Mobster videos resume study of Turkish wealth amnesty law | Business և economics news

Istanbul, Turkey – YouTube videos of convicted Turkish mob leader Sedat Peker accusing government officials of corruption, capturing millions in recent weeks, reopens probe Turkish law critics say money laundering provides amnesty for criminal activity :

The Wealth Amnesty Act, which went into effect in November, allows individuals և companies to return previously undisclosed cash, gold, foreign currency, securities, other assets held abroad, or to declare assets held in Turkey without tax penalty.

The amnesty, backed by the ruling Justice and Development Party (AKP), ostensibly aims to boost Turkey’s epidemic-hit economy.

Former Economy Minister Mustafa Elitas, a member of the AK Party, told Al-Azira Azira that the government had not predicted in advance how much wealth would result from the amnesty, which expires later this month. But, he said, the law is still favorable.

“It’s possible because it brings in additional hidden sources [of wealth] “In our economy,” he said, urging Turks to take advantage of the amnesty.

In March, President Recep Tayyip Erdogan urged Turkish citizens to use the opportunity to bring “our national wealth” out of the shadows and invest it to help the economy.

Becker captivates millions with videos accusing government officials of corruption and other crimes [File: YouTube]

But financial crime experts and members of the Turkish opposition say the law is full of loopholes that criminals can use to launder failed profits.

Under the amnesty, assets can be returned from abroad without any questions. It also allows third parties to declare assets, including legal representatives, company shareholders or proxies.

This means that assets held abroad through reserve companies can end up in tax havens in Turkey without having to study in detail how they were acquired or by whom. Assets can even be transported to the country in a suitcase and declared without further inquiries about their origin.

Critics say it opens the door for foreign criminals to use the Turks to launder so-called “black money”.

“Wealth amnesty can pose a risk if black money or unregistered income is introduced into the system if it does not take appropriate precautions, question the source of the money, or ignore it,” said Oya, President of Transparency International Turkey. Ozarslan told Al Jazeera:

“Given that money laundering requires committing other crimes, such as drugs, terrorism, etc., to wait for access to the system, that risk is possible,” he added.

But supporters of the law say such criticisms are baseless.

“It is completely false,” former Deputy Prime Minister Jeddah Yilmaz told Al Jazeera. “All these issues were taken into account when drafting this regulation. We focused on issues such as terrorist financing and illicit money. We ruled out such scenarios when developing the regulation. As a result, they have no right to make such allegations. “

Last fall, when the law was being drafted, ousted Deputy Finance Minister Osman Dincbas ousted those opposed to the amnesty in January, saying that anti-money laundering schemes were already in place, including the MASAK – Financial Crimes Investigation Council (Financial Control Group). FATF) Global Monitoring Group.

How much money, gold, jewelry and other valuables were brought to the country?

Erdogan Toprak, Republican People’s Party MP

Weakening of asset attraction rules

The Wealth Amnesty, which came into force in November, is the latest iteration of similar laws passed in 2008, 2013, 2016 and 2018. But the previous versions imposed a small tax penalty on the disclosed assets, while the current law is zero.

Critics point out that AK Party lawmakers have repeatedly relaxed regulations not only to attract hidden assets abroad, but also to allow wealthy local supporters to return undeclared wealth, to uncover assets stored inside the country without much attention.

“Today, if someone comes to the border and claims to have brought 30 million euros, all they have to do is fill out an application form for the prosecutor խորհրդի Financial Crimes Investigation Council,” said Professor Nedim Turkmen, international financial affairs expert at Galatasaray. Turkish tax legislation at the university.

According to the current law, a person can invest money in a Turkish bank one day and withdraw it the next day to clear it of any criminal affiliation.

“What worries me the most is that this regulation is not only aimed at importing assets from abroad, but also allows to whiten white colors, in particular, unregistered assets illegally acquired by bureaucrats in Turkey,” he said.

The first amnesty in 2008 saw assets of more than միլի 47 billion (at a current exchange rate of $ 5.4 billion) generating more than միլի 1.5 billion ($ 173 million) in tax revenue. As a result of the further crackdown on transparency, the amount of wealth declared under the current amnesty is not made public.

