# EUR-Lex - 52011SC1201 - EN

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# 52011SC1201

**COMMISSION STAFF WORKING PAPER TURKEY 2011 PROGRESS REPORT /* SEC/2011/1201 final */**

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TABLE OF CONTENTS

1........... Introduction.................................................................................................................... 3

1.1........ Preface........................................................................................................................... 3

1.2........ Context.......................................................................................................................... 3

1.3........ Relations
between the EU and Turkey............................................................................. 3

2........... Political
criteria and enhanced Political dialogue............................................................... 5

2.1........ Democracy and
the rule of law........................................................................................ 6

2.2........ Human rights
and the protection of minorities................................................................... 6

2.3........ Regional
issues and international obligations................................................................... 21

3........... Economic
criteria.......................................................................................................... 46

3.1........ The existence
of a functioning market economy.............................................................. 48

3.2........ The capacity
to cope with competitive pressure and market forces within the Union........ 48

4........... Ability to
assume the obligations of membership............................................................. 53

4.1........ Chapter 1:
Free movement of goods............................................................................. 55

4.2........ Chapter 2:
Freedom of movement for workers.............................................................. 60

4.3........ Chapter 3:
Right of establishment and freedom to provide services................................. 60

4.4........ Chapter 4:
Free movement of capital............................................................................. 61

4.5........ Chapter 5:
Public procurement...................................................................................... 62

4.6........ Chapter 6:
Company law.............................................................................................. 64

4.7........ Chapter 7:
Intellectual property law............................................................................... 65

4.8........ Chapter 8:
Competition policy....................................................................................... 66

4.9........ Chapter 9:
Financial Services........................................................................................ 67

4.10...... Chapter 10:
Information society and media.................................................................... 69

4.11...... Chapter 11:
Agriculture and rural development.............................................................. 70

4.12...... Chapter 12:
Food safety, veterinary and phytosanitary policy......................................... 72

4.13...... Chapter 13:
Fisheries.................................................................................................... 74

4.14...... Chapter 14:
Transport policy........................................................................................ 75

4.15...... Chapter 15:
Energy....................................................................................................... 78

4.16...... Chapter 16:
Taxation.................................................................................................... 80

4.17...... Chapter 17:
Economic and Monetary policy.................................................................. 81

4.18...... Chapter 18:
Statistics.................................................................................................... 82

4.19...... Chapter 19:
Social policy and employment.................................................................... 83

4.20...... Chapter 20:
Enterprise and industrial policy................................................................... 86

4.21...... Chapter 21:
Trans European Networks......................................................................... 87

4.22...... Chapter 22:
Regional policy and coordination of structural instruments........................... 88

4.23...... Chapter 23:
Judiciary and fundamental rights................................................................. 89

4.24...... Chapter 24:
Justice, freedom and security...................................................................... 95

4.25...... Chapter 25:
Science and research............................................................................... 103

4.26...... Chapter 26:
Education and culture............................................................................... 105

4.27...... Chapter 27:
Environment............................................................................................ 106

4.28...... Chapter 28:
Consumer and health protection............................................................... 109

4.29...... Chapter 29:
Customs Union........................................................................................ 111

4.30...... Chapter 30:
External relations..................................................................................... 112

4.31...... Chapter 31:
Foreign, Security and Defence Policy....................................................... 113

4.32...... Chapter 32:
Financial control...................................................................................... 115

4.33...... Chapter 33:
Financial and budgetary provisions........................................................... 117

Statistical Annex....................................................................................................................... 118

1. 
Introduction
1.1. 
Preface

Following the conclusions of the Luxembourg European
Council in December 1997, the Commission has reported regularly to the Council
and the Parliament.

This report on progress made by Turkey in preparing for EU
membership largely follows the same structure as in previous years. The report:

– briefly describes the relations between Turkey
and the Union;

– analyses the situation in Turkey in terms of the
political criteria for membership;

– analyses the situation in Turkey on the basis of
the economic criteria for membership;

– reviews Turkey's capacity to assume the
obligations of membership, that is the acquis expressed in the Treaties,
the secondary legislation and the policies of the Union.

This report covers the period from October 2010 to
September 2011. Progress is measured on the basis of decisions taken,
legislation adopted and measures implemented. As a rule, legislation or
measures which are being prepared or awaiting Parliamentary approval have not
been taken into account. This approach ensures equal treatment across all
reports and permits an objective assessment.

The report is based on information gathered and analysed by
the Commission. Many sources have been used, including contributions from the
government of Turkey, the EU Member States, European Parliament reports[1]
and information from various international and non-governmental organisations.

The Commission draws detailed conclusions regarding Turkey
in its separate communication on enlargement[2],
based on the technical analysis contained in this report.

1.2. 
Context

The Helsinki European
Council of December 1999 granted the status of candidate country to Turkey.
Accession negotiations with Turkey were opened in October 2005.

The Association
Agreement between Turkey and the then EEC was signed in 1963 and entered into
force in December 1964. Turkey and the EU formed a customs union in 1995.

1.3. 
Relations between the EU and
Turkey

Accession negotiations with Turkey continued. During the preparatory analytical
phase, the level of preparedness to start negotiations on individual chapters
has been assessed on the basis of screening reports. Out of a total of 33
screening reports, one has still to be delivered to the Council by the Commission,
whilst nine are being discussed in the Council.

So far, negotiations have been opened on 13 chapters
(Science and research, Enterprise and industry, Statistics, Financial control,
Trans-European networks, Consumer and health protection, Intellectual property
law, Company law, Information society and media, Free movement of capital,
Taxation, Environment and Food safety, veterinary and phytosanitary policy),
one of which (Science and research) was provisionally closed. The December 2006
Council decision[3] remains in
force.

The enhanced political dialogue between the EU and
Turkey has continued. A political dialogue meeting was held at political
director level in July 2011. These meetings focused on the main challenges
faced by Turkey in terms of the Copenhagen political criteria and reviewed the
progress made towards fulfilling Accession Partnership priorities. Foreign
policy issues relating to regions of common interest to the EU and Turkey, such
as the Middle East, Western Balkans, Afghanistan/Pakistan and the Southern
Caucasus, were also regularly discussed. Turkey has become more active in its
wider neighbourhood and is a leading regional player. A number of high-level
visits from Turkey to the European institutions took place during the reporting
period.

The EU-Turkey Customs Union continues to boost
bilateral trade between the EU and Turkey, which totalled € 103 billion in
2010. Turkey is the EU's seventh biggest trading partner while the EU is Turkey's
biggest. Almost half of Turkey's total trade is with the EU and almost 80% of
FDI in Turkey comes from the EU. However, Turkey is not implementing the
Customs Union fully and maintains legislation that violates its commitments
under the Customs Union. As a result, several trade issues remain unresolved. A
number of Turkey's commitments on removing technical barriers to trade such as
import licences, restrictions on imports of goods from third countries in free
circulation in the EU, State aid, enforcement of intellectual property rights,
requirements for the registration of new pharmaceutical products and
discriminatory tax treatment remain unfulfilled. Progress can be reported on
Turkey's long-standing ban on imports of live bovine animals, beef meat and
other animal products. The EU urged Turkey to remove all remaining restrictions
on the free movement of goods, including on means of transport regarding
Cyprus, and to implement the Customs Union fully.

The EU is providing guidance to the authorities on reform
priorities under the Accession Partnership adopted in February 2008.
Progress on these reform priorities is encouraged and monitored by the bodies
set up under the Association Agreement. The Association Committee met in March
2011 and the Association Council in April 2011. Eight sectoral sub-committee meetings
have been held since November 2010.

The multilateral economic dialogue between the Commission,
EU Member States and Candidate Countries in the context of the pre-accession
fiscal surveillance continued, including a meeting at Ministerial level in May
in Brussels. These meetings focused on the main challenges posed to Turkey by
the Copenhagen economic criteria.

As regards financial assistance, some € 781.9
million have been earmarked for Turkey from the Instrument for Pre-accession
Assistance (IPA) in 2011. The revised Multiannual Indicative Planning Document
(MIPD) for 2011-2013, was adopted by the Commission in June 2011. The new MIPD
follows asector-based approach and aims to focus assistance on political
priorities better in order to achieve a greater impact. Support is focusing on
institutions directly concerned by political reforms in the judiciary and law
enforcement services, on adoption and implementation of the acquis in
priority areas and on economic, social and rural development. In addition,
Turkey is benefiting from a series of regional and horizontal programmes under
IPA.

Under both the national programme and the Civil Society
Facility, greater EU financial support has been provided to civil society,
in particular to strengthen the capacity of civil society organisations and
encourage a civil society dialogue between Turkey and the EU. Support
has also been given for participation by Turkey in EU programmes and agencies.

Assistance under IPA is
implemented by means of decentralised management, which means that it is
managed by the Turkish authorities as a result of an accreditation process
carried out by the Commission that was completed in 2009 for IPA components
I-IV and in August 2011 for component V. In 2011 implementation got under way
and absorption of funds started to increase. Nevertheless, delays continued to
occur and Turkey needs to strengthen its capacity to deliver results, absorb
funds, develop a project pipeline and implement all IPA components in a timely
manner. The supervision by the National Authorising Officer needs vigorously to
address weaknesses in the system, including monitoring and improving the
quality and efficiency of the project and programme cycles.

Turkey actively
participates in the following EU Programmes and Agencies: Seventh Research
Framework Programme, Customs 2013, Fiscalis 2013, European Environment Agency,
Competitiveness and Innovation Framework Programme (including Entrepreneurship
and Innovation Programme and Information Communication Technologies Policy
Support Programme), Progress, Culture 2007, Lifelong Learning and Youth in
Action. IPA funds are used to meet part of the costs of participation in most
of these programmes.

The Turkish
ratification of the agreement for their participation in the European
Monitoring Centre for Drugs and Drug Addiction remains outstanding.

2. 
Political criteria and enhanced Political
dialogue

This section examines
progress made by Turkey towards meeting the Copenhagen political criteria,
which require stability of institutions guaranteeing democracy, the rule of
law, human rights and respect for and protection of minorities. It also
monitors compliance with international obligations, regional cooperation and
good neighbourly relations with enlargement countries and Member States.

2.1. 
Democracy and the rule of
law

General
elections took place on 12 June 2011 with a high turnout. The electoral process
was free and fair and was generally marked by pluralism and a vibrant civil
society. Voting and counting on election day were mostly calm and
professionally managed (See section on Parliament). Over the reporting
period, concerns were raised regarding freedom of expression, including media
freedom. The prevailing political climate, lacking an adequate dialogue and
spirit of compromise between political parties, strained relations between key
institutions; this atmosphere hampered the continuation of the reform process.
The Sledgehammer trial, the first ever into an alleged coup plan
in Turkey, began in December 2010. Following the seizure of evidence at the
Gölcük navy headquarters a total of 163 military officers (of whom 106
serving), including several former top commanders, were arrested. They were
charged of attempting to overthrow the government through force and violence.
Requests for the release of defendants were refused. According to official
data, the number of defendants has risen to 224, 183 of whom are under arrest.
Restrictions on access to certain evidence referred to in the indictment raised
concerns about the rights of the defence and to a fair trial. The failure to
give detailed grounds for decisions on detention is another source of concern
raised by the defence (See also section on civilian oversight of security
forces).

The trial of the
alleged criminal network Ergenekon continued. The judicial
investigation expanded further and, according to official data, the number of
defendants has risen to 238, 53 of whom are under arrest. The investigation
into alleged media involvement continued with the detention of a number of
journalists, among whom prominent supporters of the investigation into
Ergenekon. In March 2011, copies of an unpublished book written by one of the
arrested journalists were confiscated on the orders of a court for being a "document
of a terror organisation". Confiscation of an unpublished book as evidence
of crime raised concerns about press freedom in Turkey and the legitimacy of
the case (See section on freedom of expression).

A linkage was made by
the judiciary between the Ergenekon case and the murder of three Protestants in
Malatya in April 2007. Several people, including the former commander of the
gendarmerie in Malatya, were detained in March 2011. This was followed by a
search of the homes and offices of several theology professors known for their
work on missionary activities in Turkey.

The time lag between the arrests and presentation of
indictments, the restricted access by the defence to evidence put forward by
the prosecution and the secrecy of investigation orders fuelled concerns about
effective judicial guarantees for all suspects. The same applies to the
extensive application of arrest-related articles of the Code on Criminal
Procedures, which at certain instances can have the same effect as punitive
measures. The length of pre-trial detention is a cause for concern (See
section on the judicial system).

The three specially
authorised prosecutors in the Ergenekon case were reassigned to other duties by
the High Council of Judges and Prosecutors (HSYK) in March 2011. The Deputy
Director of Intelligence for Istanbul in charge of the Ergenekon enquiry was
also moved to a new post. These measures were viewed as reflecting the judicial
authorities' and the government's unease with the handling of the
investigation.

Concerns about judicial
procedures were also reported in connection with the KCK[4] case in which around 2,000 politicians, locally
elected representatives and human rights activists in the south-east have been
detained since April 2008. The investigation continues to widen. The main KCK
trial of 152 defendants (104 of whom are under arrest) charged with membership
of an illegal armed organisation started in October 2010. However, the trial
came to a standstill after the court refused to hear the defence in Kurdish.
Frequent use of arrests instead of judicial supervision, limited access to
files, failure to give detailed grounds for detention decisions and revisions
of such decisions highlight the need to bring the Turkish criminal justice
system into line with international standards and to amend the anti-terror
legislation. The detention of elected representatives is a challenge to local
government and hampers dialogue on the Kurdish issue.

Overall, the Ergenekon investigation and the
investigations into other alleged coup plans remain an opportunity for Turkey
to shed light on alleged criminal activities against democracy and to
strengthen confidence in the proper functioning of its democratic institutions
and the rule of law. However, concerns remain over the handling of
investigations, judicial proceedings and the application of criminal procedures
putting at risk the rights of the defence. The lack of any authoritative source
of information on all these issues of wide public interest from either the
prosecution offices or the courts raises similar concerns. All of this raised
concerns in the public about the legitimacy of the cases.

Constitution

After the
constitutional reform package was approved by referendum in September 2010, the
government launched work on implementing it. Priority was given to the reform
of judicial structures, with laws on the High Council of Judges and Prosecutors[5] and on the Constitutional Court adopted in
December 2010 and March 2011, respectively. These laws addressed a number of
priorities of the Accession Partnership and criticisms of the previous system.
The Venice Commission of the Council of Europe had been consulted in the
process.

Since the September
2010 constitutional referendum and the June 2011 elections, consensus has
emerged on the need for a new Constitution to replace completely the
1982 Constitution, which had been adopted following the 1980 military coup. The
governing party has pledged a democratic and participatory process with the
broadest possible consultation. The
Parliament Speaker consulted constitutional lawyers on the process of drafting
and adopting a new constitution; he also authorised the launch of a website to
function as a forum for public contributions and has
started the nomination of three members from each of the four parties present
in Parliament for the ad hoc drafting committee.
Further concrete steps need to guarantee an inclusive process with the involvement of all political
parties and civil society.

However, the adoption
of legislation implementing the September 2010 constitutional amendments was
not accompanied by broad and effective public consultation involving
stakeholders in the country, despite government commitments to this (See
section on the judicial system).

Overall, there has been some progress in implementing the
2010 constitutional reform, notably in the field of the judiciary. A new
Constitution would cement the stability of institutions guaranteeing democracy,
the rule of law, human rights and respect for and protection of minorities and
address long-standing problems, including the Kurdish issue. Both the
government and the opposition are committed to working on a new Constitution
upholding freedoms. Due attention needs to be paid to ensuring the broadest
possible consultation in this work, involving all political parties and civil
society.

Parliament

The Turkish Grand National Assembly (TGNA) convened
for the first time early July 2011 and elected former Deputy Prime Minister Mr
Cemil Çicek as its 25th speaker. He was elected in a third round with 322
votes.

Earlier, on 12 June Parliamentary elections had
taken place, leading to a major renewal of parliament with 349 first-time
MPs (64% of the total). The
incumbent AKP remained the leading party with popular support running at 49.1%,
ahead of the CHP on 25.9% and the MHP with 13%. The BDP-backed independent
candidates received 6.7% of the votes. The AKP secured 326 parliamentary seats,
four short of the three-fifths majority needed to put constitutional amendments
to a referendum without the support of other parties. The CHP won 135 seats,
the MHP 53 and the BDP 36. The number of female parliamentarians increased from
48 to 78. The highest number of female members of parliament is amongst the AKP
(45), followed by the CHP (19), BDP-led bloc (11), and the MHP (3).

The elections took place in a generally peaceful
atmosphere. For the first time,
political parties and candidates were able to purchase broadcasting time for
political advertisements. In March
2011 the Supreme Election Board (YSK) ruled that, while political parties and
candidates will principally use Turkish in their advertising, use of other
languages, including Kurdish, is possible[6]. Various parties tried to target Kurdish voters
by running election campaign advertisements on TRT 6, the first national
Kurdish language TV station. Their requests to do so were rejected by YSK.

On the one hand, international observers (the OSCE Office
for Democratic Institutions and Human Rights (ODIHR)) praised the electoral
process as democratic, pluralistic and shaped by a vibrant civil society, on
the other they also criticised worrying developments concerning fundamental
freedoms, in particular freedom of expression.

