Financial Action Association Shared Its Opinions at the Parliamentary Committee

The TRNC Republican Assembly's Economy, Finance, Budget and Planning Committee invited the Financial Action Association to share its opinions on the "Prevention of Laundering Proceeds of Crime Draft Law" that was being discussed in the Committee on January 19, 2023.

TRNC Ministry of Finance, Financial Information Unit-MABEB, TRNC Central Bank and Financial Police officials was also attended at the meeting of the members of the Committee, which consists of Parliamentary Deputies, Resmiye Eroğlu Canaltay (Chairman), Fikri Toros (Vice Chairman), Hasan Küçük, Salahi Şahiner, and Hüseyin Çavuş.

The first speaker in the name of our association, our vice-president Can Sarvan, brought up the issue of the proposed law's 10,000 Euro cash limit for TRNC nationals, which is far higher than the cash usage restrictions in Europe. 1,000 Euros in France, Spain, and Italy; she pointed out that it is capped at 3,000 Euros in either Belgium or Portugal. She suggested lowering this amount to less than 10,000 euros.

Sarvan said that the obliged entities can easily find out who the PEPs (Politically Exposed Person) are by creating a free database that includes PEPs and their immediate family members, and that those lists should be regularly updated and provided without charge to all obliged entities.

Can Sarvan continued her statement as follows: “In line with the 'Prevention of Laundering Proceeds of Crime Draft Law', it is necessary that YÖDAK, the institution responsible for regulating our universities, obtain fundamental information such as the number of students attending universities. While betting on other countries from the TRNC is illegal, there is no explanation for the fact that young people in the TRNC are used to betting legally or illegally, that these young people as students recruit bettors from other students at universities, or that they directly encourage students to bet, and that there is no supervision. This is directly opposed to the university island motto. The same is true for drug dealing and crimes such as hacking, phishing, infiltrating company e-mails, stealing credit card information. As an association, we will constantly bring up the use of banks, various payment systems, car dealers, crypto service providers and real estate companies by some 'students' to launder the proceeds of crime.”

Pointing out that the overload in the police could not be reduced due to the closure of some police stations and the need for new police stations to be opened, although one or two police stations are ready to be opened, the Vice President of our Association made the following statements about the supervision of banks: “Almost everyone agrees that imposing money laundering and fraudulent penalties on bank managers all over the world does not work, and that bank managers and owners who commit crimes are only fined without prison sentences are seen by bank managements as a 'cost of doing business'. The deficiencies in the supervision of the TRNC Central Bank, which is responsible for inspecting the banks in our country, have reached an incredible level. Banks were sold to usurers, the Central Bank of the TRNC was able to give consent for the owner of a bank, who is still being prosecuted at the Criminal Court, to transfer his shares to his family members. And the elder brother of a TRNC Central Bank official who audited another bank became the lawyer of the same bank. Today, the lack of supervision in many local banks has become such that the Central Bank of the TRNC was able to realize even the 'error' made by a bank that caused an erroneous display in its own data, after a newspaper reported that there was an increase in NPLs (Non-Performing Loans) of individual housing loans.”

In the continuation of her speech, Can Sarvan reminded that there is no control in the real estate sector regarding flats and houses that were bought with black money and that cannot be lived in, and said, "However, it is possible to confiscate these properties and record them as income to the state, with lawsuits to be filed by checking who these properties belong to and how they were acquired. These properties can be expropriated and housing can be built for those in need. As seen in London, the houses that were bought and left empty also dry up the vitality in the real estate market.

Sarvan said, “It is not in vain that the recent statements of the Financial Action Task Force draw attention to the need to implement the laws prepared. All major organizations in the world that fight money laundering and financing of terrorism emphasize that the seizure of assets obtained with the proceeds of crime and the number of lawsuits filed in this direction are still very low. The recovery of proceeds from crime worldwide by court decisions is even less than 1% of the total proceeds of crime. For this reason, FATF and Interpol have increased calls for enforcement of laws to confiscate criminal assets through a joint initiative in recent months,” she concluded.

During her speech at the Committee, Financial Action Association President Benan Mirza, as a recently retired banker, shared striking examples of money laundering in TRNC banks.

Our Chairman of the Association, Benan Mirza, who conveyed what was encountered in practice and suggested that a special tax number be given in order to keep a record of all expenditures of non-TRNC citizen university students and people who are in the TRNC with a work permit.

Mirza stated that making transactions with this tax number in banks, schools, YÖDAK, Immigration Department and Police transactions will create a great deal of convenience, and an address registration system will also be created thanks to the tax number. Benan Mirza stated that it is essential for universities to enter student number, passport number and tax numbers together in their systems, and when an account is opened in banks, the tax number should be recorded in addition to the student's passport number.

President Mirza stated that it is not at all difficult with today's technology for YÖDAK to notify those whose studentship has ended, to the Department of Immigration, to the Police, and to the banks through the Banks Association, with the information it will receive from universities. She underlined that in this way, the address registration system in the Police, Immigration, universities and banks can be operated easily by being constantly updated.

Benan Mirza, who noted that transactions are made through the accounts of university students, especially in virtual gambling, said, "For this reason, university students should be prevented from getting involved in crime in any way with the information to be delivered to YÖDAK by universities."

Stating that the barcode system applied by a university should be spread to all universities in order to determine whether the student is a student who is continuing education and training, Financial Action Association President Benan Mirza said that as a banker who worked in the field of compliance, she once identified a student with 3 different passports. She emphasized that in similar incidents, they worked with both the MABEB and the TRNC Police to initiate investigations.

She noted that by giving a special and separate tax number to foreign workers coming to our island, the expenditures of the employees can also be recorded. Fikri Toros, Deputy Chairman of the Committee and Republican Turkish Party (CTP) Deputy of Kyrenia posed a series of questions upon the suggestions of Benan Mirza. Our Association President Mirza answered these questions.

Financial Action Association will present its views on the Prevention of Laundering Proceeds of Crime Law in writing to the Economy, Finance, Budget and Planning Committee of the Republic Assembly and share it with the public in a short time.