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Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative framework PowerPoint Presentation
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Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative framework

Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative framework

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Seizure and Confiscation of Proceeds of Crime and International Cooperation Legislative framework

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  1. Ministry of Finance Financial Crimes Investigation Board Seizure and Confiscation of Proceeds of CrimeandInternationalCooperation • Legislativeframework • AdministrativeandJudicialCooperationin Turkish System • CaseStudy • Role of Turkish FinancialIntelligenceUnit (MASAK) Seminar on AssetRecoveryOffices 14-15 December, 2011 Ankara Belgin AKSU ÇANGA FinanceExpert MASAK

  2. Financial Crimes Investigation Board • Establishedin 1996 • Administrative body, worksundertheMinistry of Finance • Turkishfinancialintelligenceunit

  3. Functions • Policyandlegislation • Information collection, analysisand evaluation • Investigation • Supervision • Coordination

  4. Predicateoffence Proceeds of crime Money laundering Money laundering offence in Turkish Law an offence requiring a minimum penalty of six months or more imprisonment, • 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 abovepurchases, acquires, possesses or uses the proceeds which is the subject of that offence knowing the nature of the proceeds Proceeds obtained from the offence

  5. Penalty of ML Offence Sanctions • Imprisonment • 3-7 years for the acts set in p.1 • 2-5 years for the acts set in p.2 • Judicial fine up to 20.000 days (100.-TL-2.000.000.-TL) • Confiscation of goods and benefits (Turkish Penal Code, Articles 54-55)

  6. Penalty of ML Offence AggravatingCircumstances 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. Penalty of ML Offence • Sanctionsfor Legal Persons • Administrative Fine (10.000.-TL - 2.000.000.-TL) • (Law Number 5326, Article 43/A)-(AmendedbyLaw No. 5918 on 09.07.2009) • Confiscation (Turkish Penal Code, Article 60) • Cancellation of License (Turkish Penal Code, Article 60)

  8. TerroristFinancingOffence (Anti-TerrorLaw 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.

  9. Penalty of TFOffence • Sanctions • TurkishPenalCode No 5237, Article 314 • Any person who becomes a member of the armedorganisation shall be sentenced to a penalty of imprisonment for a term of five to ten years. • TurkishPenalCode No 5237, Articles 54-55 • Confiscation of goods • Confiscation of benefits

  10. Penalty of TFOffence • Aggravating Circumstance • (Anti-TerrorLaw, 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.

  11. Penalty of TFOffence • Sanctionsfor Legal Persons • Administrative Fine (10.000 TL-2.000.000 TL) (Law Number 5326, Article 43/A) (AmendedbyLaw No. 5918 on 09.07.2009) • Confiscation (Turkish Penal Code, Article 60) • Cancellation of License (Turkish Penal Code, Article 60)

  12. Monitoring Money Flows

  13. Republic of Turkey Ministry of Finance FinancialCrimesInvestigation Board • DisclosuretoCustomsAdministration • Passengersdisclosefullyandaccurately on therequest of CustomsAdministration • An administrativefinewithonetenth of thevaluecarried • and of thedifferencebetweenthe • valuecarriedanddisclosed • respectively • Ifthecircumstance is considered as suspicious, it shall be conveyedtothe MASAK

  14. Republic of Turkey Ministry of Finance FinancialCrimesInvestigation Board • Issues regarding 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 2.000 in wire transfers • STR types in MASAK General Communiqué No: 6 • Banks and PTT are required to take measures to control of customerand to complete the missing informationin wire transfer messagesand documents and update them

  15. Republic of Turkey Ministry of Finance FinancialCrimesInvestigation Board • Relationshipswith risky countries • To pay special attentiontobusinessrelationshipsandtransactions in risky countries • Toobtaininformationaboutthepurposeandthenature of thetransactions • Torecordtheinformation

  16. Republic of Turkey Ministry of Finance FinancialCrimesInvestigation Board • Money transfer informationto MASAK • UnderForeign Exchange Legislation, information of moneytransferstoabroadexceeding 50.000 USD andequivalentforeignexchangearereportedtoTurkishCentral Bank (TCB) bybanksandsubsequentlythisinformationareconveyedto MASAK quarterly • Daily EFT transactionsaretransmittedbybanksto MASAK as cumulative data

  17. SeizureandConfiscation of Proceeds of Crime Seizure The measures related to seizure are specified in articles 123-134 of CPL in the section titled “Search and Seizure”. In accordance with thearticle 123 of CPL, the asset values whichareconsideredto be useful as evidenceorto be constitutedthesubject of confiscationshall be seized. Law No. 5271

  18. Seizure and Confiscation of Proceeds of Crime Article 17 of the Law No. 5549 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. 5271. Law No.5549 & 5271

  19. Seizure and Confiscation of Proceeds of Crime AccordingtoArticle 128 of CPL, Seizure decision in accordance with this Article shallonlybe given by judge. On theotherhand AccordingtotheArticle 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

