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Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative frameworkLegislative framework Administrative and Judicial Cooperation.

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Presentation on theme: "Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative frameworkLegislative framework Administrative and Judicial Cooperation."— Presentation transcript:

1 Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative frameworkLegislative framework Administrative and Judicial Cooperation in Turkish SystemAdministrative and Judicial Cooperation in Turkish System Case StudyCase Study Role of Turkish Financial Intelligence Unit (MASAK)Role of Turkish Financial Intelligence Unit (MASAK) Belgin AKSU ÇANGA Finance Expert MASAK Ministry of Finance Financial Crimes Investigation Board Seminar on Asset Recovery Offices December, 2011 Ankara

2 2 Financial Crimes Investigation Board Established in 1996 Administrative body, works under the Ministry of Finance Turkish financial intelligence unit

3 3 Functions Policy and legislation Information collection, analysis and evaluation Investigation Supervision Coordination

4 4 Money laundering offence in Turkish Law Predicate offenceProceeds of crimeMoney laundering an offence requiring a minimum penalty of six months or more imprisonment, Proceeds obtained from the offence transfers abroad the proceeds obtained from the offence or processes such proceeds in various ways in order to conceal the illicit source of such proceeds or to give the impression that they have been legitimately acquired without participating in the commitment of the offence mentioned above purchases, acquires, possesses or uses the proceeds which is the subject of that offence knowing the nature of the proceeds

5 Sanctions Imprisonment 3-7 years for the acts set in p years for the acts set in p.2 Judicial fine up to days (100.-TL TL) Confiscation of goods and benefits (Turkish Penal Code, Articles 54-55) 5 Penalty of ML Offence

6 Aggravating Circumstances In case ML offence is committed by a public officer or professional person conducted in the course of the activities of an organization established for the purpose of committing an offence

7 Sanctions for Legal Persons Administrative Fine ( TL TL) (Law Number 5326, Article 43/A)-(Amended by Law No on ) Confiscation (Turkish Penal Code, Article 60) Cancellation of License (Turkish Penal Code, Article 60) Penalty of ML Offence

8 (Anti-Terror Law No 3713, Article 8) (Anti-Terror Law No 3713, Article 8) Whoever knowingly and willfully provides with or collects fund for committing partially or fully terrorist crimes, shall be punished as a member of an organization. The perpetrator is punished in the same way even if the fund has not been used. Terrorist Financing Offence

9 Sanctions Turkish Penal Code No 5237, Article 314 Any person who becomes a member of the armed organisation shall be sentenced to a penalty of imprisonment for a term of five to ten years. Turkish Penal Code No 5237, Articles Confiscation of goods Confiscation of benefits Penalty of TF Offence

10 Aggravating Circumstance (Anti-Terror Law, Article 8 / A) In case the perpetrator is a public officer and the crime is committed through the use of the office the imprisonment penalty is increased by half. Penalty of TF Offence

11 Sanctions for Legal Persons Administrative Fine ( TL TL) (Law Number 5326, Article 43/A) (Amended by Law No on ) Confiscation (Turkish Penal Code, Article 60) Cancellation of License (Turkish Penal Code, Article 60) Penalty of TF Offence

12 Monitoring Money Flows

13 Republic of Turkey Ministry of Finance Financial Crimes Investigation Board Disclosure to Customs Administration Passengers disclose fully and accurately on the request of Customs Administration An administrative fine with one tenth of the value carried and of the difference between the value carried and disclosed respectively If the circumstance is considered as suspicious, it shall be conveyed to the MASAK

14 Republic of Turkey Ministry of Finance Financial Crimes Investigation Board Issues regarding wire transfers identify their customers when the amount of a single transaction or the total amount of multiple linked transactions is equal to or more than TRY in wire transfers Obliged parties are required to identify their customers when the amount of a single transaction or the total amount of multiple linked transactions is equal to or more than TRY in wire transfers STR types in MASAK General Communiqué No: 6 Banks and PTT are required to take measures to control of customer and to complete the missing information in wire transfer messages and documents and update them

