as the lapse of time for

admimistrative fine is 3 years. Within this scope, the evaluation period relating to violation of obligation is determined as performance indicator.

Inspection of Obligations Group

Target effectively achieved

Definition

Source of Indicator


Reason of Deviation

Evaluation Period regarding Violation of Obligation

(Month)

Strategic Purpose

Strategic Target




Degree of Attaining

the TargetTarget

Realized Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target(%)

2012

12.00.35.00 / MASAK


0,00

0,20

0,40

0,60

0,80

1,00

1,20

1 2 3 4



1,00 1,00

0,00

0,20

0,40

0,60

0,80

1,00

1,20


Performans Target - Year-End Realization

62

Year

Unit

Performance Target


14,00 12,00 11,00 14,00 14,00 100,00 0,00 Target Attained

0,00 0,00 0,00 0,00

0,00 12,00 12,00 12,00

0,00 0,00 -1,00 -1,00

0,00 0,00 0,00 3,00



It is desired to complete the evaluations, relating to referrals and reports received on terrorist financing offences, by preparing a report in the

shortest possible time. Within this scope, for the evaluation reports drafted as the result of the correspodances caried out both with public

institutions and obliged parties in order to obtain information and documents regarding the natural/legal person on whom evaluation is carried out,

the 2012 performance target has been determined as 14 months for terrorist financing evaluations.

Analysis and Evaluation Group on Terrorist Financing

Target effectively attained

Definition

Source of Indicator


Reason of Deviation

The completion period of evaluations relating to

terrorist financing offence (Month)

Strategic Purpose

Strategic Target




Degree of Attaining

the targetTarget

Realized Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


-2,00

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

1 2 3 4



14,00 14,00

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00


Performance Target- Year-End Realization

63

Year

Unit

Performance Target


5,00 2,00 4,00 6,00 8,00 8,00 160,00 60,00 Target Exceeded

2,00 2,00 2,00 2,00

0,00 2,00 2,00 2,00

0,00 0,00 2,00 2,00

0,00 0,00 0,00 2,00

Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK

Efficiency will be provided in combating offences of laundering proceeds of crime and terrorist financing

Reason of Deviation

Number of MOUs signed (Number)

Strategic Purpose

Strategic Target




Degree of Attaining

TargetTarget

Realized


Measures to be Taken against Deviation

The increase in the number of countries with which MOUs signed also increases the cooperation between countries regarding money laundering

and terrorist financing offences holding cross-border characteristics and facilitates combating with these offences. Within this scope, the number of

signed memorandum of understandings have been determined as performance indicator.

Foreign Relations Group

The positive progress in mutual negotiations with countries and rapid processing in signing period of MOUs

Definition

Source of Indicator


0,001,002,003,004,005,006,007,008,009,00

1 2 3 4



5,00

8,00

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00



64

Year

Unit

Performance Target


2,00 1,00 3,00 4,00 4,00 4,00 200,00 100,00 Target Exceeded

1,00 1,00 1,00 1,00

0,00 2,00 2,00 2,00

0,00 0,00 1,00 1,00

0,00 0,00 0,00 0,00


Measures to be Taken against Deviation

Drafting of general analysis report relating to suspect person, organization and sector through conducting general analysis studies on at least one

subject per year. When performing analysis on mass data, it is targeted to use efficiently the relevant software, to import properly and quickly the

data in standard format and by this means to ensure the information flow with relevant units within the institution and outside the institution on risky

persons and organizations.

General Analysis Group

The expansion in working areas and the changes in the number and quality of workings depending on new data

Definition

Source of Indicator


Reason of Deviation

Conducting general analysis studies and report

preparation (Number)

Strategic Purpose

Strategic Target


To prevent offence economy, corruption and unregistered


Degree of Attaining

TargetTarget

Realized Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


0,000,501,001,502,002,503,003,504,004,50

1 2 3 4



2,00

4,00

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50



65

Year

Unit

Performance Target


25,00 6,00 12,00 14,00 24,00 24,00 96,00 -4,00 Not Attained

6,00 6,00 6,00 6,00

0,00 6,00 6,00 6,00

0,00 0,00 2,00 2,00

0,00 0,00 0,00 7,00

Year-end

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


Reason of deviation

Number of Trainings for Obliged Parties and other

public administrations (Number)

Strategic Purpose

Strategic Target




Degree of attaining

TargetTarget

Realized



The number of training programs arranged for enhancing the awareness of personnel of obliged parties on obligations known as the measures in

combating prevention of laundering proceeds of crime and terrorist financing is determined as performance indicator.