“We do not know how much money has been legalized as a result of the recent amnesties and regulations,” said Erdogan Toprak, an opposition Republican People’s Party (CHP) lawmaker.

“How much money, gold, jewelry and other valuables were brought to the country?” “The total value of the assets is no longer available to the public,” he told Alaze Azira.

Fragile economy

Erdogan’s government is facing an urgent need for foreign currency and other fixed assets.

Like the rest of the world, the Turkish economy suffered from the COVID-19 blockade. But it has entered the epidemic on a relatively fragile basis due to a policy of rising debt repayment, which is heavily dependent on foreign financing for Turkey; it is vulnerable when investors’ moods turn against its currency, the lira.

Lira loses almost 20% of value after Erdogan ousts market-equivalent central bank governor in March [File: Nicole Tung/Bloomberg]

Although Turkey was one of the few countries that actually experienced positive growth last year, the International Monetary Fund recently noted that “the same policies that boosted growth also deepened previously existing vulnerabilities.”

Turkey’s foreign exchange reserves have been wiped out, with annual inflation at 16.5 percent in the north. The lira has lost almost 20 percent of its value since March, when Erdogan shocked investors by firing the central bank governor, the second governor he ousted in two years.

Rule of Law կողմից Erdoողan’s questions about NATO allies, especially the United States, have also put pressure on the lira.

Corruption և gangsters

Although his amnesty for wealth is being promoted by his supporters as a way to boost Turkey’s economy, some critics say it has exacerbated the country’s financial woes by facilitating corruption by those with close ties to the government.

“These are really governments stolen from the country, its people, by allied companies, individuals who have transferred their billion-dollar fortunes to tax havens,” Garo Paylan, a member of the opposition People’s Democratic Party (HDP), told Al Azeri Azira.

“Corruption, nepotism, vaccination and subtle falsifications have been used to obtain them. “The AK Party is trying to whitewash these illegal assets because it knows it will be voted on soon,” he said.

The latest amnesty comes amid concerns that more and more foreign gangsters are establishing themselves in Turkey.

The headlines of foreign mafia groups, particularly the killings and armed clashes in Istanbul, are regularly published in the country’s newspapers.

But the problem does not have to be limited to foreign criminal elements. According to former Istanbul Police Chief Adil Serdar Sakan, international mobsters are gaining ground in Turkey with the help of local gangsters.

“A foreign member of the mafia would never come to Turkey without the knowledge, guarantee and support of his local partners,” he told Al Jazeera.

“What we are seeing today tells us that certain circles within the current government are working with the mafia. “Even mafia leaders say so openly,” he added.

The defendants in the Beckers’ crimes denied any wrongdoing. But the videos later tarnished Turkey’s already tarnished image [File: Umit Bektas/Reuters]

Former Turkish gang leader Sedat Peker began posting videos in May accusing government officials, including Interior Minister Suleyman Soylu, of baseless allegations of corruption and other crimes.

All those accused by Packer have denied any wrongdoing. But the videos later tarnished Turkey’s already tarnished image when it comes to illegal activities.

Turkey has long seen heroin being smuggled out of its borders from Afghanistan to Europe, as well as people using weapons. Billions of dollars from these illegal enterprises often end up in offshore accounts, and critics believe that part of it is found in Turkey through amnesties of the country’s wealth.

Turkey has come under pressure from the FATF to fight money laundering more effectively. The FATF did not respond to a request for an interview with Al Jazeera.

But some would like to see global sheriffs put more pressure on Ankara.

“Independent international institutions need to be more vocal on these issues,” a senior Turkish finance ministry official, speaking on condition of anonymity, told Al Azeri.

“I really stopped counting the number of amnesties. That’s enough, “he added.

Former Minister of Economy Ufuk Soylemes stated that the amnesty is also viewed badly by the daily law-abiding Turks.

“People who earn a decent living and pay their taxes feel offended by these amnesties,” he told Al Jazeera.

And some say the benefits of the law are pale in comparison to the damage it does to Turkey’s long-term economic health.

“Due to the lack of transparency, democratic deficit and other negative factors, Turkey is no longer a country where investments should be made,” Toprak said. “This further damages the already damaged image of our country and frightens foreign investors.”

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