Gov’t under fire for enabling transfer of dirty money via regulation

Gov’t under fire for enabling transfer of dirty money via regulation



The AK Party’s first legislative action following the elections in which it failed to get the number of seats required to continue its single-party rule for another term, was to press ahead with a regulation on June 8 that allows the outflow of dirty money from the country.

The regulation was issued by the Economy Ministry. According to the regulation, it will be possible to transfer foreign currencies and Turkish lira in cash as well as valuable assets such as gold and diamonds from free trade zones — areas for the duty-free import of raw materials, components, etc. There will be no state inspections of these transfers either by the Customs and Trade Ministry or the Finance Ministry. In addition, since the banking system, or Turkey’s central bank, is left out of this process, it will be impossible to keep track of money and assets that were transferred abroad. Money and valuable assets can now be transported to the free trade zones from which point they can be taken to foreign countries or islands that are notorious for money laundering via ships. If these money and assets are brought back to Turkey, no state authority would be informed about the transfer.

The controversial regulation sponsored by the AK Party government following their inability to obtain a majority government has raised skepticism about the party’s motivation behind the move.

Opposition party representatives have promised to carry the issue to Parliament’s agenda with a parliamentary inquiry and ask the AK Party government for an explanation while economy experts have said the government’s move was caused by “panic” following the election. There are also claims that the government might have pressed ahead the regulation in order to move money abroad whose source it cannot explain.

A deputy from the main opposition Republican People’s Party (CHP), Bihlun Tamaylıgil, said that for the government to push ahead with such a regulation at such a sensitive time raises questions.

“Such decisions should be made after the establishment of the new government. They [the AK Party] hastily took such a step. … Why did it make such a decision? We will ask an accounting from the government. We are waiting for the reopening of Parliament,” she said.

CHP deputy Faik Öztrak said he will submit a parliamentary question to the Parliament Speaker’s Office to find out the reasons why the AK Party government felt the need to press ahead with such a regulation.

“Normally, money transfers among countries are made via banks to make sure the transferred money is not dirty money or used to finance of terrorism. When banks are sidelined, this leads to confusion. … This is a very problematic situation. You cannot explain this to the world. Look, the US is handing down punishments to the world’s biggest banks for this. The ministry should immediately explain the reason behind this move,” he said.

The Nationalist Movement Party (MHP) was also uncomfortable with the regulation dated June 8. The party’s deputy group chairman Oktay Vural said the government is forcing the limits of financial leverages.

“Based on what reason, did you make this decision? Who will benefit from this decision? Did you make this change in order to facilitate some of your work?” asked Vural.

The MHP deputy also said the transfer of money and valuable assets from Turkey in an unsupervised way could also encourage tax evasion and therefore further increase the current account deficit.

Sezai Temelli, a deputy from the pro-Kurdish Peoples’ Democratic Party (HDP) who is also an economist, described the AK Party’s controversial regulation as being “irresponsible.”

“It is a practice that cares for capital owners and disregards public interest. Arbitrary practices have become more prevalent in the country. A legally unsupervised climate is being created. We will take this issue to Parliament’s agenda,” he said.

Former İstanbul Police Department Financial Crimes Unit Deputy Chief Yasin Topçu, who was removed from his post after a corruption scandal went public in December 2013 that implicated senior AK Party government members, also commented on the development. Topçu said what the government is trying to do is very clear and that is attempting to hide the money that it cannot account for.




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