However, the campaign was marred by some tension and
violence. A terrorist attack killed a policeman escorting governing party
officials following a rally in May 2011. Violent incidents causing damage to
offices of political parties were also reported across Turkey.

No changes were made to the electoral system. The 10% of
the national vote required for representation in parliament, which is the
highest threshold in any Council of Europe member state, remains, despite calls
by political parties and civil society organisations for it to be lowered. This
issue featured prominently during the election campaign.

As regards the
functioning of parliament, the TGNA enacted a large number of laws in its
final legislative year before going into recess in early April 2011. Several of
them covered areas related to the Copenhagen political criteria. These included
the implementing legislation adopted following the 2010 constitutional
amendments, legislation restructuring the high courts with the objective to
decreasing the backlog of cases and the Law on the Turkish Court of Accounts
(TCA).

The Law on the TCA was adopted in December 2010. It
authorises the Court to audit public expenditure on behalf of parliament, thus
strengthening parliamentary oversight. The TGNA's Strategic Development Plan for 2010-2014
addresses key organisational and management issues.

However, the polarisation of the government and opposition
hampered work on political reforms, notably in parliament, and was not conducive to holding the executive
to account on policy matters. The capacity of parliament to monitor performance and
conduct external audits is still insufficient. Closer interactive dialogue and
cooperation between parliament and the TCA is needed. There was no progress on
improving parliament's rules of procedure. Since 2009 a draft has been pending.

No progress was made on
aligning legislation on the procedures and grounds for closing political
parties with European standards either. In December 2010, the European Court for Human Rights
(ECtHR) found that Turkey had violated the right to freedom of assembly and
association[7] in the 2003 ban of the People's Democracy Party
(HADEP). This was the ninth judgment against Turkey for banning a political
party.

There are concerns about the wide scope of parliamentary
immunities, notably from arrest in cases concerning corruption, and also over the
selective and restrictive interpretation of the law in cases concerning freedom
of expression of members of parliament. The nomination by opposition parties of
suspects being tried in the ongoing Ergenekon, Sledgehammer and KCK cases for
election to parliament posed a new challenge to the interpretation of Article
14 of the Constitution, which restricts immunities when crimes against the 'integrity
of the State' are concerned. This has been invoked against MPs of Kurdish
origin in the past.

When the courts refused to release 8 MPs-elect from prison,
and the YSK decided to strip one MP-elect of his status, the CHP and BDP
MPs-elect refused to take their oath at the constituting session of Parliament.
In July, though, the CHP MPs took their oath and in the beginning of October
the BDP MPs-elect did so as well. General concerns about long pre-trial
detentions and the restrictive interpretation of anti-terror-legislation are
thus also highlighted by the number of MPs-elect in prison. The proposal by the
main opposition party for a code of ethics for parliamentarians was not
followed up. Two former MPs from the closed-down DTP had their ban from
political office overturned, but were not reinstated in parliament.

Overall, elections were held in line with international
standards. The electorate returned a parliament with 349 first-time
MPs (64% of the total). Women and minorities, including non-Muslims
and the disabled, were underrepresented. Laws concerning financing of political
parties and election campaigns, closure of political parties and parliamentary
immunities have yet to be aligned with European standards. Further efforts are
needed to strengthen parliament's capacity to perform its functions of
law-making and oversight over the executive.

President

The President continues
to maintain his conciliatory role in the face of the polarisation prevailing in
the country.

He addressed a number
of key issues affecting Turkey, with constructive statements and interventions.
In December 2010, he paid a visit to Diyarbakir, becoming the first President
to visit the BDP-run municipality in ten years. Amid demands for democratic
autonomy and bilingualism, he reiterated his commitment to addressing the
Kurdish issue. In January 2011, the President instructed the State Supervisory
Council (SSC) to conduct a thorough inquiry into the Hrant Dink murder case,
acknowledging embarrassment at Turkey's failure to conclude the judicial
process in line with a ruling by the ECtHR back in December 2010. On several
occasions, he criticised long detention periods in the ongoing alleged coup
trials as constituting de facto punishment.

The President continued
to play an active role in foreign policy.

There is still
ambiguity around the term of office of the President, which may run until 2012
or 2014, depending on how the YSK interprets the October 2007 constitutional
amendment, which introduced direct presidential elections for a period of five
years.

Government

Three months before the June elections the Prime
Minister announced a substantial restructuring of the Turkish administration,
targeting primarily the ministerial level.

After the elections,
the 61st cabinet of the Turkish Republic was approved by the President on 6
June 2011.

The government decided
to establish a Ministry of EU Affairs and appointed an EU Minister for the
first time. The new structure assigns responsibility for the accession
negotiations to the EU Minister as Chief Negotiator and Head of the Negotiation
Delegation.

As regards the
functioning of government and local government, the government started
implementing its action plan to apply the 2010 constitutional amendments. It
submitted draft legislation to parliament on the Turkish Court of Accounts
(TCA), the Supreme Board of Radio and Television, military service, the High
Council of Judges and Prosecutors and on the restructuring of the Court of
Cassation, Council of State and Constitutional Court.

The government reaffirmed its commitment to EU accession on
several occasions and, in particular, through the establishment of an EU
Ministry after the June elections. The EU Minister and Chief Negotiator
continued his efforts to further streamline inter-ministerial work for the
accession negotiations and to involve civil society in the process. The Reform
Monitoring Group continued to meet. Progress was achieved at provincial level
on coordination and dissemination of EU-related information and work, following
the designation, in 2010, of a deputy governor in each province responsible for
EU affairs.

However, the follow-up
to the 2008 National Programme for the Adoption of the Acquis (NPAA) and
of the 2010-2011 Action Plan outlining legislation to be enacted needs to be
improved.

No progress has been
made on devolution of powers to local government, in particular with
transferring financial resources to local administrations. Municipalities are
thus heavily dependent on centrally allocated revenue. No steps have been taken
to implement the 2007[8] Recommendations of the Council of Europe
Congress of Local and Regional Authorities to use languages other than Turkish
in public services or to reform the Municipality Law to allow mayors and
municipal councils to take 'political' decisions without fear of judicial
proceedings being launched against them. The continuing detention of several
elected mayors and local representatives in the south-east in connection with
the KCK case poses a challenge for local government (See situation in the
east and south-east).

Overall,
the government gave priority to implementing the 2010 amendments to the
Constitution. Progress was made prior to the elections, notably in the field of
the judiciary. Work on a new Constitution would further advance the reform
agenda, including on devolving adequate powers to local government. However,
the declared commitment to EU accession was not sufficiently reflected in the
implementation of the national programmes.

Public
administration

The 2010 amendments to
the Constitution introduced access to information as a constitutional right. In
line with the new constitutional provisions which pave the way for an Ombudsman
institution, a draft law was submitted to parliament in January 2011. The
government consulted, and developed a good working relationship with, the
European Ombudsman.

The revised Law on the
Turkish Court of Accounts (TCA) marks progress on implementing the Public
Financial Management and Control Law, by granting the TCA an external audit
mandate over most public expenditure. In order to raise awareness on
accountability and enhance transparency, these reports are to be public and
easily available, with minimum exceptions on grounds of 'national security'.

Progress has been
reported in the preparations for strategic plans by public institutions, with
almost all institutions adopting such plans that have subsequently been
reviewed by the State Planning Organisation.

In February 2011,
amendments to the Civil Service Law introduced benefits for temporary and
contractual public servants who are disabled, pregnant or parents of newborn
babies.

Work on providing basic
public services on-line (e-government) continued, with a view to increasing
transparency and accountability. Regulatory impact assessments (RIAs) and
application of RIA guidelines enhanced the quality of regulations on several
projects.

However, the
comprehensive civil service reform required to modernise human resources
management has yet to materialise. Such a reform would ensure transparency and
merit-based advancement and appointments, in particular to high-level
positions. Red tape has not been reduced.

A government request
for parliamentary authorisation to rule by decree-law on a number of specific
issues for a period of six months was granted amid strong criticism by the
opposition in April 2011. The declared aim was to facilitate restructuring of
the central administration, by establishing, merging or closing ministries. One
of the main changes is the introduction of an additional level between the
Minister and the undersecretary of "deputy minister" in 20 of the
ministries. These posts can be given to officials from outside the parliament,
including representatives of the private sector. The parliamentary authorisation also empowered the government to amend the
Civil Service Law in order to
regulate the principles and procedures for the appointment, promotion, transfer
or compulsory retirement of officials, workers and contract personnel employed
in public institutions.

The Law establishing
the Ombudsman has yet to be adopted. A draft has already been submitted to
parliament. It provides for a Head Ombudsman to be elected by parliament. There
could be up to four rounds of voting; in the fourth, the Head Ombudsman is
elected by simple majority. As the Ombudsman does not issue binding decisions,
he or she must be held in high regard by the people and be perceived as
non-partisan, fair, impartial and reasonable. In this regard, EU Member States'
practice requires consensus and, thus, involves high parliamentary majorities
for election of the Ombudsman. The draft also provides that transactions by the
army of a military nature do not fall under the powers of the Ombudsman. The
practice in most EU Member States is that an Ombudsman oversees the military in
one way or another. Other provisions of the draft would empower the Ombudsman
to respond to individual complaints and recommend improvements in the way the
public administration works. There are no provisions allowing the Ombudsman to
conduct inquiries on his or her own initiative. Finally, the draft grants
Turkish citizens up to 90 days to submit complaints to the Ombudsman. This is
short compared with practice at EU level.

Further efforts are
needed to build capacity to implement the revised Law on the TCA and to carry
out the full range of government auditing so that the TCA can fulfil its role
of ensuring accountability in the public administration. Efforts are also
required to implement the Public Financial Management and Control Law,
particularly on strengthening internal audit capacity and the strategy
development units and implementing strategy documents.

A decree adopted in
August 2011 authorises relevant ministers to monitor and inspect all kinds of
activities and transactions of independent regulatory authorities established
in recent years in line with obligations stemming from the acquis or
international standards. This raises concerns as to the independence of the
regulatory authorities when carrying out their duties in a number of policy
areas such as competition, energy and information society.

No progress can be
reported on the decentralisation process. Devolution of powers, in particular
transfer of financial revenues to local administrations has not materialised.

Overall, there has been some progress in legislative
reforms with regard to the public administration and civil service. Attention
needs to be paid to establishment of the Ombudsman institution. Greater
political support for public administrative reform and decentralisation is
necessary.

Civilian oversight of security forces

In October 2010, the
National Security Council approved a revised National Security Policy. This
document is not public. It was reportedly prepared mainly by the civilian
authorities.

The investigation into
the "Sledgehammer" alleged coup case was extended with the arrest of
further officers, mostly from the Air Force. Hearings of the case continued
before the 10th Istanbul Serious Crimes Court in Silivri. (see section 2.1
Democracy and the Rule of Law) The trial of seven suspects, including a
former Kayseri Gendarmerie Brigade Commander and a former Mayor of Cizre, who
are charged with twenty murders in the Southeast, is continuing. On the
initiative of NGOs and in response to requests from the families of missing
persons, excavations of mass graves have started. Calls for a "truth
commission" have been rejected. Further to the 2010 constitutional
amendments, decisions by the Supreme Military Council concerning dismissals of
military personnel have been opened to civilian judicial review. Military
officers dismissed from the army now have the right to appeal against their
dismissals and retire with benefits or to obtain employment at a state
institution. A commission has been set up within the Ministry of Defence to
examine applications and decide within a year. Following a decision by the
Military Court of Cassation the Şemdinli case[9]is now tried by the Van Serious Crimes Court, a
civil court. During the first
hearing in July the court accepted a lawyers' request to investigate four
high-ranking officers, including a former Chief of Staff.

As regards civilian
oversight of military expenditure, good progress was made, in the form of
adoption of the Law on the Court of Accounts in December 2010. This provides
for external ex-post audits of armed forces' expenditure. It also
paves the way for audits of extra-budgetary resources earmarked for the defence
sector, including the Defence Industry Support Fund.

The Under-Secretariat
for Public Order and Security, established in 2010 to develop and coordinate
counter-terrorism policies, and affiliated to the prime Ministry since July
2011, came into operation and served as Secretariat for the Counter-Terrorism
Coordination Board. The Board convened for the second time in February 2011.

The number of incidents
where the armed forces exerted formal and informal influence over political
issues beyond their remit continued to decrease.

On the eve of the
Supreme Military Council of August 2011, the Chief of Staff, along with the
Force Commanders, requested their retirement. Appointment of the force
commanders in the Supreme Military Council meeting without any delay affirmed
the government's control over the appointment of top-level commanders. However,
promotions continue to be determined by the General Staff with limited civilian
control. Further reforms on the composition and powers of the Supreme Military
Council, particularly on the legal basis of promotions, still need to
materialise.

For the first time,
President Gül briefed the Speaker of Parliament and the leader of the main
opposition party about the content of the National Security Council after the
meeting in August.

However, on some
occasions, the armed forces made comments about ongoing court cases and
investigations. Civilian oversight needs to be further reinforced, particularly
in relation to the law enforcement duties of the gendarmerie and to the
military justice system. The gendarmerie does not report to the Ministry of the
Interior and disciplinary offences are taken to the General Staff, bypassing
both the Ministries of the Interior and Defence. The Law on the provincial
administrations, which provided the legal basis for the annulled EMASYA
Protocol allowing military operations to be carried out without the consent of
local civilian authorities, has yet to be amended. There is a lack of
transparency and accountability in institutions in the security sector,
particularly those with intelligence duties.

The existing
legislation, including the Law on the establishment and proceedings of military
courts defining the functions and jurisdiction of these courts has yet to be
amended in order to turn the new constitutional provisions into legal reality.
These new constitutional provisions include matters related to the jurisdiction
of military courts, the trial of the Chief of Staff and the commanders of the armed
forces by the Constitutional Court for offences related to their duties and the
trial by civilian courts of offences against the security of the State.
Finally, the lack of judicial review of all decisions regarding career
management by the Supreme Military Council and all other military authorities,
remains a concern.

The exclusion of the
Foundation for Strengthening the Armed Forces, which controls significant
financial expenditure , from the audit mandate of the TCA is a major
shortcoming of the revised Law on the TCA. Publication of the external audit
reports on defence, security and intelligence institutions will be governed by
a regulation yet to be adopted by the Council of Ministers.

No change was made to
the Internal Service Law of the Turkish armed forces, which defines the duties
of the military and contains an article leaving the military significant scope
for intervention in politics. The Law on the National Security Council was not
amended and continues to provide a broad definition of security which,
depending on interpretation, could cover almost any policy field. The Chief of
Staff continues to report to the Prime Minister rather than the Minister of
Defence.

The selective
accreditation by the military of certain media has continued. The secondary
school curriculum continues to include a national security course given by
military officers.

Overall, good progress has been made on consolidating
the principle of civilian oversight of security forces. The Supreme Military
Council of August 2011 was a step towards greater civilian oversight of the
armed forces. Civilian oversight of military expenditure was tightened and a
revised National Security Plan adopted. In addition, Supreme Military Council
decisions were opened to civilian judicial review. However, further reforms -
on the composition of the Supreme Military Council, military justice system and
the Personnel Law of the Turkish Armed Forces – are still needed. In several
instances, legislation intended to increase civilian oversight of the military
(the Court of Accounts Law and the draft Ombudsman Law) was amended in
parliament, weakening such oversight. On some occasions, the General Staff made
comments on ongoing court cases.

Judicial system (see also Chapter 23 – Judiciary and fundamental
rights)

There has been progress
in the reform of the judiciary, notably with implementing the 2010
constitutional amendments.

As regards the independence
of the judiciary, a Law on the High Council of Judges and Prosecutors was
adopted in December 2010. The government consulted the Venice Commission of the
Council of Europe. This law, together with the constitutional amendments
approved by referendum in September 2010, established a new composition of the
High Council[10] that is more pluralistic and representative of
the judiciary as a whole. Sixteen of its judicial full members (out of
twenty-two) and all twelve substitutes are now elected directly by judicial
bodies.

Ministerial influence
has been reduced: the Minister of Justice remains President of the High Council
and the Undersecretary remains an ex officio member, but as a result of
the enlargement of the Council, the Ministry now accounts for less than 10% of
the total membership. The Minister of Justice does not sit in any of the three
chambers where work is conducted, nor does he participate in plenary meetings
on disciplinary matters. The Minister and the Undersecretary no longer have the
possibility to obstruct the decision-making process of the High Council by
their mere absence. Previously, they had an 'empty chair' blocking power that
they actually used.

The Inspection Board,
previously under the Ministry of Justice, has now been transferred to the High
Council. Anonymised versions of decisions can be published on the High Council's
official website. This promotes legal certainty and confidence in the proper
administration of justice. As regards effective remedies, appeals to judicial
bodies against decisions concerning dismissal from the profession are now
permitted. The newly elected High Council held meetings in provinces with
judges and prosecutors to collect information and discuss reform proposals.