15 Republic of Turkey Ministry of Finance Financial Crimes Investigation Board Relationships with risky countries To pay special attention to business relationships and transactions in risky countries To obtain information about the purpose and the nature of the transactions To record the information

16 Republic of Turkey Ministry of Finance Financial Crimes Investigation Board Money transfer information to MASAK Under Foreign Exchange Legislation, information of money transfers to abroad exceeding USD and equivalent foreign exchange are reported to Turkish Central Bank (TCB) by banks and subsequently this information are conveyed to MASAK quarterly Daily EFT transactions are transmitted by banks to MASAK as cumulative data

17 Seizure The measures related to seizure are specified in articles of CPL in the section titled “Search and Seizure”. In accordance with the article 123 of CPL, the asset values which are considered to be useful as evidence or to be constituted the subject of confiscation shall be seized. Law No Seizure and Confiscation of Proceeds of Crime

18 Article 17 of the Law No broadens the scope of Article 128 CPL for seizure of assets by extending it to money laundering and financing terror. Accordingly; In cases where there is strong suspicion that the offences of money laundering and financing terror are committed, the asset values may be seized in accordance with the procedure in article 128 of Criminal Procedure Law No Law No.5549 & 5271 Seizure and Confiscation of Proceeds of Crime

19 According to Article 128 of CPL, Seizure decision in accordance with this Article shall only be given by judge. On the other hand According to the Article 17 of 5549, Public Prosecutor shall also give seizure decision in case of any delays giving rise to inconvenience. The seizure applied without the judicial decision is submitted for the approval of the judge on duty at the latest in twenty-four hours. The judge shall decide on whether it will be approved or not at the latest in twenty-four hours. The decision of Public Prosecutor’s Office shall be invalid in case of non-approval. Law No.5549 & 5271 Seizure and Confiscation of Proceeds of Crime

20 20 Confiscation Confiscation of goods Confiscation of benefits Seizure and Confiscation of Proceeds of Crime

21 “Confiscation of goods” and “confiscation of benefits” are established in Articles 54 and 55 of the TCL. - “Confiscation of goods” (Art. 54 of TCL) - “Confiscation of benefits” (Art. 55 of TCL) Both include provisions for confiscation based on value. Law No.5237 Seizure and Confiscation of Proceeds of Crime

22 Confiscation of goods (Art. 54 of TCL) Goods used in committing a deliberate offence or allocated for committing an offence or derived from an offence Goods prepared for use in commission of an offence Goods whose production, disposition, usage, transportation, purchase and sale constitute a crime Law No.5237 Seizure and Confiscation of Proceeds of Crime

23 Confiscation of benefits (Art. 55 of TCL) The material benefits, obtained from committing a crime, constituting the subject of the crime or provided for committing the crime, along with the economic proceeds obtained by the holding or conversion of them, shall be confiscated. Law No.5237 Seizure and Confiscation of Proceeds of Crime

24 Regulation Regarding the Investigation of Laundering Offence Article 11 MASAK or examiners may request for seizure on asset under Article 17 of the AML Law in cases where there is strong suspicion that money laundering offence is committed. Only MASAK may request for seizure on asset under Article 17 of the AML Law in cases where there is strong suspicion that terrorist financing offence is committed.