Training Group

The training programs of certain obliged parties are postponed to 2013 as the reports of obligation inspection were submitted to MASAK by the

end of 2012.

Definition

Source of Indicator


0,00

5,00

10,00

15,00

20,00

25,00

1 2 3 4



25,00

24,00

23,40

23,60

23,80

24,00

24,20

24,40

24,60

24,80

25,00

25,20


Performance Target-Year-End Realization

66

Year

Unit

Performance Target


182,00 181,00 181,00 181,00 181,00 99,45 -0,55 Target not Attained

0,00 0,00 0,00 0,00

0,00 181,00 181,00 181,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00



The obliged parties (deposit and participation banks, capital market intermediaries, insurance and pension companies and PTT with limited

banking operations) required to establish compliance programs shall be subject to off-site inspection by means of receiving and evaluating the

numeric data relating to training and internal audit activities performed within the year. As the result of this inspection, the obliged parties deemed

insufficient in terms of training and internal audit activities may be taken within the scope of inspection of obligation compliance the following year

according to the evaluationto be carried out. In this way, compliance of obliged parties with obligations will be ensured through off-site inspection.

Inspection of Obligation Group

One intermediary institution ceased its operations in 2012.

Definition

Source of Indicator


Reason of Deviation

Number of obliged parties to be subject to off-site

inspection for training and internal audit activities

(Number)

Strategic Purpose

Strategic Target




Degree of Attaining

TargetTarget

Realized Year-end

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


0,0020,0040,0060,0080,00

100,00120,00140,00160,00180,00200,00

1 2 3 4



182,00

181,00

180,40

180,60

180,80

181,00

181,20

181,40

181,60

181,80

182,00



67

Year

Unit

Performance Target


2,00 3,00 3,00 150,00 50,00 Target Exceeded

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00



Typologies that include the methods and techniques used in laundering proceeds of crime and terrorist financing and also the new trends emerged

in these offences will ensure the increament of awareness of obliged parties and other relevant public institutions.

Legislation and Coordination Group

Target effectively attained.

Definition

Source of Indicator

Analysis of Performance Indicator

Reason of Deviation

Number of Typologies Published (NmberAdet)

Strategic Purpose

Strategic Target




Degree of Attaining

the TargetTarget

Realized Year-End

Realization

Realization

Ratio of Target

(%)

Deviation Ratio

of Target (%)

2012

12.00.35.00 / MASAK


2,00

3,00

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50


Performance target - Year-End Realization

68

2. Evaluation of PerformanceResults

Year

Unit

3 3 7 0

No Performance Indicator TargetYear-End

Realization

Target

Exceeded

Target

Attained

Target Not

Attained

Data could not

be Obtained

1 Number of STRs received (Number) 9.000,00 15.318,00 n

2 Number of MOUs signed (Adet) 5,00 8,00 n

3 Number of files brought to trial/number files denounced (%) 90,00 87,50 n

4Completion period of evaluations regarding laundering

offence (Month)4,50 7,50 n

5Completion period of evaluations regarding terrorist financing

offence (Month)14,00 14,00 n

6 Number of Typologies published (Number) 2,00 3,00 n

7Number of training programs for obliged parties and other

public institutions (Number)25,00 24,00 n

8Conducting general analysis studies and report preparation

(Number)2,00 4,00 n

9Number of obliged parties to be subject to off-site inspection

for training and internal audit activities (Number)182,00 181,00 n

10 Evaluation period for obligation violations (Month) 1,00 1,00 n

11Number of persons received e-learning for obliged parties

(Number)5.000,00 0,00 n

12 Number of workshops carried out for supervision units (Unit) 3,00 3,00 n

13

Trainings for development of profession and legislation

knowledge for meeting the institutional and personal needs

of personnel (man*hour)

10.000,00 8.606,00 n

DISPERSION OF REALIZATION VALUE OF PERFORMANCE INDICATORS ACCORDING TO THEIR DEGREE OF ATTAINING TARGET

2012

12.00.35.00 / MASAK

31%

23%46%

0%

Target Exceeded Target Attained Target Not Attained Data could not be Obtained

69

3. Evaluation of Performance Information System

In 2012, realization values of MASAK’s performance indicators were processed as quarterly

periods into the performance budget monitoring and evaluation module of the Finance SGB.net

system.

V. ASSESSING INSTITUTIONAL CAPABILITY AND CAPACITY

A. Analysis of StrongandImprovableQualifications, Opportunities and Threats (GZFT

Analysis)

The following table gives information about strong and improvable qualifications, and the threats

faced by MASAK while performing its activities.