Ten full and six
substitute members of the High Council were elected by first-instance judges
and prosecutors in October 2010. More than 98% of the first-instance judges and
prosecutors voted. Participation as candidates was open to all judges and
prosecutors, including those working at the Ministry of Justice. The vote was
secret and campaigning prohibited. An appeal to the Supreme Election Board
(YSK) alleging unfair elections and undue influence by the Ministry of Justice
was rejected unanimously. The High Council started to function with its 22 full
members in November as a public legal entity with administrative and financial
autonomy from the Ministry of Justice.

However, in elections
of members of the High Council, every judge and prosecutor has the right to
cast as many votes as the number of full and substitute Council members to be
elected. In this system imposed by the Constitutional Court, candidates who are
voted by the majority could take all the seats, thus excluding those supported
by voters from a minority. Nomination of the four non-judicial members of the
High Council is left to the discretion of the President of the Republic, whereas
the National Assembly is not involved. The current provisions do not ensure
permanent representation of members of the Bar in the High Council.

The Minister can veto
the launching of disciplinary investigations against judges and prosecutors by
the High Council. The judicial review does not cover all first-instance
decisions of the High Council, potentially affecting judicial independence or
impartiality (e.g. decisions concerning promotions, transfers to another
location and disciplinary sanctions). Rules on dismissal of judges and
prosecutors from the profession lack clarity and precision. Assessment of the
professional performance of judges and prosecutors is over-centralised.
Assessment criteria applied by the inspectors need to guarantee judicial independence
in practice[11].

In the polarised
atmosphere that followed the adoption of the constitutional amendments and
relevant legislation by parliament, the presidents and members of the high
courts voiced criticism of the judicial reforms. Independent associations of
judges and prosecutors expressed concern about the reforms, notably with regard
to the independence of the judiciary. Some Bar Associations also expressed
concern.

The Semdinli case is
still pending (See the chapter on the civilian oversight of the security
forces). In April, the current High Council reinstated the civilian
prosecutor, previously in charge of the case, into the profession. The
dismissal of this prosecutor in 2006 had raised questions about the
independence of the judiciary[12].

With regard to
impartiality, a Law on the Constitutional Court was adopted in March 2011.
The government consulted the Venice Commission of the Council of Europe. This
law, together with the constitutional amendments approved by referendum on 12
September 2010, enlarged the normal membership of the Court. This has reduced
the relative weight of high courts' representatives and made the Constitutional
Court more representative of the legal community and society at large. Under
the old system all members of the Constitutional Court were ultimately selected
and appointed by the President of the Republic. Now three members (i.e.
approximately 18% of the membership) are elected by the Turkish Grand National
Assembly.

The powers of the
Constitutional Court have been extended by introducing the individual
application procedure. Anyone who claims that any of his or her fundamental
rights and freedoms guaranteed by the Constitution has been violated by the
public authorities can apply to the Constitutional Court, provided he or she
has exhausted all ordinary legal remedies. Such individual applications
reinforce the right of each individual to be heard by an independent and
impartial tribunal enshrined in the Turkish Constitution.

However, there is
currently a strict representation ratio for various bodies in the
membership of the Court. As a consequence, the Constitutional Court is
insufficiently representative of the Turkish legal community as a whole and
still over-dominated by the high courts. The influence of the Grand National
Assembly over the composition of the Constitutional Court is also inadequate,
in terms of both the number of members it elects and the choice of eligible
candidates. The current election process in the Assembly[13] does not fully guarantee the Court's political
impartiality. At the same time, the President of the Republic plays an
over-dominant role in the appointment process.

Judges and prosecutors
or members of a body nominating candidates for members of the Constitutional
Court can cast as many votes as the number of candidates for full and
substitute members to be elected. In this system imposed by a decision of the
Constitutional Court itself, candidates who are voted by the majority could
take all the seats, thus excluding those supported by voters from a minority.
The process of selecting the Bar candidates does not ensure that the list of
candidates is adequately representative of the overall membership of the
Turkish Bars, while at the same time not completely dominated by the large
metropolitan Bars. Finally, the presence of two military members of the
Constitutional Court is questionable, as constitutional jurisprudence in a
democratic system is a civilian matter.

Practical arrangements
at courthouses and during trials regarding judges, prosecutors and the defence
do not guarantee that the principle of equality of arms is respected or is
perceived to be. This continues to cloud the perception of the impartiality of
judges.

Senior members of the
judiciary and military made statements that could put the impartiality of the
judiciary at risk in key cases.

With regard to the efficiency
of the judiciary, the Laws on the Court of Cassation and the Council of State
were amended in order to tackle their large and increasing backlog of cases. More chambers have been established, working
methods modified and a large number of judges and prosecutors appointed. The appointment procedure conducted by the High
Council was transparent: the number of votes received by each judge and the
procedure followed during the appointment process were published on the website
of the High Council.

Legislation was adopted
in March 2011 to reduce the workload of first-instance courts. The main aim is
to prevent cases from entering the court system, among other things by decriminalising
some offences which are now sanctioned by administrative fines and also by
introducing legal fees for applicants to Regional Courts of Appeal and to the
Court of Cassation and transferring powers to issue certificates of inheritance
from courts to public notaries.

The 2011 budget for the
judiciary increased to approximately TL 6,1 billion (1.81% of the state budget)
from TL 4,7 billion in 2010 (0.55% of GDP).

However, neither an
overall common strategic framework nor reliable indicators and benchmarks have
been established by the Ministry of Justice and the High Council for Judges and
Prosecutors to assess the performance of courts and of the judicial system as a
whole. Such a framework, indicators and benchmarks would allow the authorities responsible
to assess the human and material resources needed to address the backlog of old
cases and the influx of new ones and would provide the basis for optimum
allocation of resources and rationalisation of the court network.

The current
fragmentation of the Turkish courts, which each have a separate registry and
which are not connected with each other even when they are located in the same
courthouse, prevents efficient use of the available resources. The regional
courts of appeal have not been established yet. By law, they should have been
in operation by June 2007. The number of vacancies for judges and prosecutors
equals roughly a third of the current judicial staff.

The Ministry and the
High Council have yet to develop benchmarks to monitor and assess the duration
of court proceedings and improve the efficiency and effectiveness of the
judicial system. The backlog of pending cases at the Turkish courts is
increasing and Turkey has a large backlog of pending serious criminal cases. In
particular, and as regards first instance courts, there were approximately 1.4
million pending criminal cases at the end of 2010, up from 1.2 million at the
end of 2009. Similarly, the pending civil cases were 1.1 million at the end of
2010, up from 1 million at the end of 2009, while those at administrative
courts reached 200,000 at the end of 2010, an increase of 40,000 as compared to
those at the end of 2009.

Special attention needs
to be paid to the duration of cases involving pre-trial detention, by giving
them priority and ensuring that the duration of the trial is kept to the
minimum compatible with the quality of the judicial process and respect of the
rights of the defendant. Arrest-related articles of the Code on Criminal
Procedures (CPC) have been used, often extensively, in a way that might have
the same effect as punitive measures, whereas alternatives to arrest or
detention are under-used. A 2005 amendment to the CPC limiting the detention
period entered into force at the end of 2010, resulting in the release of a
number of prisoners.

Pre-trial detention is
not limited to circumstances where it is strictly necessary in the public
interest. In some terror-related cases, defendants and their lawyers have not
been permitted access to incriminating evidence early in the proceedings[14]. Frequent use of arrest instead of judicial
supervision, leaks of information, evidence or statements, limited access to
files, failure to give detailed grounds for detention decisions and revision of
such decisions raised concerns. Finally, no authoritative information has been
made available from either the prosecution offices or the courts on all these
issues of wide public interest. Despite preparatory work conducted by both the
High Council and the Justice Academy, spokespersons at prosecution offices or
at courts are not yet operational.

There is a need to
improve the work of the police and the gendarmerie together with the working
relationship between the police, gendarmerie and judiciary in order to address
concerns raised during investigations in some high-profile cases. A Regulation
on the judicial police, as provided for under Article 167 of the CPC, was
adopted in 2005. It came into force on 1 June 2005 together with the CPC but
has yet to be implemented. Hence, judicial police units attached to prosecution
offices have yet to be established. As a result, prosecutors currently rely on
judicial police units operating under the hierarchical control of the Ministry
of the Interior.

Mediation is not
effectively implemented and judges, prosecutors and lawyers are not trained for
the task. The court experts' system does not provide for official lists of
experts and fees. Nor does it set deadlines for submitting experts' opinions or
make court experts subject to cross-examination. The process of transferring
forensic medical examinations to State hospitals or health centres has been
slow and has yet to be completed. The backlog of the Forensic Medicine
Institute leads to delays in judicial proceedings. Cross-examination in
criminal trials is not fully implemented.

A large number of
measures in the judicial reform strategy adopted by the government in
August 2009 have been implemented by the constitutional amendments and ensuing
legislation. There is a need to review the existing strategy in a transparent and inclusive fashion, so that the revised strategy will be owned by the Turkish
legal community and the wider public.

Overall, progress has been made in the area of the
judiciary. The adoption of legislation on the High Council of Judges and
Prosecutors and on the Constitutional Court marks progress in the independence
and impartiality of the judiciary. Steps have also been taken to improve the
efficiency of the judiciary and address the increasing backlog of the courts.
However, further steps are needed on the independence, impartiality and
efficiency of the judiciary, including the criminal justice system and the
large backlog of pending serious criminal cases. The Minister can veto the
launching of disciplinary investigations concerning judges and prosecutors by
the High Council. Judicial proceedings need to be made transparent and courts
and prosecution offices need to inform stakeholders and the public at large on
issues of public interest. The upcoming review of the judicial reform strategy
needs to be carried out with the participation of all stakeholders, the Turkish
legal community and civil society.

Anti-corruption
policy (see also Chapter 23 – Judiciary and fundamental rights)

In line with the
2010-2014 Strategy and Action Plan[15], an Executive Committee for Increasing
Transparency and Fighting Corruption[16] has coordinated working groups preparing
proposals on 28 corruption-related issues. The Committee of Ministers on
anti-corruption policy approved all the proposals. However, there was no
increase in the strength or independence of institutions involved in the fight
against corruption, which are not sufficiently staffed. Participation by civil
society, particularly in the Executive Committee and in implementing the
strategy, needs to be strengthened.

Turkey has implemented 19 of the 21 recommendations made in
the 2005 first and second evaluation reports by the Group of States against
Corruption (GRECO). There has been no progress in limiting the immunities of
Members of Parliament or of senior public officials in corruption-related cases
and establishing objective criteria setting the conditions under which their
immunity could be lifted. Two major sets of GRECO recommendations on "Incrimination"
and "Transparency of Party Funding" remain to be implemented after
the third evaluation round adopted in March 2010.

Legislation on political parties imposes some restrictions
on the amount and nature of donations parties may receive. However, there has been no progress concerning the
transparency of financing political parties. Auditing of political parties
remains weak and there is no legal framework for auditing election campaigns or
the financing of individual candidates. There is no limit on general party and
campaign-related spending. In particular, the legislation contains no specific
provisions on campaign financing. Parties declare their campaign-related income
and expenditure in their general financial statements as part of their annual
report to the Constitutional Court. The Constitutional Court itself focuses
primarily on compliance with reporting requirements and with parties' internal
regulations. It does not verify the data and source documents submitted or
review them for undisclosed income and expenditure.

5928 civil servants working for central and local
government received training on ethics between October 2010 and July 2011.
However, no progress has been made on extending codes of ethics to academics,
military personnel or the judiciary.

The Law on the Turkish
Court of Accounts (TCA) adopted in December 2010 should significantly
strengthen the transparency and accountability of public administration.
However, the exclusion of the Foundation for Strengthening the Armed Forces
from the audit mandate of the TCA is a major shortcoming of the revised Law on
the TCA (See section on civilian oversight of security forces). There is
no administrative act to freeze suspicious assets. No steps have been taken to
build up a track record of investigations, indictments or convictions related
to corruption cases.

As regards the investigation
into the charity Deniz Feneri concerning a fraud case in Germany which started
in 2009, the former head of the Radio and Television Supreme Council (RTÜK)
and four senior executives of the television network Kanal 7 were detained. No
indictment has been submitted to the courts yet. Changes to the prosecutorial
team investigating the case raised concerns.

Overall, limited progress has been made on implementing
the strategy and the action plan to combat corruption. Effective implementation
of the strategy is necessary to reduce corruption which remains prevalent in
many areas. The lack of transparency relating to political party financing and
the scope of immunities remain major shortcomings. Greater political support
for strengthening the legislative framework to fight corruption and the
measures taken to implement it is needed. Turkey needs to build up a track
record of investigations, indictments and convictions.

2.2. 
Human rights and the
protection of minorities (see also chapter 23 - Judiciary & fundamental rights)

Observance of
international human rights law

As for ratification of
international human rights instruments, parliament passed
legislation to ratify the Council of Europe Convention on the Protection of Children
against Sexual Exploitation and Sexual Abuse in November 2010. Turkey ratified
the Optional Protocol to the UN Convention against Torture (OPCAT) in September
2011. Ratification of three additional Protocols to the European Convention on
Human Rights (ECHR)[17] is still pending.

During the reporting period, the European Court of Human
Rights (ECtHR) delivered a total of 418 judgments finding that Turkey had
violated rights guaranteed by the ECHR. The number of new applications to the
ECtHR went up for the fifth consecutive year. Since October 2010, a total of
7,764 new applications have been made to the ECtHR. Most of them concern the
right to a fair trial and protection of property rights. In September 2011,
18,432 applications regarding Turkey were pending before the ECtHR. Turkey has
abided by the majority of ECtHR rulings, including payment of compensation
totalling € 24.5 million in 2010. Some rulings have not been followed up
by Turkey for several years[18]. The government's announcement that it would
address these issues was not followed through.

In the Cyprus v. Turkey case, the
issues of missing persons and restrictions on the property rights of Greek
Cypriots displaced or living permanently in the northern part of Cyprus remain
pending. In a number of other cases, including the Xenides-Arestis v. Turkey,
the Demades v. Turkey, the Varnava and Others v. Turkey cases,
Turkey has yet to fully execute the decision, including paying the just
satisfaction awarded by the ECtHR to the applicants. Following the Grand
Chamber Decision of 5 March 2010 on the Demopoulos v. Turkey case,
around 1500 applications from Greek Cypriot owners have been lodged with the
Immovable Property Commission (IPC). So far, overall around 200 cases have been
concluded, mainly by friendly settlements.

Regarding promotion
and enforcement of human rights, the government has submitted draft
legislation on the Ombudsman to parliament (See section on public
administration).

Public officials,
judges, public prosecutors and police officers received training on human
rights. A Department of Human Rights has been established within the Ministry
of Justice to follow up ongoing cases before the ECtHR and the execution of
judgements.

The Human Rights Investigation Committee of parliament
received nearly 1500 petitions since October 2010, most of which concerned
judicial review and problems related to prisons. It adopted 7 reports since
October 2010 and established a sub-committee to probe into the fate of people
allegedly disappeared under detention, mainly in the Southeast of the country
and in the aftermath of the 1980 military coup.

However, human rights
institutions in line with the UN Paris principles, in particular as regards
their independence and functional autonomy, have yet to be established. The
draft Law establishing the Turkish National Human Rights Institution (NHRI)
submitted to parliament in February 2010 does not comply fully with these
principles. It is important that
the provisions on the mandate, core functions, membership, staffing and funding
of the NHRI cannot be amended by implementing legislation, but are set out in
law. The NHRI's accountability to
the Prime Minister and appointment of its members by the Council of Ministers
are not in line with the Paris principles. The funding provisions in the draft
law do not ensure that the budget comes from an autonomous source. Requirements
for pluralism and gender balance are not explicitly included in the rules on
recruitment of staff. The draft law does not specify that there is no
restriction on the powers of the NHRI to examine issues arising from any part
of the State or the private sector. Greater cooperation with, and involvement
of, civil society has yet to be reflected in the draft.

Criminal proceedings were launched against many
human rights defenders, with much use made of terrorism-related articles of
Turkish legislation. The wide definition of terrorism under the Anti-Terror Law
(See the sections on the situation in the south-east and on freedom of
expression) was not revised and remains a cause for serious concern.

Overall,
some progress was made on observance of international human rights law, notably
through the ratification of the OPCAT. However, a number of reforms have been
outstanding for several years. Legislation on human rights institutions needs
to be brought fully into line with UN principles.

Civil and political rights

The government pursued its efforts to ensure compliance
with legal safeguards to prevent torture and ill-treatment and ratified
the OPCAT in September 2011. The latter provides for establishment of a
national mechanism to prevent torture within one year and regular reports on
measures to implement the Protocol (See the section on observance of
international human rights law).

The Council of Europe's
Committee for the Prevention of Torture and Inhuman or Degrading Treatment or
Punishment (CPT) published the report on its fifth periodic visit to Turkey[19]. The CPT noted a downward trend in both the
incidence and severity of ill-treatment by law enforcement officials.

Training courses were given to health personnel, judges and
prosecutors on effective investigation and documentation of torture and
ill-treatment cases with a view to effective implementation of the Istanbul
Protocol on the investigation of torture and ill-treatment in Turkey.