25 Administrative Cooperation

26 MASAK is authorized; 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, to sign memorandum of understanding. Law No art.19/l-m Administrative Cooperation

27 MASAK has been a member of Egmont Group since MASAK exchanges information with FIUs through the Egmont Secure Web and MOUs. Administrative Cooperation through Egmont Group Administrative Cooperation

28

29 FinlandPortugal MongoliaCroatia AlbaniaRomania NorwaySenegal GeorgiaSouth Korea IndonesiaSweden JapanSyria JordanCanada LuxemburgUkraine Turkish Republic of Northern CyprusUnited Kingdom MonacoBelarus AfghanistanMacedonia Bosnia HerzegovinaAustralia

30 Judicial Cooperation

31 Mutual Legal Assistance (MLA) F ulfillment of legal assistance requests on the basis of the bilateral and multilateral agreements Lack of bilateral or multilateral agreement and reciprocity rule

32 Major International Conventions to which Turkey is a party  European Convention on Mutual Assistance in Criminal Matters  Additional Protocol to European Convention on Mutual Assistance in Criminal Matters  European Convention on the International Validity of Criminal Judgments

33 Since The Additional Protocol of the European Convention on Mutual Assistance in Criminal Matters includes legal assistance on financial crimes, mutual legal assistance requests are not rejected for the reason that the offence is of a fiscal nature.

34 A request for assistance shall include: o The authority making the request o The object of and the reason for the request o Where possible, the identity and the nationality of the person concerned o Where necessary, the name and address of the person to be served o A description of the criminal matter including a summary of the facts and, if applicable, offences and penalties concerned

35 CASE STUDY (AVATAR)

36  “Letter of Request” of Jersey Attorney General has been sent to Turkish Ministry of Justice  The attorney General seeks to confiscate £120 million from Person X  Turkish Ministry of Justice requested from MASAK to make an investigation regarding the case stated in the “Letter of Request” of Jersey Attorney General  MASAK has completed its investigation and sent the report to Ministry of Justice

37 Person X and his illegal activities kg cocaine was imported into Europe from Venezuella in by Person X In 1997, he was convicted in Holland of running an organised crime syndicate that imported 317 kg cocaine In 1997 he was also convicted of the killing of a Turkish inmate in prison-he was released from prison in June 2007 In July 2007 he directed the importation of £1 million cannabis into Jersey from Holland He was arrested in July 2007 and convicted of that crime in October 2009

38 Person X opened an account at a Currency Excange Bureau in the UK. £20 million was laundered through this account between $ 5.7 million and DEM 2.1 million was sent to the accounts of Person Y (19 years old) held in Switzerland. Accounts of Person Y were only kept open for nine months and also received money transfers from Turkish institutions and banks.

39 Some close relatives of Person Y have been convicted of drug trafficking for 5-20 years imprisonment Some close relatives of Person Y were the subject of 4 money laundering cases which predicate offences were drug trafficking-(No conviction) Big amount of money transferred to Person Y from different persons Persons transferred money to the accounts of Person Y were the workers of different companies such as: textile companies, transportation companies, jewellery,

40 Person Y was only 19 years old in 1994 and had no business activities Persons transferred money to Person Y were just the workers of different companies Father and uncle of Person Y were convicted of drug trafficking several times in 1990s Father and uncle of Person Y together with the persons transferred money his accounts were subjects of money laundering cases As a conclusion: It is obvious that these money transfers were related to the drug trafficking activities of father and uncle of Person Y and Person X

41 Asset Recovery Identification Investigation Tracing Freezing Confiscation or Forfeiture Return

42 Asset Recovery TracingIdentification Financial Research TracingIdentification =

43 Proactive sharing of intelligence with law enforcement and prosecutors Provision of ancillary intelligence Having Expertise in financial sectors, products and matters Personal contacts and networks with domestic and international institutions (public or private, financial or non financial) Having the ability to institute an administrative freeze

44 To facilitate tracing and identification of proceeds of crime subject to decision of blocking, seizure and confiscation

45 To have the authority of access to databases To have the authority of obtaining information including financial one from relevant real and legal persons To have the authority of conducting joint investigations with other authorised units To be a central unit

46 To facilitate tracing of criminal assets To participate in confiscation procedures Ensure sound management of seized assets To serve as a central contact point for financial intelligence and confiscation efforts at the international level