  20. SeizureandConfiscation of Proceeds of Crime Confiscation • Confiscation of goods • Confiscation of benefits

  21. SeizureandConfiscation of Proceeds of Crime “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

  22. SeizureandConfiscation of Proceeds of Crime 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 • Goodswhose production, disposition, usage, transportation, purchase and sale constitute a crime Law No.5237

  23. Seizure and Confiscation of Proceeds of Crime 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

  24. Role of MASAK in Seizure • Regulation Regarding the Investigation of LaunderingOffence • 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. AdministrativeCooperation

  26. Administrative Cooperation 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. 5549 art.19/l-m

  27. Administrative Cooperation • MASAK has been a member of EgmontGroup since 1998. • MASAK exchanges information with FIUs through the EgmontSecureWeb andMOUs. AdministrativeCooperationthroughEgmontGroup

  28. Memorandum of Understandings (MoUs) Signedby MASAK

  29. JudicialCooperation

  30. MutualLegal Assistance (MLA) • Fulfillment oflegal assistance requests on the basis of the bilateral and multilateral agreements • Lack of bilateralor multilateral agreement andreciprocityrule

  31. Major InternationalConventionsto 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

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

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

  34. CASE STUDY (AVATAR)

  35. Subject of theJudicialCooperation • “Letter of Request” of Jersey Attorney General has been sent toTurkishMinistry of Justice • Theattorney General seekstoconfiscate £120 millionfromPerson X • TurkishMinistry of Justicerequestedfrom MASAK tomake an investigationregardingthecasestated in the “Letter of Request” of Jersey Attorney General • MASAK has completeditsinvestigationand sent thereporttoMinistry of Justice

  36. Subject of theCase • Person X and his illegal activities • 3.000 kg cocainewasimportedintoEuropefromVenezuella in 1991-1992 byPerson X • In 1997, he wasconvicted in Holland of running an organisedcrimesyndicatethatimported 317 kg cocaine • In1997 he wasalsoconvicted of thekilling of a Turkishinmate in prison-he wasreleasedfromprison in June 2007 • InJuly 2007 he directedtheimportation of £1 millioncannabisinto Jersey fromHolland • He wasarrested in July 2007 andconvicted of thatcrime in October 2009

  37. LinksToTurkey • Person X openedan account at a CurrencyExcangeBureauin the UK. • £20 millionwaslaunderedthroughthisaccountbetween 1994-1996. • $ 5.7 millionand DEM 2.1 millionwas sent totheaccounts of Person Y (19 yearsold) held in Switzerland. • Accounts of Person Y wereonlykeptopenfor nine monthsandalsoreceivedmoneytransfersfromTurkishinstitutionsandbanks.

  38. Analysis-CriminalRecordsand MASAK Databases • Somecloserelatives of Person Y havebeenconvicted of drugtraffickingfor 5-20 yearsimprisonment • Somecloserelatives of Person Y were the subject of 4 money laundering cases which predicate offences were drug trafficking-(No conviction) • Bigamount of moneytransferredtoPerson Y fromdifferentpersons • Persons transferred money to the accounts of Person Y weretheworkers of differentcompaniessuch as: • textilecompanies, • transportationcompanies, • jewellery,

  39. AssessmentandConclusion • Person Y wasonly 19 yearsold in 1994 and had no businessactivities • PersonstransferredmoneytoPerson Y werejusttheworkers of differentcompanies • Fatheranduncle of Person Y wereconvicted of drugtraffickingseveraltimes in 1990s • Fatheranduncle of Person Y togetherwiththepersonstransferredmoney his accountsweresubjects of moneylaunderingcases • As a conclusion: • It is obviousthatthesemoneytransferswererelatedtothedrugtraffickingactivities of fatheranduncle of Person Y andPerson X

  40. The AssetRecoveryProcess

  41. AssetRecovery =

  42. TheRoles of FIU’s in AssetRecoveryProcess • Proactivesharing of intelligencewithlawenforcementandprosecutors • Provision of ancillaryintelligence • HavingExpertise in financialsectors, productsandmatters • Personalcontactsandnetworkswithdomesticandinternationalinstitutions (publicorprivate, financialornonfinancial) • Havingtheabilitytoinstitute an administrativefreeze

  43. Task of ARO Tofacilitatetracingandidentification of proceeds of crimesubjecttodecision of blocking, seizureandconfiscation

  44. MainFunctions of the ARO • Tohavetheauthority of accesstodatabases • Tohavetheauthority of obtaininginformationincludingfinancialonefromrelevantrealand legal persons • Tohavetheauthority of conductingjointinvestigationswithotherauthorisedunits • To be a centralunit

  45. MainFunctions of the ARO • To facilitate tracing of criminal assets • Toparticipate in confiscationprocedures • Ensure sound management of seized assets • To serve as a central contact point forfinancialintelligenceandconfiscation efforts at the international level

  46. MainFunctions of the ARO • Tocollect relevant statistics on asset freezes and confiscations • Tobe in charge of seizing criminal proceeds • Toserve as a focal point for international requests statistical record-keeping and training

  47. EVALUATION OF THE FUNCTIONS OF MASAK AND ASSET RECOVERY OFFICE