However, law enforcement bodies continued in some cases to
apply disproportionate force. Civil society organisations reported
disproportionate use of firearms by security forces, resulting in deaths. The
CPT's report on its fifth periodic visit to Turkey states that a number of
credible allegations of physical ill-treatment were received, which concerned
mainly excessive use of force during arrest. With regard to the conditions of
immigration detainees, major shortcomings were found in several of the
detention centres visited, including severe overcrowding, dilapidated
conditions, limited access to natural light, poor hygiene and lack of outdoor
exercise.

Law enforcement bodies frequently launched counter-cases
against persons who alleged torture or ill-treatment. Such proceedings may
deter complaints. In many instances such cases launched by security forces are
given priority by the courts.

Under a tripartite protocol which is still in force between
the Ministries of Health, Justice and the Interior, law enforcement officers
are sometimes present during medical examinations on prisoners.

Efforts to fight impunity for human rights
violations have not been sufficient. As noted by the ECtHR, criminal
proceedings have still not been finalised against members of the security
forces who took part in an operation at Diyarbakir prison on 24 September
1996, which led to the death of ten prisoners and injury of six. Consistent lack of thorough independent
investigations into alleged extrajudicial killings by security and law
enforcement officers persists. The case against an Istanbul police officer
regarding the killing of a Nigerian asylum seeker has not advanced. There
is still no independent police complaints mechanism. Administrative investigations into allegations of torture
or ill-treatment continue to be carried out by fellow police officers, putting
at risk the impartiality of the investigation.

Law enforcement
officers found guilty of torture, ill-treatment or fatal shootings received
short or suspended sentences. Prosecutions of allegations of torture are often conducted
under penal code provisions[20] allowing lighter sentences or the possibility
of imposing a suspended sentence.

Cases of ill-treatment,
unexplained deaths, torture and the lack of fair trials within the military
during military service have been reported. In April, the ECtHR found Turkey in
violation of the ECHR with regard to the right to a fair trial in one case
before the supreme military administrative court.[21] Several trials are in progress concerning
allegations of ill-treatment of conscientious objectors in military prisons.

Overall,
there has been little progress in practice, although ratification of the OPCAT
is a significant step. The positive trend on prevention of torture and
ill-treatment continued. However, disproportionate use of force by law
enforcement officials continued to be a concern, particularly outside official
places of detention. Reports of torture or ill-treatment in prisons increased,
especially in south-eastern provinces. There has been no progress on tackling
impunity. There is a significant backlog of judicial proceedings.

Implementation of the prison
reform programme continued.

The case management
model developed by the Ministry of Justice to improve rehabilitation services
is in operation in 4 juvenile prisons.

An amendment to the
Code on Criminal Procedures (CPC) entered into force at the end of 2010,
limiting the period which can be spent in custody before the final sentencing.
This could reduce the prison population.

Architectural changes
to some high-security prisons enabled more communal activities.

In terms of access to
healthcare, a commission has been established by the Ministry of Justice to
improve conditions in prison wards at certain hospitals in line with human and
patient rights. By February 2011 the number of rehabilitation centres for
convicts and detainees had increased to five.

The number of judgments
including probation sentences increased[22].

However, the prison
population continued to increase[23]. This leads to overcrowding, puts pressure on
staff and other resources and limits the possibility of using newly built
prisons to improve conditions for the inmates. One major factor continuing to
contribute to over-population in prisons is the length of time it can take to
complete a trial and impose a sentence in criminal cases. Some 47% of the
prison population has not received a final sentence (See section on the
judiciary).

The prison system does
not have adequate resources, notably with regard to the number of prison staff
and their qualifications, despite the appointment of an additional 4,929 staff
in 2010 and the existence of four training centres.

The number of juvenile
correctional facilities is insufficient, notwithstanding the launch of juvenile
prison-building work by the Ministry of Justice. Children are not fully
separated from adults in all prisons. This is especially the case with girls[24] (See section on children's rights).

The standards for
monitoring national prisons are still not in line with those of the UN. Prison
monitoring boards are not effective and there is not a board for each
individual prison. They have neither the right nor the resources to carry out
unannounced visits. In some provinces provincial human rights boards carry out
random visits, but their reports have not led to changes in practice.

Delays in the work of the Forensic Medicine
Institute can lead to damaging delays in trials of sick prisoners. There are serious problems with transferring
prisoners to hospitals for treatment. Hospitals regularly used by prisons often
have no secure rooms. Complaints were received about medical examinations
conducted in the presence of security staff and of prisoners being handcuffed
during medical consultations in civilian hospitals.

The authorities have
yet to adopt a general statement of principles on restrictions that can be
imposed on prisoners' rights, incorporating the principles of the ECHR.
Newspapers, magazines and books continue to be forbidden in prisons. The
practice adopted in prisons in relation to open and closed visits is a concern.
There are still reports of restrictions on use of the Kurdish language in
prisons, during visits and exchanges of letters. Practice varies between prison
administrations. A complete overhaul of the complaints system in prisons to
make it genuinely available to all prisoners should be carried out, in
accordance with the OPCAT.

The judicial case
focusing on the incidents at Bayrampaşa prison during the "Return to
Life" Operation in 2000, when the police violently ended the hunger strike
of prisoners who had protested against their transfer to F-type prisons and
during which twelve prisoners died, is still pending. In the meantime the ECtHR
admitted a case about this operation.

Overall, the increasing prison population is leading to
serious overcrowding, which is hampering attempts to improve detention
conditions. A complete overhaul of the complaints system in prisons is needed.
Implementation of the OPCAT should help tackle some problems. Close attention
should be paid to making sure that new arrangements for medical services meet
the requirements of the prison environment. An urgent review of the system for
dealing with juveniles is needed to minimise the number in prison and the time
they spend there and make sure that detention conditions meet the needs of
children.

There have been limited
improvements in access to justice. The efforts of Bar associations
improved citizens' awareness of their rights in terms of access to justice.

However, problems
remained in rural areas and for disadvantaged groups. A large proportion of
prison inmates, including women and juveniles, have had only limited access to
legal aid. Prison inmates are not always aware that legal aid is available. In
domestic violence cases, the documentation requested in order to benefit from
legal aid has, in practice, delayed protection of victims.

Financial resources
allocated for legal aid are not adequate. Lawyer's fees are very low and, in
any case, not comparable with the fees paid by defendants in ordinary cases.

Public awareness of
legal aid is limited. The Ministry of Justice, the High Council of Judges and
Prosecutors and the courts do not publish information relating to judicial
proceedings. The courts do not provide parties with forms or models to file
petitions and have no information desks. Defendants continue misguidedly to
believe that requesting a lawyer implies guilt.

Overall, limited progress has been made on access to
justice. The legal aid provided is of inadequate scope and quality. There is no
effective monitoring mechanism that would remedy long-standing problems.

As regards freedom of expression, the media and public continued debating openly
and freely a wide range of topics perceived as sensitive, such as the Kurdish
issue, minority rights, the Armenian issue and the role of the military.
Opposition views are regularly expressed.

Following
the review of the legal framework on freedom of expression by the Ministry of
Justice, a draft law has been submitted to parliament with the aim of changing
a limited number of articles of the Turkish Criminal Code, including
Articles 285 and 288, which are often used to start procedures against
journalists. Few cases have been
initiated on the basis of Article 301 of the Turkish Criminal Code (TCC), after
it was amended in May 2008.

However, the high number of violations of freedom of
expression raises serious concerns. Freedom of the media was restricted in
practice. The imprisonment of
journalists, and the confiscation of an unpublished manuscript in connection
with the Ergenekon investigation, fuelled these concerns. A large number of
journalists remain in detention.

A large number of cases
were launched against writers and journalists writing on the Kurdish issue.
Pressure on newspapers which report on the Kurdish question or publish in
Kurdish has continued. Several left-wing and Kurdish journalists were convicted
of terrorism propaganda (See section on the situation in the south-east).

A large number of
violations of freedom of expression by Turkey were submitted to the ECtHR. In
order to comply with the rulings of the ECtHR, legal amendments need to be
introduced.[25]

Turkey's
criminal legislation remains highly problematic; it is open to disproportionate
use to limit freedom of expression. The Press Law and the Law on the protection
of Atatürk are also used to restrict freedom of expression. A
number of articles of the TCC require revision, such as Article 125 which
criminalises defamation, Articles 214, 215, 216 and 220 on protection of public
order, Article 226 which outlaws publication or broadcasting of obscene
material, Article 285 which protects the confidentiality of investigations,
Article 288 which outlaws attempts to influence the judiciary, Article 314 on
membership of an armed organisation and Article 318 which makes it an offence
to discourage people from performing military service. Restrictions on freedom
of expression stemming from a wide definition of terrorism under the
Anti-Terror Law continue to be a cause for concern. In particular,
Articles 6 and 7 of this law need to be revised.

Another important problem is the lack of proportionality in
the interpretation and application of the existing legal provisions by courts
and prosecutors, which leads to violations of freedom of expression. The role
of prosecutors, including special "press prosecutors", in initiating
criminal proceedings affecting freedom of expression without due restraint is
particularly important and raises concerns. A large number of draft indictments
on grounds of article 301 of the TCC are still submitted by prosecutors to the
Minister of Justice for examination, for most of which permission to prosecute
is denied.

As highlighted in a report of the Council of Europe
published in July 2011, the interpretation of the concept of "incitement
to violence" is not compliant with the case-law of the European Court of
Human Rights. No defences of truth and public interest exist in the Turkish
legal system. Other issues hampering the right to freedom of expression are the
excessive length of criminal proceedings and remands in custody and problems
concerning defendants' access to evidence against them pending trial. All of
this has a chilling effect on freedom of expression in Turkey and has led to
wide self-censorship in Turkish media, as do the recurring court cases launched against the press by
high-level government and State officials and by the military.

A
decision by the Turkish Constitutional Court of 2 May 2011 invalidated Article
26 of the Press Act. Once this decision will have entered into force in July
2012, prosecutors will no longer be bound to certain time restraints if they
want to file a case following a publication in a periodical. Currently, the
maximum period for filing a case is two months after publication for dailies
and four months for weeklies.

The court case on the tax fine imposed in 2009 against the
Dogan Media Group, a well-known critic the government, continued. In general,
numerous and high fines were imposed on the media. The satiric Harakiri
magazine was forced to cease publication after its second issue, following a
fine of TL 150,000 imposed by the Prime Ministerial Board for the Protection of
Children from Harmful Publications. The Board, which reads books at the request
of prosecutors and follows periodicals in Turkey to evaluate them for possible
obscenity, has been heavily criticised as regards its composition and the scope
of its mandate.

In March 2011, a
first-instance court agreed with the Court of Cassation and fined writer Orhan
Pamuk in a civil procedure on the grounds that his 2005 remarks on the killing
of Armenians and Kurds had insulted the plaintiffs as Turkish citizens.

Regarding hate speech, the Council of Europe recommendation
encouraging Turkey and the media to adopt a code of ethics on respect for religious
minorities has not been implemented. There is a need for new legislation which
would allow effective prosecution of incitement to hatred, including by the
media.

The new Law on
the establishment and broadcasting principles of radio and TV stations brings only partial improvement as regards the
interpretation of certain rules on broadcasting bans and sanctions imposed on
broadcasters. The potential fines
have been substantially increased. At
the beginning of 2011, based on the previous law, the Supreme Board of Radio and Television (RTÜK) issued warnings to television stations and
imposed fines on them for failing to respect the privacy of historical
characters[26], discussions on homosexuality[27] or homosexual scenes in films or series[28] (See Chapter 10 – Information society and
media).

There are still frequent website bans of disproportionate
scope and duration. Since May 2009 the Telecommunications Communication
Presidency (TİB) has published no statistics on banned sites. A case has
been brought against the TİB for not supplying statistics on the banned
sites, as this is not in line with the Law on the right to information. Court
cases are also ongoing against the You Tube video-sharing website and other web
portals. The Law on the Internet, which limits freedom of expression and
restricts citizens' right to access to information, needs to be revised. In
April 2011 TİB, basing itself on the Internet Law, sent a letter to
hosting companies asking them to cancel websites which included certain
potentially provocative words. This raised heavy criticism, to which TIB
responded that the list of words was intended to assist hosting companies
identify allegedly illicit web content.

Reacting to strong criticism, the Information and
Communication Technologies Authority (ICTA) amended its February 2011
regulation on the principles and procedures for safe usage of the Internet. The
revised version, which was adopted in August 2011, responds to a number of
concerns, in particular by making the Internet filters explicitly optional.
After a testing phase ending in November 2011 the system will be available to
all users. Implementation in line with European standards will be essential.

Overall,
open debate, including on issues perceived as sensitive, continued. However, in
practice, freedom of expression is undermined by the high number of legal cases
and investigations against journalists, writers, academics and human rights
defenders and undue pressure on the media, which raises serious concerns. The
present legislation does not sufficiently guarantee freedom of expression in
line with the ECHR and ECtHR case law and permits restrictive interpretation by
the judiciary. Frequent website bans are another cause for serious concern.
Turkey's legal and judicial practices, legislation, criminal procedures and
political responses are obstacles to the free exchange of information and
ideas.

As regards freedom of assembly, there
were positive developments. Newroz (New Year) ceremonies in the South
East and 1 May demonstrations took place in a generally peaceful atmosphere.
This was also the case for demonstrations, inter alia against
restrictions on alcohol advertising and consumption, on judicial reform and on
the detention of suspects in the alleged coup trials. Several activities,
including Armenian Genocide Commemoration Day, organised by
intellectuals and civil society representatives to commemorate the 1915 events
also proceeded peacefully.

However, demonstrations in the south-east of the country
and in other provinces related to the Kurdish issue, students' rights, the
activities of the Higher Education Board (YÖK) and trade union rights were
marred by violence, including incidents of excessive force used by the security
forces. Allegations against members of the security forces for use of excessive
force were rarely prosecuted or investigated properly (See section on
impunity).

Turkey still needs to
apply constitutional provisions guaranteeing the right to hold demonstrations.
Many court cases are in progress on charges of opposing the Law on meetings and
demonstrations. This law is currently being revised by the Ministry of the
Interior. Problems persist with implementation of the Law on the duties and
legal powers of the police, especially in the south-east. Civil society organisations
and human rights defenders often face prosecution and legal proceedings on
charges of terrorist propaganda during demonstrations and protest meetings.

Turkey's legislation on freedom of association is
broadly in line with EU standards. However, no moves have been launched to meet
the need for changes to the legal framework, including the Constitution, with
regard to the closure of political parties. There are many instances of
restrictive interpretation of the existing legislation.

The inclusion of civil society organisations (CSOs) in policy processes, while still in a nascent
stage, has advanced. CSOs continued to face closure cases plus disproportionate
administrative checks and fines. Membership in associations continues to
require a Turkish residency permit and foreign CSOs are subject to specific
regulations.

Legislative and bureaucratic obstacles impeding the
financial sustainability of CSOs persist, e.g. with respect to the collection
of domestic and international aid, to obtaining public benefit status for
associations and tax exemptions for foundations, etc. The lack of simplified
rules creates difficulties for small or medium-sized associations.

The judicial
investigation into the Istanbul branch of the Human Rights Association has been
pending for two years. The Labour Court ordered the closure of Yargı Sen
(the trade union of judges and public prosecutors), established in early 2011,
based on the argument that its establishment is contrary to domestic
legislation. However, this legal basis needs to be updated in line with the
2010 constitutional amendments and the international obligations of Turkey. The
trade union appealed to the Court of Cassation.

More restrictive legislation applied to foreign
associations, with the Ministry of the Interior (MoI) having to consult the
Ministry of Foreign Affairs (MFA) to allow the opening of a representation.
Some foreign civil society organisations were rejected by or received no reply
from the MoI without being given specific reasons.

The case against the
party leaders and executive members of the Socialist Democracy Party and the
Social Freedom Platform is pending. Some of them are still detained for alleged
links to the Revolutionary HQ, an illegal organisation.

In December 2010, the ECtHR
found Turkey in violation of the rights to freedom of assembly and association
in connection with the closure of the HADEP party by the Constitutional Court
in March 2003[29].

Overall, as
regards freedom of assembly, there has been progress on the ground. However,
demonstrations in the south-east of the country and in other provinces related
to the Kurdish issue, students' rights, the activities of the higher education
supervisory board (YÖK) and trade union rights were marred by disproportionate
use of force. Legislation on freedom of association is broadly in line with EU
standards. However, disproportionate controls and restrictive interpretation of
the law remain; funding rules for CSOs remain restrictive. There were no
developments as regards amendment of the legislation on the closure of
political parties.

Concerning freedom
of thought, conscience and religion, freedom of
worship continues to be generally respected. Ecumenical Patriarch Bartholomew
celebrated in August, for the second time after almost nine decades, the Divine
Liturgy of the Dormition of Theotokos at the Soumela monastery in the Black Sea
province of Trabzon. In September the second religious service since 1915 was
held at the Armenian Holy Cross church on the Akhdamar island in lake Van. A Protestant
church was officially opened in June in the city of Van in Eastern Turkey. The
Turkish authorities, including a Deputy Prime Minister, held a number of
meetings with the religious leaders of non-Muslim communities, including a
visit to the Ecumenical Patriarchate, the first visit by a high-ranking
official of the Patriarchate since the 1950s.

