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Turkey: Law to Combat Financing of Terrorism

(Mar. 12, 2013) On February 7, 2013, the Grand National Assembly (Turkey’s parliament) adopted the Law on the Prevention of the Financing of Terrorism. Turkish President Abdullah Gül approved the bill on February 15, and it entered into force the following day. (Sarah Paulsworth, Turkish Parliament Enacts Legislation on Terrorism Financing, PAPER CHASE NEWSBURST (Feb. 8, 2013); Turkish President Gül Approves Bill on Terror Financing, HÜRRIYET DAILY NEWS (Feb. 15, 2013); Terörizmin Finansmaninin Önlenmesi Hakkinda Kanun [Law on the Prevention of the Financing of Terrorism], Law No. 6415 (Feb. 7, 2013), RESMÎ GAZETE, No. 28561 (Feb. 16, 2013).)

Highlights of the Law on the Prevention of Financing of Terrorism are:

  • those who finance or collect money for terrorist groups or people involved with such groups will subject to a sentence of from five to ten years’ imprisonment. (Turkish President Gül Approves Bill on Terror Financing, supra);
  • “financing of terrorism” is defined to cover individuals and organizations who support terrorism at the national or international level by providing funds, and any person who sends money to a terrorist organization listed in relevant United Nations Security Council resolutions could be considered a criminal who supports terrorism (Ali Aslan Kiliç, Government, Opposition Differ over Bill Targeting Financing of Terrorism, TODAY’S ZAMAN (Feb. 3, 2013));
  • introduction of a mechanism to freeze the property of persons and institutions involved in terrorism, with the relevant U.N. resolutions having a determinative effect. According to the Turkish government, the seizure of assets will still be under the jurisdiction of the courts, but a government agency, the Financial Crimes Investigation Board (MASAK) under the Ministry of Finance, will be authorized to “freeze” the assets of those suspected of financing terrorism as a “preventive measure,” when a strong suspicion exists about the individual or organization concerned. (Id.; MASAK, Republic of Turkey Ministry of Finance (last visited Mar. 11, 2013));
  • inclusion of a provision on liability in the event of lawsuits for compensation filed against Turkey because of a freeze request by a foreign government against a person or company in Turkey, to the effect that the Turkish government may ask a foreign government for cash or collateral guarantees against a future lawsuit for compensation (Kiliç, supra); and
  • establishment of an Evaluation Commission on the Freezing of Assets, to examine requests from domestic and foreign entities for such freezes and to submit its decisions on the requests to the Cabinet for approval or denial. (Id.)

The original bill, tabled in the Grand National Assembly in February 2011, was removed from the agenda when, due to upcoming elections, the Assembly did not have enough time to consider it. The proposed law was re-submitted to the Assembly in the next legislative session on October 21, 2011. (Kiliç, supra.) Turkey already has an anti-terrorism law. (Law on Fight Against Terrorism of Turkey, (1991, as last amended 2010), Law No. 3713, LEGISLATIONLINE [scroll down page to view hyperlink].)

Criticism of the Law

While the government defended the legislation as necessary in order to combat money laundering and terrorist financing, opposition groups expressed concern that it gives “arbitrary and sweeping powers” to the executive branch. (Id.) Another major criticism of the new law is the lack of provision of due diligence or court oversight of decisions to freeze assets of suspected terrorism financers. Critics argue that the Evaluation Commission would have the power to freeze the financial assets of dissident media organizations, associations, companies, and labor unions. (Turkish President Gül Approves Bill on Terror Financing, supra.)

Government officials contend, however, that those in charge “would look for clear ‘intent’ to provide funds to terrorist groups,” and pointed out that “[a] similar measure already exists in Article 220 of the Turkish Penal Code (TCK) that describes terrorism financing as a crime.” (Kiliç, supra.) That provision is on forming organized groups with the intention of committing crime. (Criminal Code, Law Nr. 5237 (Sept. 26, 2004), RESMÎ GAZETE, No. 25611 (Oct. 12, 2004), LEGISLATIONLINE; Türk Ceza Kanunu [Turk Criminal Code] (as last amended July 2, 2012), MEVZUAT.)

FATF Pressure

The government has for years been under pressure from the Financial Action Task Force (FATF) of the Organisation for Economic Co-operation and Development to correct deficiencies in Turkey’s program to combat terrorist financing. In a statement on “high-risk and non-cooperative jurisdictions” issued in October 2012, the FATF noted the Turkish government’s commitment to work with FATF but criticized Turkey’s lack of sufficient progress in “1) adequately criminalising terrorist financing; and (2) implementing an adequate legal framework for identifying and freezing terrorist assets.” The organization threatened suspension of Turkey’s FATF membership if it did not enact legislation in line with FATF recommendations by February 22, 2013. (Press Release, FATF, High-Risk and Non-Cooperative Jurisdictions (Oct. 19, 2012); Paulsworth, supra.)

In a statement issued on February 22, the FATF reacted positively to the new law, stating:

Turkey has taken significant steps towards improving its CFT [combating the financing of terrorism] regime, including by enacting a new law that addresses many of the shortcomings identified in Turkey’s terrorist financing offence and creates the legal basis for the freezing of terrorist assets. The FATF welcomes this significant step made by Turkey, which improves the country’s compliance with the international standards. As a consequence, the FATF has decided not to suspend Turkey’s membership. In spite of this positive step, there still remain a number of on-going shortcomings in the Turkish counter-terrorist financing regime. Turkey must address these shortcomings in order to reach a satisfactory level of compliance with the FATF standards. Turkey has committed to addressing these deficiencies and will submit, prior to the next FATF meeting in June 2013, a report on how these deficiencies are being addressed. (FATF Public Statement 22 February 2013, FATF (Feb. 22, 2013).)