47 To collect relevant statistics on asset freezes and confiscations To be in charge of seizing criminal proceeds To serve as a focal point for international requests statistical record-keeping and training

48

49 AROMASAK Asset Recovery OfficeMASAK is unigue financial intelligence unit. Under Law No: 5549, it has the following functions: Policy and legislation Information collection, analysis and evaluation Investigation Supervision Coordination

50 Functions of the AROAuthorities of the MASAK Having access to all related databases such as land registry, company registry, motor vehicles, convictions, tax, police and financial institutions records in order to identify and trace the proceeds of crime Access system Law No: 5549 Article 9 – By the Presidency, an access system may be established to the data processing systems of the public institutions and organizations, and institutions and organizations in the nature of public bodies which keep records regarding to economic activities, wealth items, tax liabilities, census information and illegal activities in accordance with their laws or activities within the principles and procedures defined together by the Ministry and competent authorities of related Ministry and institutions and organizations in the nature of public bodies.

51 Functions of the AROAuthorities of the MASAK To have the authority of obtaining information including financial one from relevant real and legal persons Law No: 5549 Providing information and documents Article 7 – (1) When requested by Presidency or examiners, public institutions and organizations, natural and legal persons, and unincorporated organizations shall provide all kinds of information, documents and related records in every type of environment, all information and passwords necessary for fully and accurately accessing to or retrieving these records, and render necessary convenience. Duties and Powers of the Presidency Law No: 5549 Article 19 1/j … j) To request all kinds of information and documents from public institutions and organizations, natural and legal persons, and unincorporated organizations. …

52 Functions of the AROAuthorities of the MASAK To have the authority of conducting joint investigations with other authorised units Duties and Powers of the Presidency Law No: 5549 Article: 19 1/f-g … f) To request for examination from law enforcement and other relevant units in their fields, when required during the evaluation period. g) To carry out or to have carried out examinations on the subject matters of this Law. …

53 Functions of the AROAuthorities of the MASAK To facilitate tracing and identification of proceeds of crime Under the authority of Law No: 5549, MASAK can obtain any information of public registration, tax liability, assets and illegal activities (Law No: 5549,Article 7, 9 and 19/ı(j)

54 Functions of the AROAuthorities of the MASAK To conduct effective cooperation with other FIUs and judicial authorities Duties and Powers of the Presidency Law No: 5549 Article 19 h/m … h) To examine the cases conveyed from Public Prosecutors and to fulfill the requests relating to the determination of money laundering offence. m) To exchange information and documents with counterparts in foreign countries, to sign memorandum of understanding that is not in the nature of an international agreement for this purpose.

55 The CoE Convention on laundering, search, seizure and confiscation of the proceeds from crime and on the financing of terrorism (Warsaw 16 May 2005) Article 14- Postponement of domestic suspicious transactions “The FIUs or, if appropriate, other competent authorities or bodies should be able to postpone a domestic suspicious transaction.” Article 47- International cooperation for postponement of transactions “The FIU shouıld have the authority to postpone a suspicious transaction at the request of a foreign FIU.”

56 The CoE Convention on laundering, search, seizure and confiscation of the proceeds from crime and on the financing of terrorism (Warsaw 16 May 2005) Article 33- Central Authority “ The Parties shall designate a central authority which shall be responsible for sending and answering requests, the execution of such requests or the transmission of them to the authorities competent for their execution.” Article 46- Co-operation between FIUs “Parties shall indicate the unit which is an FIU within the meaning of this article.”

57 Financial research that will be conducted for the decisions on freezing of assets to be taken by the Assessment Commission shall be performed by MASAK MASAK shall be responsible for executing the decision on freezing of assets MASAK shall have the authority to give permission for the management of the frozen assets to designated person or persons

58 MASAK may audit; - whether persons or entities who hold assets act in compliance with the decision of freezing or not, -whether the frozen assets are managed in compliance with this Law or not. Secretariat services of the Assessment Commission shall be performed by MASAK

59 59


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