Following seven workshops held in the context of the 2009 Alevi
opening, a final report was issued in March 2011. The Ministry of National
Education has prepared new religious education textbooks containing information
on the Alevi faith, too. These are to be used as of the 2011-2012 school year.
A small number of municipal councils have recognised de facto Cem houses
as places of worship. The government expropriated Madimak Hotel[30] in Sivas. Alevis have demanded that the hotel
be turned into a museum.

The 2010 ECtHR judgment in the Özbek and others v.
Turkey case about the establishment of the Kurtuluş Protestant Church
Foundation in Ankara (violation of Article 11) was implemented.

Legislation amending the February 2008 Law on foundations
was adopted in August 2011. The
current legal framework broadly provides for the return of properties entered
in the 1936 declarations of the non-Muslim community foundations widening,
thus, the scope of the 2008 Law. (See section on property rights).

However, under Article
24 of the Turkish Constitution and Article 12 of the Basic Law on national
education, religious culture and ethics classes remain compulsory in primary
and secondary schools. A 2007 ECtHR judgment[31] regarding compulsory religious education has
yet to be implemented. Exemptions from attending such
classes are rare and difficult to obtain, particularly if the
identity card of the applicant does not list a religion other than Islam or if
the religion entry on the card is blank. No alternative classes are provided
for students exempted from these classes, and there are reports that students
not attending these classes have been given lower marks.

Non-Muslim communities – as organised structures of
religious groups – still face problems due to their lack of legal personality.
This has implications at least for their property rights, their access to
justice and their ability to raise funds. The 2010 Council of Europe Venice
Commission recommendations[32] in this regard have yet to be implemented.

Restrictions on the training of clergy remain. Turkish
legislation does not provide for private higher religious education for
individual communities and there are no such opportunities in the public
education system. The Halki (Heybeliada) Greek Orthodox seminary is still
closed. The Armenian Patriarchate's proposal to open a university department
for the Armenian language and clergy has been pending for four years now.
Syriacs can provide only informal training, outside any officially established
schools.

The Ecumenical Patriarch is not free to use the
ecclesiastical title 'Ecumenical' on all occasions. The Venice Commission's
2010 conclusion that any interference with this right would constitute a
violation of the autonomy of the Orthodox Church under Article 9 of the ECHR
has yet to be implemented. As regards participation in religious elections held
in the patriarchate, Turkish and foreign nationals should be treated equally in
terms of their ability to exercise their right to freedom of religion by
participating in the life of organised religious communities in accordance with
the ECHR and the case law of the ECtHR.

Personal documents, such as identity cards, include
information on religion, leaving potential for discriminatory practices. There have been reports of harassment by local officials
of persons who converted from Islam to another religion and sought to amend
their ID cards. Some non-Muslims maintained that listing religious affiliation
on their identity cards exposed them to discrimination. The 2010 Sinan
Isik v. Turkey ECtHR judgment, which ruled that indication of religious
affiliation on identity cards is in breach of the Convention, has yet to be
implemented.

Alevi places of worship are not recognised and Alevis often
experience difficulties in opening them. Two refusals by the administration to
approve places of worship were taken to courts, which upheld the decisions. One
case is now pending before the ECtHR, after exhausting all domestic remedies.

Non-Muslim religious communities report frequent
discrimination, administrative uncertainty and numerous obstacles to
establishing or continuing to use places of worship. Implementation of zoning
legislation by local authorities differs from province to province. This
results in often arbitrary refusals to issue construction permits for places of
worship. Since the relevant legislation was amended in 2003[33], there has been no construction or designation
of a plot for a new Protestant church or a Jehovah's Witness Kingdom Hall. In
Mersin a court ordered the closure of a Kingdom Hall that was considered to
have violated the zoning law. The case has been taken to the ECtHR.

Jehovah's witnesses have been refused exemption from
property taxes in Istanbul and Ankara. A number of court cases are pending on
taxation issues. Alevis and non-Muslim religious communities have to pay electricity
and water bills, whereas the State budget covers such expenses for mosques.

Missionaries are widely perceived as a threat to the
integrity of the country and to the Muslim religion. A court in Silivri found two missionaries not
guilty of inciting hatred or insulting Turkishness but guilty of registering
personal data[34]. The court case concerning the killing of three
Protestants in Malatya in April 2007 continued. No clear conclusion has been
reached regarding the killing of Father Santoro, a Catholic priest, in Trabzon
in 2006. As regards the killing of Bishop Padovese in Iskenderun in 2010, the
indictment was finalised in June 2011. The case is continuing.

The May 2010 Prime
Ministerial circular instructing all relevant authorities to pay due attention
to the problems of non-Muslim Turkish citizens has yet to produce tangible
results. Non-Muslim religious communities reported that hate crimes continued.
There have been reports of attacks against churches, synagogues and cemeteries.
Anti-Semitism and hate speech in the media, including in TV series and films,
have not been sanctioned.

ECtHR judgments regarding conscientious objectors
refusing to serve in the military on religious or other grounds have yet to be
implemented. No progress has been made on tackling the issue of repeated
prosecution and conviction or towards introducing a civilian alternative to
military service. Members of the Jehovah's Witness community in particular
faced court cases for conscientious objection. On several occasions public
statements on the right to object led to judicial investigations and
proceedings on the grounds of discouraging the public from fulfilling military
service.

Overall,
there has been limited progress on freedom of thought, conscience and religion. The dialogue with the Alevis and with the non-Muslim
religious communities continued. Members of minority religions continued to be
subject to threats from extremists. A legal framework in line with the ECHR has
yet to be established, so that all non-Muslim religious communities and the
Alevi community can function without undue constraints.

Economic and social
rights (see also Chapter 19
– Social policy and employment)

Limited
progress can be noted on women's rights and gender equality. Efforts
have been made to strike a better balance between professional and private life
for civil servants, notably in the form of introducing parental benefits. The
Parliamentary Committee on Equal Opportunities for Women and Men has issued a
number of reports[35] on women's issues and improved its
institutional capacity, including with the aid of training. Legislation was
adopted in January 2011 (Law on obligations) to address the problem of bullying
at work, followed by a Prime Ministerial circular in March 2011. The female participation
rate in the labour market increased from 26% in 2009 to 27.6% in 2010. The
gender gap in primary education at national level continued to narrow and was
virtually closed. The 2011 elections increased women's participation in
parliament approximately from 9% to 14% of its membership.

The
dialogue with women's NGOs developed since the appointment of the new minister
of family and social policies.

However,
gender equality, combating violence against women, including honour killings,
and early and forced marriages remain major challenges for Turkey. The
constitutional amendment providing for positive discrimination in favour of
women has yet to produce results.

Women's
representation in politics, managerial positions in the public administration,
including education[36], at governor level, in political parties or in
trade unions remains generally limited, even though polls indicate wide public
support for greater participation by women in politics. Research has concluded
that women's low political participation cannot be attributed to voter choice
or women's traditional family roles alone, but also to the insufficient support
given to women in politics.

Women often work in
poor conditions in unregistered and unpaid family work. Funds available to
encourage women to become self-employed have been inadequate. Existing labour
market measures, including training courses, need to be designed with a view to
avoiding gender-based segregation of employment. Discrimination in recruitment
has been reported, while, according to research, unemployment among
white-collar women increased over the last year

The gender gap in
secondary education has widened (See section on children's rights). The
sustainability of girls' attendance at higher levels of education has been a challenge.
Efforts to eliminate gender bias from school textbooks at all levels of
education and training have yet to produce the desired results. Gender
stereotyping has been perpetuated by the media.

There has been evidence that incidents of violence against
women, including killings, are increasing[37]. This has been widely reported and debated. A
number of women have reported that police officers tried to convince them to
return home to their alleged abusers rather than help them receive protection
orders, and that prosecutors and judges were slow to act on requests for
protection orders or requested unnecessary evidence. Use of standard forms by
the police needs to become normal practice in domestic violence cases. Further
awareness-raising and training for members of the judiciary, health staff and,
in particular, law enforcement officers is needed. Family courts have
insufficient capacity and have been unable to assist victims in a number of
cases. Court cases have usually been lengthy and preparation of forensic
reports has caused delays in the judicial process. As regards domestic
violence, the ECtHR judgment in the Opuz v. Turkey case[38] has yet to be implemented.

The Law on municipalities provides for establishing
shelters for women in municipalities with a population of 50,000 or more. This
provision is not being fully implemented and the number of shelters and other
protective and preventive mechanisms falls well short of needs. This puts
victims at risk. There is still no effective oversight of the work of shelters
and of municipalities and no sanctions are laid down for municipalities which
fail to provide shelters. There is no follow-up for women who are discharged
from shelters or similar social services. Local services and support mechanisms
for women who are victims of violence need to be strengthened.

Implementation
of the national action plan on gender equality and violence against women is
suffering from the lack of sufficient human and financial resources.
Implementation of Prime Ministerial circulars also needs to be improved. Action
plans and circulars are not binding and are not applied evenly throughout the
country. Gender issues need to be mainstreamed in law-making and in public
administration.

Several statements by
public figures and judicial decisions have portrayed women as partly
responsible for harassment, rape or violence due to their behaviour or dress.

Independent
women's NGOs have reported that public institutions discriminate in favour of
NGOs promoting conservative values. Like other NGOs, women's NGOs face
financial difficulties.

Overall,
protecting women's rights, promoting gender equality and combating violence
against women remain major challenges. The legal framework guaranteeing women's
rights and gender equality is broadly in place. However, further substantial
efforts are needed to turn the legal framework into political, social and
economic reality. Legislation needs to be implemented consistently across the
country. Honour killings, early and forced marriages and domestic violence
against women remain serious problems. Further training and awareness-raising
on women's rights and gender equality are needed, particularly for the police.

With
respect to children's rights, the proportion of children in pre-school
education increased in 2010-2011 compared to the previous school year. The
number of teachers also increased. The primary school enrolment rates (grades
1-8) increased and the gender gap has virtually closed. In secondary education
(grades 9-12), the enrolment rates increased
for boys from 67.5% to 72.3% and for girls from 62.2 % to 66.1 %, widening thus
slightly the gender gap. Turkey signed the Council of Europe Convention
on the Protection of Children against Sexual Exploitation and Sexual Abuse.

However, school drop-outs
were a concern, especially among seasonal migrant workers' families and Roma
children. There is a need to support and use fully the early warning system for
children at risk of dropping out. Regional disparities remained wide for both
primary and secondary school enrolment. Turkey has adopted legislation on
education of children with special needs; however, there is a need to provide
the resources necessary to implement this legislation fully and establish a
system to oversee this implementation.

The poverty rate among
children is disproportionately high. For those under the age of six, the rate
stood at around 24% of all cases of poverty and at around 49% of all cases of
rural poverty.

There is no effective
mechanism in place to tackle domestic violence against children. Further
awareness-raising is needed on children's rights, including on fighting
violence against children. There
are initiatives regarding children placed in institutions to support de-institutionalisation towards a community
based approach; however, community based care services still remain limited and
needs to be enhanced in terms of coverage and content. Conditions in full-time child-care institutions need to
improve, staff trained and alternative care models promoted.

No measurable progress
has been made yet in the fight against child labour. Field work is in progress
on seasonal agriculture and migrant child labour. Administrative capacity in
this field has been weak and there has been no nationwide monitoring and
inspection system. There is a lack of up-to-date data on the number and
situation of children at work, and there is no integrated system to eradicate
child labour.

As regards juvenile
justice, since the June 2010 amendments to the Anti-Terror Law, the Criminal
Procedure Code and other legal provisions, Turkish legislation provides that
children will not be penalised on charges of committing a terror crime or being
a member of a terror organisation, in the case of resisting law enforcement
officials or for committing a propaganda crime by participating in
demonstrations supporting terror organisations. The law also provides that the 'aggravating
circumstances' provided for by the Anti-Terror Law will not apply to children
and that they will be tried only in children's courts or juvenile serious crime
courts. Implementation of this law is not complete.

By May 2011 a total of
20 juvenile heavy criminal courts had been established by law, of which only 11
were in operation. The total number of juvenile courts established by law was
75, of which 60 were in operation. The Child Protection Law requires that
courts should be established in all 81 provinces. In provinces where no such
courts exist, children are tried in courts for adults.

In most provinces,
there are not yet adequate facilities for children's pre-trial detention or to
make sure that children are detained separately from adults and receive proper
psychological support.

Trials in juvenile
courts are often long. In some cases the juvenile courts decided to postpone
their judgment, to convert a prison sentence to alternative sanctions or to
suspend sentences for terror-related crimes. In practice, these options were
not considered if the child was re-arrested.

Some 2,500 children
aged between 12 and 18 were in prison. However, imprisonment for children
should be used only as a measure of last resort and for the shortest
appropriate period of time. Efforts are needed to reduce the number of
juveniles detained, both on remand and under sentence. There was not a closed
correctional centre for juveniles in every region of the country.

Overall, efforts need to be stepped up in all areas,
including education, combating child labour, health, administrative capacity
and coordination. In general, more preventive and rehabilitation measures need
to be taken for juveniles. Moreover, there is a need to establish more juvenile
courts, in line with the legislation in force, and to minimise detention for
children which, if strictly necessary, should take place in appropriate
conditions.

As regards socially
vulnerable persons and/or persons with disabilities, a strategy paper on
accessibility and the related national action plan were adopted. However,
constitutional changes allowing positive discrimination in favour of the
disabled were not turned into specific measures. A national mechanism for
monitoring implementation of the UN Convention on the rights of disabled
persons and its optional protocol has still not been established.

Efforts to increase
employment of persons with disabilities brought some success in the public
sector. However, further measures are needed in both the public and private
sectors, including on creating new jobs and encouraging working from home.

Lack of data and
research on persons with disabilities and the mentally ill remain a barrier
against informed policy-making.

Persons with disabilities faced difficulties in access to
education, health, social and public services. Physical barriers to access to
public buildings continued to be a problem, despite legislation in force.
Further awareness-raising efforts are needed to fight prejudice against people
with disabilities and to increase their participation in social and economic
life. Legislation on inclusive education needs to be fully implemented. Mental
health is still an area of concern. Efforts are needed to safeguard the rights
of mentally ill patients and to improve conditions in certain care
institutions. An independent body to monitor and inspect mental health
institutions has not been established.

The principle of anti-discrimination is
enshrined in the Constitution and in several laws. However, comprehensive
anti-discrimination legislation is lacking, the current legal framework is not
adequately aligned with the EU acquis and, in practice, discrimination is
taking place against various categories of persons. Legislation establishing an
anti-discrimination and equality board has not been adopted.

The government removed all references to discrimination on
grounds of "sexual identity" or "sexual orientation" from
the draft Law establishing an anti-discrimination and equality board. Turkey
did not support a European Union-sponsored amendment to the UN Resolution on
extra-judicial executions and other unlawful killings calling on all States to
decriminalise homosexuality, despite the fact that homosexuality is not a
criminal offence in Turkey.

Lesbian, gay, bisexual and transgender persons (LGBT)
continued to suffer discrimination, intimidation and violent crimes.

There have been several cases of discrimination in the
workplace, where LGBT employees and civil servants have been fired on the
grounds of their sexual orientation. A number of court cases and judicial
proceedings are in progress. Charges under the provisions of the Turkish
Criminal Code on 'public exhibitionism' and 'offences against public morality'
were still used to discriminate against LGBT people. The Law on misdemeanours
was often used to impose fines on transgender persons.

Courts continued to apply the principle of 'unjust
provocation' in favour of perpetrators of crimes against transsexuals and
transvestites. LGBT persons and human rights defenders continued to face court
cases brought by the police in response to allegations of police brutality in
Ankara in May 2010. Judicial proceedings are also continuing against
transgender human rights defenders who accused the police of arbitrary arrests
and violence in Ankara in June 2010. In neither case have complaints brought
against the police by LGBT persons resulted in court cases.

Negative
stereotyping by political figures and the conservative media against LGBT
persons continued.

In November 2010, an
international conference organised by the Foundations of Journalists and
Writers focused on the concept of the "virtuous family" as an
institution based on religion and tradition and put homosexuality and incest in
the same category as 'diseases' that threaten society. High-level government
officials attended the final declaration by the conference.

The Turkish armed forces maintained an internal regulation
which defines homosexuality as a 'psychosexual' illness and declares
homosexuals unfit for military service. Conscripts who declared their
homosexuality were forced to provide photographic proof. Some have undergone
humiliating medical examinations.

Overall, efforts to improve the situation of socially vulnerable
persons and/or persons with disabilities continued. However, further measures
are required to increase their participation in social and economic life. Many
challenges remain in the areas of labour and trade union rights and the fight
against discrimination.

As regards labour
and trade union rights, the current legal framework is not in line
with EU standards and ILO conventions. Major obstacles remain for
private-sector workers and public servants on the rights to organise, bargain
collectively and on the right to strike. Constitutional amendments lifting some
restrictions on labour rights have not yet been turned into implementing
legislation. Trade union legislation has not been amended, partly because of
disagreement between social partners on some key issues, such as the right to
organise at the workplace and the high thresholds for entering into collective
bargaining

Social dialogue
mechanisms were not effectively used during the reporting period. The Economic
and Social Council, which gained constitutional status following the September
2010 referendum, has not yet convened. Social partners' involvement in
designing policies and legislation in the employment and social fields needs to
be improved.