Table 30– GZFT Analysis

Strong Qualifications

Having a decisive and regulatory role in defining policies for anti-money laundering

purposes and preparation of the legislation in the framework of the defined policies

Having the opportunity of carrying out examination of money laundering offence and

supervision of obligations functions through examiners assigned provisionally by

MASAK

Having the power of signing memoranda of understanding, which are not in the nature

of international treaties, for the purpose of ensuring exchange of information and

documents with international counterparts

Having an experienced group of administrators

Having qualified specialised staff

Having a developed information technology infrastructure

Improvable Qualifications

Inadequate physical facilities

The obligation of employing provisional staff

Carrying out examination of money laundering offence and supervision of obligations

functions through examiners who are not MASAK staff

Opportunities

Its field of function is suitable for international cooperation

Providing trainings for MASAK staff

Threats

Waste of time because of late and deficient responses to information requests sent by

MASAK

70

Having more difficulty in examining and following money laundering offences due to

the high volume of unrecorded economy

Difficulty in defining the nature of financial transactions made by or through the

neighbouring countries because of their financial instability

Difficulties in cooperation and coordination because there are more than one

professional field in investigation of offences

VI. CONCLUSION

As the financial intelligence unit of Turkey MASAK carries out regulating, coordination,

supervision and training activities charged to it upon the Law No. 5549 beside the functions of

collecting data, analysing and forwarding to related bodies. Following a busy schedule MASAK

fulfilled all the priority functions determined in line with strategic objectives and goals found in

2013-2017 Strategic Plan of the Ministry of Finance and 2012 Performance Program.

Training programs for obliged parties and the related law enforcement bodies in AML/CFT field

went on in 2012. 1195 participants were trained in 26 training activities throughout the year.

As a result of the workshops and trainings organised in 2012 for the purpose of achieving a more

active STR system and evaluating supervision of obligations, the number of non-bank financial

institutions which sent STRs increased more than the previous year and reached 108 from 91.

The number of STRs received from these institutions which was 585 in 2011 increased to 1450 in

2012.

Thanks to the new application of STR system launched in 2012 99.7% of 13801 STRs received

from the banking sector was sent electronically, and the number STRs from this sector increased

by 61% with respect to the previous year and reached 15318. Shortly, the “electronic suspicious

transaction reporting” application launched in 2012 led to an accountable increase in the number

of STRs due to the fact that sending STRs electronically is secure, fast and easy.

The activities carried out previously under the Directorate of Information Processing Centre are

now performed by the newly structured “Information Technologies and Communication Group.”

The most important outcomes of the activities carried out under the scope of IT field in 2012 are

the Integrated Financial Intelligence System (EMIS) and the MASAK.ONLINE system.

Solutions previously created by integrating software with different capacities and nature have

been displaced with unique software which were developed only for MASAK’s needs.

Collection, integration and analysis of the data which are the steps of financial intelligence have

been automated via EMIS. Medium and long term benefit to be provided by EMIS for the

country will be faster, more reliable and higher quality AML/CFT activities.

Besides, we organised training programs for the authorities from Turkmen to share our

experiences and knowledge for contributing to their studies of developing the required

institutional and legal infrastructure in AML/CFT.

71

In 2012, 53 obliged parties were examined under the scope of the inspection of compliance with

obligations program prepared related to previous years.

In 2012, the number of people denunciated upon the findings about money laundering offence

following evaluations and examinations was 275.

The number of natural/legal persons with whom information exchange was made as a result of

analysis and evaluation studies related to terrorist financing offence reached 22.370 in 2012. The

number of natural/legal persons with whom information exchange was made as a result of

analysis and evaluation studies related to money laundering offence reached 1.641

Under the scope of ensuring international cooperation, which is one of the essential elements of

AML/CFT, MASAK signed memoranda of understanding with the FIUs of the USA,

Netherlands, Belgium, Poland, Malaysia, Kosovo, Russian Federation and the Republic of

Philippines. Therefore, a mutual understanding on financial intelligence exchange has been built

with important members of international financial system such as the USA, Netherlands, Belgium

and Russian Federation.

MASAK’s activities performed in 2012 under the scope of the “AML/CFT strategic goal” related

to regulation and coordination; collecting, analysing and evaluating data; examination;

supervision of obligations; foreign relations; training; It and communication are given in detail in

related tables and graphics in MASAK Activity Report. Efforts performed currently by MASAK

for the purpose of achieving the strategic objectives and goals and priority works to be done will

continue in 2013 with the same commitment.

MASAK Activity Report.pdfTABLE OF CONTENTS STATEMENT BY HEAD OF MASAK viii I. COMBATING AGAINST...

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