Problems with
implementation of labour rights persisted: several cases of dismissal of
workers due to trade union membership and activity were reported. Such cases
have not been dealt with efficiently by the courts. The right to organise is still
not recognised for groups such as students, the retired, farmers and judicial
employees, whose trade unions have been sued for closure. Trade union
demonstrations were often negatively perceived by the authorities and subject
to restrictions and excessive use of force.

As regards property rights, legislation
amending the 2008 Law on foundations was adopted in August 2011. This is the
fourth attempt of the Turkish authorities since 2002 to restore the property
rights of non-Muslim communities. The new legislation provides that non-Muslim
community foundations can register in the Land Registry, under their names,
immovable property entered in their 1936 declarations for which either the
owner entry was left blank, or which are registered in the name of the
Treasury, the Directorate-General for Foundations, municipalities and special
provincial administrations, or cemeteries and fountains registered in the name
of public institutions. Interested parties will have to apply for the return of
properties within a twelve-month period from the entry into force of the new
legislation. Finally, the market value of foundation properties currently
registered with third parties will be paid. This covers properties seized and
sold to third parties, and which cannot be returned to the foundations. A
regulation will define implementation modalities of the new legislation.

Implementation of the 2008 Law on foundations[39] continued throughout the reporting period. By
mid-July 2010, the end of the additional period granted to foundations for
providing complete information, 61 of them had re-applied for registration of
properties. Overall, the February 2008 Law enabled the registration of 181
properties in the name of non-Muslim community foundations.

In November 2010 the Ecumenical Patriarchate received the
deeds of the Büyükada orphanage from the deeds office in Istanbul, following
the ECtHR ruling in the Ecumenical Patriarchate v. Turkey[40] case.

In March 2011, Turkey implemented the ECtHR judgment of
March 2009 on the property rights of the Kimisis Theodokou Greek Orthodox
church on the island of Bozcaada (Tenedos), by transferring the property titles
to the Bishop of Imvros and Tenedos.

However, implementation of the 2008 Law on foundations has
suffered from delays and procedural problems. The property of merged
foundations remains outside the scope of the August 2011 amendments to the Law.

The Syriac community continued to face difficulties with
property and land registration. A number of court cases continued concerning
both individuals and religious institutions. The Mor Gabriel Syriac Orthodox
monastery court cases regarding land ownership continued throughout the
reporting period. Litigation launched in parallel by State institutions and
neighbouring villages raised concerns. Among other cases, following positive
rulings by the local courts, the Turkish Forestry Department appealed to the
Court of Cassation, which decided against the monastery and reversed the
decision of the first-instance court. Judicial proceedings are continuing.

A large number of
properties of the Catholic Church across the country have been confiscated by
the State. The Catholic Church, like the other non-Muslim religious
communities, has no legal personality. It does not have community foundations
to register property and it can not establish new foundations. All the Church's
properties are registered in the names of Catholic priests.

Implementation of the March 2010 recommendations of the
Council of Europe Venice Commission on the protection of property rights is
pending.

Problems encountered by Greek nationals when inheriting and
registering property are still being reported, in particular following
application by the Turkish authorities of the amended Land Registry Law,
including their interpretation of the provisions on reciprocity. As regards
reciprocity, the ECtHR held that there had been a violation of Article 1 of
Protocol 1 (peaceful enjoyment of possessions) to the ECHR and ordered either
the return of property or financial compensation for the applicants.

Overall, there has been progress on the ground, with the adoption
of legislation amending the 2008 Law on foundations. The current legal
framework broadly provides for the return of properties entered in the 1936
declarations of the non-Muslim community foundations widening, thus, the scope
of the February 2008 legislation. The Turkish authorities and the Foundations
Council need to ensure the swift implementation of the new legislation. The deeds
of the Büyükada orphanage and of properties on the island of Bozcaada (Tenedos)
were transferred to the Ecumenical Patriarchate and to the Bishop of Imvros and
Tenedos, respectively. The Law on foundations continued to be implemented,
albeit with delays and procedural problems, enabling the return of 181
properties to community foundations. The property of merged foundations remains
outside the scope of the August 2011 amendments to the Law on foundations. The
ongoing cases against the Mor Gabriel Syriac Orthodox monastery continue to
raise concerns. Turkey needs to ensure full respect of the property rights of
all non-Muslim religious communities.

Respect for and protection of minorities,
cultural rights

Efforts were made in
favour of minority schools. In parallel to the practice in public schools, the
Ministry of National Education has extended support to the minority schools in
the form of new textbooks. In the 2010-2011 academic year, mathematics and
introduction to science textbooks were translated into Armenian and distributed
free of charge.

However, Turkey's approach to minority rights remained
restrictive. Turkey maintained its reservations on the UN International
Covenant on civil and political rights regarding the rights of minorities and
the UN Covenant on economic, social and cultural rights regarding the right to
education, which remained causes for concern. Turkey has not signed the Council
of Europe Framework Convention for the protection of national minorities.

There are no mechanisms or specific bodies in Turkey to
combat racism, xenophobia, anti-Semitism and intolerance. No specific
legislation exists and, where legislation does address discrimination issues,
it is often interpreted in a restrictive manner by the courts.

The situation of the Greek minority has not changed. It
continues to encounter problems with access to education and property rights,
including on the islands of Gökçeada (Imvros) and Bozcaada (Tenedos). The
decision to reopen a school in Gökçeada (Imvros) is still pending.

The management of minority schools, including accountability
to both minority Heads and non-minority Deputy Heads[41], remained an issue, pending an implementing
regulation. Minority schools faced procedural and bureaucratic difficulties
with registration, budget problems and sustainability issues due to the number
of students enrolled (restricted by law to those Turkish nationals from the
same minority). In March the Human Rights Commissioner of the Council of Europe
encouraged Turkish authorities to remove the legal obstacles and allow
non-Muslim communities to provide education, in their schools, to children of
these minorities irrespective of the legal status of these children, or the
status of their parents or legal guardians. Armenian children will, as of the
school year 2011-2012, be allowed to attend Armenian minority schools as guest
students.

Anti-Semitism and hate speech in the media targeting
missionaries or Christians in general remain an issue and have not been
punished by the judiciary or media institutions. Some
anti-missionary rhetoric remains in compulsory school textbooks.

The court case on the murder of Armenian journalist Hrant
Dink in 2007 is continuing, separately from the Trabzon case, with only minor
progress since the ECtHR judgment of 14 September 2010. In January, President Gül initiated an inquiry by the State
Supervisory Council into the murder. An Administrative Court in Istanbul fined[42] the Ministry of the Interior for not taking
protective measures. The lawyers of the Dink family requested that, in response
to the ECtHR ruling, an investigation about the potential implication of
high-ranking officers in the murder be launched directly by the prosecution and
focus on unearthing links between the accused and these officers. Two ministers
spoke out against any such investigation. This was criticised as putting the
judiciary under political pressure. There were no developments in this
investigation. Following a change in the law regarding juveniles, the case of
prime suspect Samast was transferred to the juvenile courts.

Overall, Turkey's approach to minorities remained restrictive.
Full respect for and protection of language, culture and fundamental rights, in
accordance with European standards, has yet to be achieved. Turkey needs to
make further efforts to enhance tolerance and promote inclusiveness vis-à-vis
minorities. There is a need for comprehensive revision of the existing
legislation, the introduction of comprehensive legislation to combat
discrimination and to establish protection mechanisms or specific bodies to
combat racism, xenophobia, anti-Semitism and intolerance.

As regards cultural rights, the Law on the establishment and broadcasting principles of
radio and TV stations entered into force in March 2011. It permits broadcasts
in languages other than Turkish by all nationwide radio and television
stations. Temporary suspension of broadcasting remains possible by Prime
Ministerial or Ministerial decision, in cases of threats to national security
and public order, but can now be appealed against in court (See also Chapter 10 - Information society
and media).

Mardin Artuklu University continued post-graduate education
in Kurdish. The Higher Education Board (YÖK) authorised the opening of a
Kurdish Language and Literature Department in Muş Alparslan University in
2011. Since there was not enough teaching staff, the university offered a
Kurdish language elective course at undergraduate level only. The course was
completed at the end of July.

The legal amendments
adopted in April 2010 and March 2011 allow
election advertising in languages other than Turkish and open the door for public or private radio or television
channels to broadcast in languages or dialects other than Turkish. However,
there are still laws that restrict the use of languages other than Turkish,
including the Constitution and the Political Party Law. Diverse Kurdish groups,
NGOs and trade unions submitted a one million signature petition to parliament
demanding the lifting of all restrictions on use of the mother tongue in daily
life.

The courts took a
number of positive decisions regarding the use of languages other than Turkish,
including Kurdish. The Mayor of Sur
and the municipal council in Diyarbakır were acquitted in January 2011 in
a case brought against them for offering municipal services in multiple
languages.

A law provides for
interpretation free of charge for non-Turkish speakers during their defence or
statement-taking, the investigation
phase and court hearings for suspects, victims or witnesses. In March 2011, a court in İzmir permitted a
Kurdish local politician to make his defence statement in Kurdish and decided
that a Kurdish interpreter would be present at the next session.

However, such practice
is not consistently followed. The judiciary issued contradictory decisions in
court cases against Kurdish politicians and human rights defenders. In May 2011, the Doğubayazıt Criminal
Court sentenced the former Mayor of Doğubayazıt and members of the
municipal council for violating the Law on the use of Turkish letters by naming
a park in Kurdish back in 2007.

Restrictions are still reported on the use of Kurdish in
prisons, during visits and exchanges of letters.

Referring to the principle of "national unity"
the Constitutional Court upheld the 1934 law on surnames and rejected the
request of a Syriac Turkish citizen to use a Syriac surname.

In April 2011, the
unfinished statue of humanity by Mehmet Aksoy in Kars was demolished. The
demolition was finalized in July.

As regards Roma, some steps were taken to address
long-standing problems. A discriminatory clause in the Law on the movement and
residence of aliens, which authorised the Ministry of the Interior to 'expel
stateless and non-Turkish gypsies and aliens that are not bound to the Turkish
culture' was amended in January 2011.

In March 2011, the
Minister in charge of the Roma opening announced the construction of nearly
9,000 housing units by the TOKİ administration to address the problem of "housing
in a healthy environment".

A Roma Research and
Implementation Centre was established within Adnan Menderes University in
Aydın province.

However,
the Roma opening has not led to a comprehensive strategy to address the
problems of the Roma population, who still face social exclusion,
marginalisation and discrimination in access to education and health services
due to their lack of identity cards, and also to housing, employment and participation
in public life. School drop-out rates for Roma children remained higher than
those of other children. Access for Roma children to pre-school education
should be improved.

Turkey has rejected
calls from the Roma community to participate in the 2005-2015 "Decade of
Roma Inclusion".

The urban
transformation scheme carried out in the Sulukule district of Istanbul and the
accompanying resettlement of many Roma caused dislocation and disruption. Some
could not adapt to their new housing but returned to Sulukule to live in much
poorer conditions. In late June, Roma houses in Küçükbakkalköy were also
demolished in the context of urban transformation.

Overall, Turkey has made progress on cultural rights,
especially on use of languages other than Turkish by all nationwide radio and
television stations and on use of multiple languages by municipalities. The opening of a Kurdish Language and Literature
Department in Muş Alparslan University has been authorised. However, restrictions remain on use of languages
other than Turkish in political life, in contacts with public services and in
prisons. The legal framework on use of languages other than Turkish is open to
restrictive interpretations and implementation remains inconsistent. There has
been some progress as regards the Roma, in particular on amending
discriminatory legislation. However, a comprehensive policy to address the
situation of the Roma is missing.

Situation in the east and south-east

The government continued to implement the South-East
Anatolia project (GAP), aimed at socio-economic development of the region, with
a view to completing it by 2012. Investments in irrigation, road transport,
health and education continued, along with special programmes on business
development, human resources and empowerment of women. Big dam projects are
being criticised for threatening sustainable development of the region by
destroying the living conditions of the local population, including historical
heritage, natural habitats, species and fertile agricultural land along rivers.

The Kurdish issue was
widely discussed, notably during the run-up to the elections in June.

In February 2011, a sub-committee to investigate the
circumstances of missing persons Tolga Baykal Ceylan and Cemal
Kırbayır was established under the TGNA Human Rights Investigation
Committee. The JİTEM (Intelligence Gendarmerie) and Colonel Temizöz cases
regarding extrajudicial killings and persons missing since the 1990s are
continuing before the Diyarbakır Serious Crimes Court.

Criminal complaints
were filed against the systematic
torture and killing of Kurds in
Diyarbakır military prison between 1981 and 1984, on the initiative of the
NGO Diyarbakır Prison Commission on Facts Research and Justice. The
Diyarbakır Prosecutor with Special Authority launched a judicial
investigation, although no formal prosecution has been brought yet.

However, terrorist
attacks by the PKK, which is on the EU list of terrorist organisations,
intensified after April 2011, despite its twice-extended unilateral ceasefire to 15 June.

A clash with the PKK in
Diyarbakır's Silvan sub-province changed the entire political climate in
Turkey adversely. 13 soldiers were killed and seven others were wounded in a
reported PKK ambush in mid July 2011, while the military had been carrying out
operations to rescue two soldiers and a health worker kidnapped by the PKK a
week earlier. Both the military and the Ministry of Interior (MoI) opened
investigations on the Silvan clashes. Since the General Staff investigation
results were similar to that of the MoI, the government saw no need to unveil
the findings of MoI inspection results.

Tensions escalated
further when the PKK killed eight Turkish soldiers and a village guard in
mid-August in an ambush in province of Hakkari. On the same day the Turkish Air
Force started cross border operations against many PKK targets on Qandil
Mountain, Hakourk, Avashin - Basyan, Zap and Metina Regions.

Concrete measures
announced as part of the democratic opening fell short of expectations and were
not followed through. Dialogue was
hampered by the arrest or detention of BDP-affiliated Kurdish politicians,
locally elected mayors and members of municipal councils and some human rights
defenders in connection with the KCK[43] trial. The trial of 152 defendants for alleged
membership of KCK (104 of whom are in prison) started before the 6th Serious
Crimes Court in Diyarbakır on 18 October 2010 and continued throughout the
year. Lawyers involved and human rights organisations' observers reported many
procedural wrongdoings in the investigation, arrest, detention and trial
procedures, and also during the initial collection of evidence. Demands for the
release of the defendants and for the defence to be made in Kurdish were
refused by the court.

Many other court cases ended in convictions against Kurdish
political figures and BDP officials; others are continuing. The Diyarbakır
prosecutor launched an investigation into the proposal made by the Democratic
Society Congress (DTK) in December 2010 for a democratic autonomous Kurdistan.
The BDP's general congress in September was also subject to a new judicial
investigation.

A campaign of civil
disobedience was launched by the DTK and BDP.

Landmines remained a
security concern for military personnel and civilians in the south-east, with
continued reports of death and injury. The government reported continuing use
of anti-personnel mines by the PKK. Turkey
reported that a total of 979,417 mines remained on its territory at the end of
2009, 2,361 fewer than in 2008. Under the 'Ottawa Convention' on the
prohibition of the use, stockpiling, production and transfer of anti-personnel
mines and on their destruction, Turkey has undertaken to destroy all
anti-personnel mines as soon as possible, but not later than 1 March 2014.
However, the process has not been
launched. An agreement was signed with
NATO's Maintenance and Supply Agency (NAMSA) in November 2010 for destruction of approximately 22,000 Area Denial Artillery Munitions
(ADAM). Destruction has started.

Clearance of anti-personnel landmines from an area of 212
million square metres along the Turkish-Syrian border has not yet started. The
tender should be awarded in 2011, with a view to completing the work in
2014.

5,114 anti-personnel
landmines have been cleared by the Gendarmerie General Command in areas under
its responsibility. In October 2010, destruction of all stored
anti-personnel landmines (approximately 3 million) was completed.

No steps have been taken to address the problem
of village guards, who are paid and armed by the State. According to official
figures, throughout Turkey,
the total number of village guards exceeds 45,000.

Overall,
the 2009 democratic opening, aimed at addressing the Kurdish issue in
particular, was not followed through. Terrorist attacks intensified and have
been/are consistently condemned by the EU. The detention of elected politicians
and human rights defenders raises concerns. The truth about extra-judicial
killings and torture in the south-east in the 1980s and 1990s has yet to be
established following the due process of law. Landmines and the village guard
system are still causes for concern.

Refugees and
internally displaced persons (IDPs)

Some deficiencies remained in the process of compensating for losses due to terrorism and the fight against terrorism. Since
the law entered into force in March 2008, up to December 2010 a total of 358,506
applications had been made to the Damage Assessment Commissions. Of these, 259,462 were assessed, with compensation paid in
146,441 cases and 113,021 applications rejected.

By April 2011, the
Commissions had allocated compensation totalling € 900,302,745 to
applicants who signed negotiated/amicable settlement declarations. However,
delays in payments have been reported. The implementation period by the
government of the Law on the compensation of losses resulting from terrorism
and the fight against terrorism has been extended by another year.

Numerous cases have been brought in the administrative
courts by rejected applicants. Several applied to the ECtHR. There is a need to
assess the overall effectiveness of the compensation process in terms of
implementation and legislation.

The situation of internally displaced persons (IDPs) in
urban areas remains a cause for concern. IDPs often cannot return to their
previous place of residence for a wide range of reasons, including security,
the continuing village guard system, the presence of landmines, lack of basic
infrastructure or capital and limited job opportunities. IDPs often live in
sub-standard conditions, including camps.

Concerning refugees
and asylum-seekers, circulars issued in 2010 produced some positive results
in terms of improving practices on the part of law enforcement officials and
central and local administrations.

However, the lack of a comprehensive legal framework for
refugees and asylum-seekers prevented further improvement. A draft revised Foreigners and International
Protection Law has been prepared. Meanwhile, continuing gaps in legislation,
particularly in immigration-related detention and deportation practices, remain
a concern. Unaccompanied minors found themselves at risk of detention together
with adults and with no access to State child protection services.

Overall,
the process of compensating IDPs has continued. There is a need to assess its
overall effectiveness. An overall national strategy to address IDPs'
needs better has not been developed yet. Despite some improvements, the lack of
a comprehensive legal framework for refugees and asylum-seekers is an
impediment to providing adequate treatment. Further
improvements are needed in the general conditions at detention centres for
foreigners.

2.3. 
Regional issues and
international obligations

Cyprus

Turkey continued to
express public support for the negotiations between the leaders of the
two communities under the good offices of the UN Secretary-General aimed at
finding a fair, comprehensive and viable solution to the Cyprus problem. This
was acknowledged in the March 2011 Assessment Report by the UN
Secretary-General on the status of the negotiations in Cyprus.

As emphasised by the
negotiating framework and Council declarations, Turkey is expected actively to
support the negotiations aimed at finding a fair, comprehensive and viable
settlement of the Cyprus issue within the UN framework, in accordance with the
relevant UN Security Council resolutions and in line with the principles on
which the Union is founded. Turkey's commitment and concrete contribution to
such a comprehensive settlement is crucial.

Despite repeated calls
by the Council and the Commission, Turkey still has not complied with its
obligations outlined in the declaration by the European Community and its
Member States of 21 September 2005 and in Council conclusions, including the
December 2006 and December 2010 conclusions.

It has not met its
obligation to ensure full, non-discriminatory implementation of the Additional
Protocol to the Association Agreement and has not removed all obstacles to
the free movement of goods, including restrictions on direct
transport links with Cyprus.

There was no progress
on normalising bilateral relations with the Republic of Cyprus. Turkey
has not lifted its veto of Cyprus's membership of several international
organisations, including the OECD and the Wassenaar Arrangement on export
controls for conventional arms and dual-use goods. The Republic of Cyprus
reported violations of its territorial waters and airspace by Turkey. Senior representatives of the Turkish government have stated that
relations with the EU Presidency will be frozen for six months as of 1 July
2012 in the absence of a comprehensive settlement of the Cyprus issue when
Cyprus takes over the Council presidency.

Peaceful settlement of border disputes

Turkey and Greece
continued their efforts to improve bilateral relations. From 7 to 9 January
2011 the Greek Prime Minister visited Erzurum, accompanied by the Foreign
Minister at the invitation of the Turkish Prime Minister.

The 53rd round of
exploratory talks took place in July in Greece. Exploratory talks have been
taking place since 2002 and have intensified since October 2009. The importance of cooperation has been underlined in high levels
meetings. Between 8 and 10 March, the Turkish Foreign
Minister paid a visit to Greece. He met the Greek Prime Minister and Foreign
Minister and members of the Muslim minority living in Thrace. The threat of casus
belli in response to the possible extension of Greek territorial waters
made in the 1995 resolution of the Turkish Grand National Assembly still
stands. In line with the negotiating framework, the Council conclusions of
December 2010 noted that 'Turkey needs to commit itself unequivocally to good
neighbourly relations and to the peaceful settlement of disputes in accordance
with the United Nations Charter, having recourse, if necessary, to the International
Court of Justice. In this context, the Union urges the avoidance of any kind of
threat, source of friction or action which could damage good neighbourly
relations and the peaceful settlement of disputes.' Greece made a substantial
number of formal complaints about violations of its territorial waters and
airspace by Turkey, including flights over Greek islands.

Regional cooperation

Turkey remains actively
involved in regional initiatives including the South-East European Cooperation
Process (SEECP) and the Regional Cooperation Council (RCC).

Bilateral relations
with other enlargement countries and neighbouring EU Member States have been positive. Turkey has significantly
intensified contacts in the Western Balkans, expressing a firm
commitment to promoting peace and stability in the region. Turkey supports the
European integration of all countries in the region. On 26 April 2011 the
President of Turkey attended a tripartite meeting between Turkey, Serbia and
Bosnia and Herzegovina in Belgrade.

Within the framework of
the common security and defence policy, Turkey is continuing to contribute to
the EU-led military mission in Bosnia and Herzegovina (EUFOR/ALTHEA). It is
also contributing to EUPM (the EU-led police mission in Bosnia and Herzegovina)
and to the EULEX mission in Kosovo[44]. Turkey supports Kosovo's integration into the
international community, European institutions and regional initiatives. Turkey
provided humanitarian assistance to Albania and Montenegro following the floods
in these two countries in December 2010. Turkey maintains strong ties with the
former Yugoslav Republic of Macedonia. High-level bilateral meetings were held
with Croatia, Serbia, Montenegro and Bosnia, Herzegovina and Kosovo.

Relations with Bulgaria
remained positive.

As regards the International Criminal Court (ICC), see Chapter
31 – Common foreign and security policy.

3. 
Economic criteria

In examining the
economic developments in Turkey, the Commission's approach was guided by the
conclusions of the European Council in Copenhagen in June 1993, which stated
that membership of the Union requires the existence of a functioning market
economy and the capacity to cope with competitive pressure and market forces
within the Union.

3.1. 
The existence of a
functioning market economy

Economic policy essentials

Turkey's economic
policy is tailored to maintaining an open, largely market-driven economy with
relatively prudent public finance management and a well regulated financial
sector. The Pre-Accession Economic Programme
(PEP) submitted to the Commission in April 2011 adequately reflects needs and
commitments to further reform. However, it drew to too large an extent on the
Medium-Term Plan (MTP) already published in mid-2010. Turkey's economic
governance still has to focus on the imbalances emerging from the stronger than
anticipated recovery and on further structural reforms, some of which,
particularly in taxation and employment, are expected from the new government,
which took office after the June 2011 elections. The fragmentation of
responsibilities between government bodies continues to complicate coordination
of budgeting and medium-term economic policy-making. The authorities are
stepping up their efforts to enhance cooperation through the establishment of a
financial stability committee. Overall, the consensus as regards the fundamental goals of economic
policy remains firm.

Macroeconomic
stability

After
a steep recovery in 2010 when the Turkish economy grew by 9% year-on-year, the
rapid economic expansion continued with 10.2% year-on-year GDP growth in the
first half of 2011. Economic
activity bounced back strongly, which reflected some base effects, but also
strong domestic demand growth driven by low real interest rates, strong capital
inflows and a rapid acceleration in the growth in bank credit. The private
sector remained the main driver of the recovery. In the first half of 2011,
private consumption rose by 10.8% year on year, with private-sector investment,
which accounts for about 15% of GDP, expanding by a remarkable 31.3% year on
year. In spite of the June Parliamentary elections,
government consumption remained restrained and posted a first-half increase of
7.3% year-on-year. The sharp increase in domestic demand was accompanied
by a further deterioration in the trade and current account balances. Exports
of goods and services rose by 4.2% year on year, while imports of goods and
services grew at an accelerated rate of 23%. All major sectors of the economy
contributed to growth in 2010/11. The largest increases in gross value added
came from construction and manufacturing. Turkey's GDP measure (at purchasing power parity) per
inhabitant stood at 48% of the EU average in 2010. Overall,
the economy expanded rapidly in 2010 and in the first half of 2011, mainly
driven by strong domestic demand.

The current-account
deficit, which tripled to a record of 6.6% of GDP in 2010, continued to widen
in the first half of 2011. The increase was entirely due to the deterioration
of the merchandise trade deficit, which more than doubled compared with a year
earlier. Strong domestic demand and high global commodity prices continued to
boost the import bill, notwithstanding the Central Bank's efforts to curb
credit growth and the recent relative weakness of the Turkish lira. Exports to
some countries in political crisis started to fall and, according to
customs-based data, exports to North Africa declined by about 10% year on year
in the first half of 2011. At the same time, sales to almost all other regions
recorded strong growth. The balance-of-payments data also included high
positive capital inflows from crisis-ridden countries in the Middle East, which
are reportedly as high as €10 billion in the first six months of 2011.
According to Central Bank data, official gross foreign-exchange reserves have
stayed on an upward trend in 2011, and amounted to €68 billion by mid 2011.
This was also a result of continued inflows on the portfolio side (especially
bond issuance), but more importantly of the access by the corporate and banking
sectors to ample financing. Overall, imports have been rising due
to strong domestic demand, thus considerably increasing trade and current
account deficits. External imbalances have become significant.

In 2010, the
unemployment rate amounted to 11.9%, down significantly from 14% in 2009. This
trend continued in the first months of 2011, and in May 2011 the jobless rate
stood at 9.4%, which represented a 1.6 pps improvement over the same month one
year earlier. The non-agriculture unemployment rate showed a broadly similar
trend. The youth unemployment rate dropped faster, most likely as a result of
the priority the government gave to this segment in the employment package.
Nevertheless, youth unemployment remains high at at 21.7%. Employment data for
2010 show a marked improvement, as the number of employed persons increased by
over 6% compared with 2009. Overall labour participation amounts to 49%, with a
significant gender imbalance. While the labour participation is around 70% for
men, it is below 30% for women. Despite the fact that there is such a low
proportion of the female population actively looking for work, the female
unemployment rate is only slightly higher than the male unemployment rate. In
addition, about one third of women
who are considered as employed are unpaid family workers in the agricultural
sector, which reduces the percentage of women of working age who are employed
and receiving an income to only less than 15% of the total. The labour markets need to
absorb the unemployed and about one million new entrants every year. Overly strict employment protection laws
discourage employers from hiring new people. The prevalence of undeclared work
remains a major challenge. Overall, robust
economic development allowed strong employment growth and a sizeable
drop in unemployment.

Consumer price inflation was down from 6.5% in 2009 to 6.4%
in 2010, remaining slightly below the official target of 6.5%, while annual
core inflation rates surged to 6.4% in 2010 from 3.0% in 2009. Producer prices
rose from 5.9% in 2009 to 8.9% in 2010. In the first five months of 2011,
consumer price inflation proved highly volatile, hitting a 30-year low of 4% in
March before picking up to reach 6.7% in August, largely on the back of strong
base effects and volatile food prices. The combination of strong domestic
demand, high world prices for fuel and food and a weaker currency can be
expected to push inflation up further. Recently, the Central Bank revised its
year-end inflation forecast upwards to 6.9%, significantly above the 5.5%
inflation target, but still within the two percentage points inflation
tolerance band. It cited higher-than-expected global oil prices and changes in
customs duties (an increase in customs duties on many textile products took
effect in July). Assuming 'limited additional monetary tightening' in the
second half of the year, the Central Bank expected the annual inflation rate to
rise in the second quarter, fall in the third quarter and rise again in the
fourth quarter. Overall, inflation has been in a volatile and upward
trend, in large part due to pressures arising from energy and food inputs and
buoyant economic activity.

Given the strong
inflationary pressures and the rapidly deteriorating current account balance,
gauging monetary policy is becoming more complicated by the day. The Central
Bank of Turkey (CBT) has altered its monetary policy stance by combining
relatively low interest rates, a wide interest rate corridor and high
commercial bank reserve requirement rates (RRR). Since October, when the CBT
first raised the RRRs by an average of 50 bps, it has also increased the RRRs
on short term Turkish Lira deposits by an average 11 pps and foreign exchange
deposits by an average 12 pps. The aim was to increase the cost of funding for
banks and to curb credit growth in order to slow down the economy. Moreover,
the CBT reduced the policy rate to 6.25% from 7.0% and widened the gap
between overnight borrowing and lending rates by increasing the borrowing
rate to 9.0% and decreasing the lending rate to 1.0% to discourage short-term
inflows. So far, the CBT has been only partially successful, as the exchange
rate has weakened somewhat, but RRR increases have failed to slow credit growth
which - along with higher commodity prices - continues to feed Turkey's growing
current account deficit. Given the momentum in the economy and the still rapid
growth of credit, this degree of tightening has not shifted the drivers of
growth away from domestic demand. More support from the fiscal side, and some
specific and targeted macroprudential measures are being put in place,
including by the banking regulator, in order to help engineer a soft landing of
the economy and ease the burden placed on monetary policy. In August 2011, the
CBT reduced the policy rate further from 6.25% to 5.75%, and decreased the gap
between overnight borrowing and lending rates, arguing that, in view of the
slowdown observed since the second quarter of 2011, there is a need to protect
domestic economic growth. Overall, monetary policy has been only partially
successful, as it was unable to sufficiently curb the growth of credit, which -
along with high commodity prices - continues to feed Turkey's growing current
account deficit.

The budget performed much better than expected in 2010 and
the first half of 2011, especially due to the robust recovery in domestic
demand, which provided significant support to indirect tax revenues. Overall
real tax revenues rose by 35% year-on-year in 2010, and real expenditure grew
by 15%. Consequently, the primary surplus almost tripled and the overall
central government budget deficit fell by about half from 5.7% of GDP in 2009
to 3.6% of GDP in 2010, which was much better than the level of 4.7% of GDP
which was originally budgeted. In the first half of 2011, strong demand
continued to support the budget performance, as revenues increased by double
digit rates. Lower interest payments, as well as delays in payments and the use
of funds entered under the 2010 budget, may also have helped to hold down
expenditure despite a significant real rise in personnel costs and some other
current spending items. According to the medium-term
fiscal plan, the government expects a budget deficit of 2.8% of GDP in 2011.
Extra revenues collected from a tax amnesty programme, if saved, would take the
2011 deficit even lower. Targets have not been adjusted for economic growth
figures and revenues which were higher than anticipated. Therefore, fiscal
policy may have more scope to support the monetary policy efforts aimed at
curbing the current account deficit. The public debt stock fell
significantly in 2010, thereby in large part offsetting the increases observed
since 2008, and it amounted to 41.6% of GDP by the end of 2010. The government
announced a tax amnesty in June 2011 and expects an additional revenue of €6.8
billion (about 1% of GDP) this year, which would be primarily used for debt
reduction. Overall, consolidation of
public finances is on track.

Renewed efforts have
been made to provide more efficient and transparent high quality public
services and budgeting, including the adoption of a new law on the Turkish
Court of Accounts (TCA) and the new law on State Aid. However, there is scope
for further improvement, as the government could be more transparent and
provide the public with more detailed information on the central government's
budget and financial activities during the budget year. Four years after the
adoption of the Public Financial Management Law, some components are still
missing, in particular measures to enhance the accountability, efficiency and
transparency of the budgeting process. This makes it difficult for citizens to
hold the government accountable for its management of public money. The
unification of all tax administration functions under the Revenue Administration
which had been previously announced has not yet been fully implemented. The aim
of this unification was to strengthen the audit capacity and facilitate greater
use of standard risk-based audit techniques, thereby enhancing transparency and
reducing informality. The adoption of a strong fiscal rule may not only enhance
fiscal transparency, but also provide a strong fiscal anchor and enhance
credibility. Overall, modest efforts were made to increase fiscal
transparency.

Turkey's fiscal and monetary policy mix proved successful
during the crisis. Although the Turkish economy was hit hard by the financial
crisis, the earlier regulatory and supervisory reforms have paid off and there
was a rapid resumption of strong growth. However, Turkey did not fully benefit
from the recovery owing to insufficient adjustments. Making more progress with fiscal transparency, adjusting
the fiscal and monetary policy mix, doing more to target inflation and
preserving financial stability will be important ways to minimise the risks of
a boom-bust scenario. Overall, macroeconomic stability remains vulnerable and could
benefit more from a better coordinated tightening of the policy mix.

Interplay of market
forces

Regulatory and
surveillance agencies are in place in all major sectors. Automatic pricing
mechanisms are operational in the natural gas and electricity sectors, where
end-user prices are supposedly linked to a cost-based methodology. The share of
administrated prices in the Consumer Price Index (CPI) basket currently amounts
to only 4.5% of the total weight of the CPI basket. However, before the
Parliamentary elections in June 2011, the government did not allow global price
changes to impact on electricity consumption and natural gas prices during a
period of one year, thereby effectively suspending automatic pricing
mechanisms. Despite the regulatory framework, government authorities still tend
to set prices in the transport sector, in particular for civil aviation.
Liberalisation of backbone services, in particular in the energy sector,
prepared the ground for several successful privatisations in this sector,
enabling Turkey to continue its
privatisation efforts in the challenging aftermath of the financial crisis.

The volume of completed
privatisation transactions rose from €1.6 billion in 2009 (0.4% of GDP) to €2.3
billion (0.7% of GDP) in 2010. Major deals completed in 2010 included the
privatisation of two ports, a salt mine, and six electricity distribution
companies. Ongoing privatisations include major electricity generation assets,
highways, bridges and ports. Sales of remaining shares in Turkish Airlines,
Turk Telekom, Petkim, and the partly state-owned banks Halkbank and Vakifbank,
have been scheduled, whereas there is no plan yet for Ziraatbank and the
national lottery. Overall, the free interplay and functioning of market
forces has been confirmed. Spurred on by recovery, privatisation has gained
momentum.

Market entry and
exit

In 2010, the business
registration process was further streamlined. As a result, it now takes on
average only 6 days to open a business. However, starting a business in Turkey
is costly and corresponds to 17.2% of per capita income. Some fees are not transparent, such as those for the official registration of a company's
articles and accounts. Trade registry fees are significant. Closing a business
is still expensive and time consuming in Turkey. Insolvency procedures take
about 3.3 years and recovery rates - at 20% on average - are very low. Progress
in removing exit barriers remains weak. Foreign investors face restrictions in
various areas, including maritime transport, civil aviation, ground-handling,
road transport, radio and TV broadcasting, energy, accountancy and education.
Licensing procedures are relatively lengthy. For example, 25 different
procedures are still needed in order to build a warehouse, from securing
licences and permits to completing the necessary notifications and inspections
and obtaining utility connections. Overall, market exit remains expensive and lengthy, and bankruptcy
proceedings are still relatively onerous.

Legal system

A reasonably well
functioning legal system, including in the area of property rights, has been in
place for several years. Registering a property in Turkey requires six separate
procedures and takes six days. Enforcement of commercial contracts is still a
rather lengthy process, which involves 35 procedures and takes an average of
420 days. Commercial court judges do not have a very high level of
specialisation, which results in lengthy court proceedings. The expert witness
system still operates as a parallel judicial system, but does not improve the
overall quality. Out-of-court dispute settlement mechanisms are very seldom
used. The judicial system and administrative capacity can be further improved. Overall,
the legal system continues to provide effective support to the business
environment.

Financial sector
development

Largely as a result of the major improvements made to the
regulatory and supervisory framework in the aftermath of the 2001 financial
crisis, the banking sector has demonstrated its resilience to the global
financial crisis. Risk ratios in the financial sector remained robust. Banks
continued to dominate the sector, as their share of total financial sector
assets increased from 79.6% in 2009 to 80.4% in 2010. The share of the
insurance sector decreased from 3.2% to 2.7% (including private pensions, whose
share remained at 1.5%). With 3.6% of the total, the share of securities market
intermediaries (investment companies, mutual funds, investments trusts, real
estate investment trusts, venture capital funds) remained limited. Stock market
capitalisation increased from 36.2% of GDP in 2009 to 41.1% of GDP in 2010.

Banking sector assets
relative to GDP increased from 87.6% in 2009 to 91.2% in 2010 (excluding the
Central Bank). The share of state-owned banks in total banking sector assets
decreased from 30.1% in 2009 to 29.6% in 2010, while the share of domestic
private banks was 49.4% and the share of foreign banks 13.5%. The planned privatisation
of state-owned banks made no progress. In tandem with the recovery, financial
intermediation activities accelerated due to the rapid credit expansion.
Banking sector loans increased from 41.2% of GDP in 2009 to 47.6% of GDP in
2010. Corporate loans (20.7% of GDP), SME loans (11.3% of GDP) and consumer
loans (15.6%% of GDP) all increased their relative weight in economic activity.
The increase in deposits, on the other hand, was more modest, up from 54% of
GDP in 2009 to 55.8% in 2010. The value of outstanding debt instruments traded
in the bond market decreased slightly, from 38.2% in April 2009 to 34.9% in
2010. Although there were more private debt issues in 2010 and 2011, these
instruments accounted for only 1.3% of the total equity market as of 31 March
2011.

The efficiency of
financial intermediation improved, as measured by the sector's average spread,
which shrank from 5.3% in 2009 to 3.2% in late 2010. Non-performing loans as a
share of total banking sector loans decreased from 5.3% in 2009 to 3.7% in
2010, returning to their pre-crisis level. Despite a slight decrease, capital
adequacy in the banking sector remained well above the statutory minimum of
12%: namely at 20.5% in 2009 and 18.9% in 2010. Banking concentration can be
described as moderate (just over 60% of total banking assets are with the five
largest banks). Although in the first quarter of 2011 the banking sector's
profits were seriously eroded by the steep rises in RRR and fell by 17% in the
first quarter of 2011, the sector remained cost-effective and profitable. Overall,
the financial sector has shown considerable strength thanks to earlier reforms.

3.2. 
The capacity to cope with
competitive pressure and market forces within the Union

Existence of a functioning market economy

The strength of domestic demand is fuelling a
rapid recovery from recession, which confirms the economy's improved resilience
to shocks. However, it is also fuelling a rapid expansion of the current
account deficit, presaging the return of persistent imbalances in the Turkish
economy. As the recovery gets under
way, an opportunity for structural reforms is being opened up in recognition of
Turkey's sound fundamentals. At the same time, further growth in Turkey is
being held back by the lack of activity and productivity growth that is not
sufficiently broad-based. Overall,
the strong recovery has not
affected the functioning of market mechanisms.

Human and physical
capital

The educational reform
programme, which is a key component of the National Development Plan
(2007-2013), is being implemented. It sets two key priorities for education,
modernisation and reform: namely increase the responsiveness of education to
demand and enhance the education system. In 2010, the challenges remained
significant. Although there has been some progress and the top students in
Turkey are performing well, the vast majority of Turkish students display the
lowest proficiency levels in basic skills and problem-solving. Participation in
higher education remains low by international standards. Around 45% of 20- to
24-year olds go to university, which is 8 percentage points more than five
years ago. Reforms and increased spending on education are obviously generating
a positive impact on educational attainment and schooling rates, but significant
problems remain with regard to the quality of education.

A high level of job
creation is needed to provide work opportunities for young people entering the
labour market. Overall, the Turkish labour force remains to a large extent low
skilled due to persistent problems in the education and vocational training
systems and a segmented labour market. While employment measures for the young
and for women have increased, their scope and impact is still too low.

The gross fixed capital
formation ratio rose from 16.9% of GDP in 2009 to 18.7% in 2010. The increase
in public investments was relatively small (from 3.7% to 3.9% of GDP), whereas
private investments increased from 13.2% to 14.9% of GDP. FDI inflows to Turkey (gross) increased from
€5,861 million to €6,738 million. Acquisitions of real estate by foreigners
were up to 28% of total FDI inflows in 2010 (from 21% in 2009). Although the official aim of the government is
to increase expenditures on research and development to the target figure of 2%
of GDP by 2010, the actual outcomes remain much lower, given that R&D
expenditure amounted to just 0.85% of GDP in 2009 (latest available data).
Growth in gross electricity consumption has averaged around 6% in each of the
past five years, and no extra power generating capacity has been built.
Improvements in infrastructure have been modest. Overall, modest
progress was made on upgrading the country's human and physical capital.

Sectoral and
enterprise structure

Following a significant
increase in 2009, agriculture's share of employment stabilised at 25% in 2010.
Jobs were created in the industrial sector (including construction) and the
share of agriculture in the total labour force rose to 26.3%, i.e. back to
pre-crisis levels. Employment in the services sector was down from over 50% in
2009 to over 48.6% in 2010. Labour markets have been adjusting rapidly to the
need for recovery, and overall employment grew by over 6% in 2010. At the same
time, the relative output of agriculture remained stable at 8.4% of GDP in
2010. The contribution of industry (including construction) to GDP grew
proportionally faster than that of other sectors, accounting for roughly 26% of
GDP. The contribution of services decreased slightly to about 64% of GDP.

Progress in the
liberalisation of the electricity and natural gas sectors has been uneven. The
privatisation programme for electricity distribution assets was completed in
2010 and the process for the generation of assets has been launched. The long
awaited law amending the previous law on renewables was adopted in mid-January
2011 with a view to promoting investments in renewables. There are no
developments to report in the gas sector. The deadlines set by the Natural Gas
Market Law to restructure the incumbent gas monopoly holder, BOTAS, have not
been met. The level of competition in the telecommunications market remained
limited. The percentage of alternative operators in the broadband and fixed
telephony market remains low.

Overall, the industrial sector is still the driving force
behind Turkey's rapid recovery.

State influence on competitiveness

There has seen some
long awaited progress in the field of State aid. The law on State aid monitoring has been adopted
and the State Aid Authority has become operational. It is expected that it will
establish a comprehensive State aid inventory and an action plan for aligning
all State aid schemes with the acquis. Competitiveness rules should also
be relaxed by the Parliament's adoption
of the Commercial Code, which is expected to enter into force in July 2012. Public procurement policies continued to be
undermined by exceptions to the regulatory framework. Overall, the new
law on State aid monitoring and the operation of the State Aid Authority may
increase transparency and lead to a reduction of State aid.

Economic integration with the EU

The openness of the
economy as measured by the value of exports and imports of goods and services
as a percentage of GDP remained unchanged at 47.7% in both 2009 and 2010. The
EU's share of Turkey's total trade decreased from 42.6% in 2009 to 41.7% in
2010. The EU share of Turkey's exports increased slightly from 46% to 46.2%,
although its import share decreased from 42.6% to 41.7%. The EU continued to be
the main source of FDI inflows to Turkey, with a 79% share in 2009 and a 76%
share in 2010. Foreign capital investment inflows originating from the EU
countries – excluding real estate and others - increased from €4,356 million to
€4,723 million. The share of Northern African countries in Turkey's exports was
down from 9.9% to 8.2%. Near and Middle Eastern countries increased their total
share in Turkey's exports from 18.8% to 20.5% in 2010. Overall, trade
and economic integration with the EU remained high.

Based on the information available on real wage
developments, unit labour costs appear to have increased at a broadly similar
pace to labour productivity. At the same time, pressures leading to an
appreciation of the nominal exchange rate were observed in 2010. In the year to May 2011, the exchange rate for
the lira appreciated by 3% in nominal terms against a basket of 50% US dollar
and 50% euro. In real terms, corrected for both producer and consumer price
developments, the lira strengthened by 5%. Overall, standard indicators
suggest that there has been a slight worsening in Turkey's export
competitiveness.

4. 
Ability to assume the obligations of
membership

This section examines
Turkey's ability to assume the obligations of membership – that is, the acquis
as expressed in the Treaties, the secondary legislation and the policies of
the Union. It also analyses Turkey's administrative capacity to implement the acquis.
The analysis is structured according to the list of 33 acquis chapters.
In each sector, the Commission's assessment covers progress achieved during the
reporting period, and summarises the country's overall level of preparations.

4.1. 
Chapter 1: Free movement of
goods

Despite an advanced
level of alignment in this area, limited progress can be reported as regards
alignment with the general principles applicable to free movement of
goods. The Ministry of Economy started implementing a risk-based import control
system on a pilot basis. The system is a web-based tool allowing electronic
applications to be filed by importers and generating electronic certificates of
conformity on completion of the risk assessment. Physical checks are carried
out only for product categories that are considered to be 'at risk'.
Nevertheless, the system, in its current application, is limited to a few
product categories such as personal protective equipment. Third country
products in free circulation in the EU, which fall under other New Approach
directives, are still subject to conformity assessment procedures on
documentation and, if necessary, in the form of physical checks at the customs,
which delay their access to the Turkish market.

Technical barriers to trade
continue to exist and prevent the free circulation of goods in certain areas
such as pharmaceuticals. The requirement concerning good manufacturing practice
certificates for the registration of pharmaceutical products for human use
remains unchanged despite several attempts to resolve the issue through
cooperation. This causes long delays in the registration process and results in
a de facto discrimination against EU imports which works to the
advantage of domestic producers. The requirements to register imports of
textiles and clothing remain in effect. The mutual recognition principle has
still not been introduced into the Turkish legal order, which creates
limitations on the free circulation of goods in the non-harmonised area. Turkey's
introduction of new mandatory standards in this area without prior notification
to the EU creates trade problems, which can result in economic losses. Licences
are still required for old goods such as construction equipment and motor
vehicles and for goods classified as renovated or faulty, and also for
second-hand motor vehicles and alcoholic beverages. Exports of copper scrap are
still subject to restrictions which constitute a de facto ban that is
contrary to Customs Union provisions. Some other goods are subject to prior
registration.

As regards horizontal
measures, further progress can be reported in the area of standardisation.
The adoption of European standards by the Turkish Standards Institute (TSE)
continued during the reporting period. TSE has so far adopted a total of 16,506
standards of the European Committee for Standardisation (CEN) and the European
Committee for Electro-technical Standardisation (CENELEC). Turkey has so far
harmonised a total of 377 standards of the European Telecommunication Standards
Institute (ETSI). The overall rate of harmonisation with European standards is
around 98%. TSE is running 73 operational mirror committees. Stakeholder
participation is a crucial aspect of voluntary standardisation. TSE is
encouraged to ensure more active participation by SMEs and consumers
organisations in its standardisation work. TSE underwent an assessment by CEN
and CENELEC in 2010 for its full membership of this organisation. The
assessment is still ongoing with further exchange of documentation between the
TSE and CEN. The revised law reflecting the new structure of TSE has not yet
been adopted.

In terms of conformity
assessment, further progress was achieved in the area of Notified Bodies.
There are now 18 Turkish Notified Bodies compared with 14 in 2010 operating in
the areas of toys, personal protective equipment, lifts, hot water boilers,
appliances burning gaseous fuels, construction products, simple pressure
vessels, pressure equipment, medical devices, recreational crafts, machinery
and equipment and protective systems intended for use in potentially explosive
atmospheres. There is one Approval Body for the area of construction products.

Some progress can be
noted regarding accreditation. TURKAK is a member of the European
Accreditation Cooperation (EA) and a signatory of seven multilateral agreements
of the EA. The number of TURKAK accreditations is up by 23% since last year and
has reached 572. TURKAK is the Monitoring Authority for the area of Good
Laboratory Practice (GLP). However, TURKAK has not yet established a GLP
monitoring programme. The revised law designed to further harmonise the
structure of TURKAK with the European accreditation system has not yet been
adopted. Pending these legislative changes, TURKAK continues to have problems
as regards financial and administrative autonomy, which is an essential feature
for an accreditation body. The current legal framework on accreditation is not
yet in line with the EU's new legislative framework.

Some progress can be
reported in the area of legal metrology. In the reporting period,
the Ministry of Science, Industry and Technology issued new and amending
legislation on measures and measuring instruments, their import and export and
tachographs. These changes helped in clarifying the legal environment and in
the further liberalisation of trade in measuring instruments exported from the
EU. Implementation of the measuring instruments directive has not yet started.

There was some progress
on market surveillance. The Ministry of Economy published its 2010
market surveillance report. The report reveals that market surveillance
activities continued to grow although there is a need for more focus on some
product categories. There are shortcomings concerning the consistency of data
collected by market surveillance authorities, insufficient allocation of
resources to market surveillance activities and full-time commitment of
inspectors to these activities. The Ministry of Customs and Trade was appointed
responsible for market surveillance in the non-harmonised area. The Prime
Ministry adopted a circular on the Market Surveillance Coordination Board,
which requires the active participation of the relevant bodies in Board
meetings for the implementation of the National Market Surveillance Strategy.
As part of the 2010-2012 strategy, the Board has recently adopted the National
Market Surveillance Programme for 2011. The programme lists horizontal
priorities such as the creation of separate administrative units for market
surveillance within Ministries, the inspection of chemical risks related to
consumer products, the establishment of common enforcement procedures, the
maintenance of a product safety website, participation in the Product Safety
Enforcement Forum of Europe (PROSAFE) and training activities. The database
linking accidents and injuries to products as foreseen in the 2011 market
surveillance strategy is not yet operational although the technical work is
about to be completed. These are welcome coordinated steps, although
coordination within and between surveillance agencies is still incomplete,
including with regard to the use of information technologies. In addition, the
Ministry of Economy increased the administrative fines related to market
surveillance. The Ministry of Environment and Urban Planning issued a
communiqué creating central surveillance inspectors, whose remit is to train
local inspectors and determine the Ministry's market surveillance strategy.
During the reporting period, the Ministry of Science, Industry and Technology
issued a communiqué on market surveillance of consumer goods which may contain
dangerous chemicals.

In spite of this
progress, horizontal deficiencies persist, such as the insufficient allocation
of financial and human resources and the need for more full-time specialised inspectors.
The use of risk assessment and sampling methods is not yet widespread. The
effectiveness of market surveillance actions is not systematically evaluated
and the visibility of market surveillance remains low. Stakeholders are not
systematically informed of market surveillance activities and measures, and
their general involvement in surveillance remains weak. However, the
establishment of the Market Surveillance and Product Safety Evaluation Board at
ministerial level raised the overall profile of market surveillance in the
country. Full alignment with the 2001 version of the general products safety
directive has yet to be implemented. The same applies to Regulation 765/2008,
which sets out the requirements for accreditation and market surveillance
relating to the marketing of products.

Alignment of horizontal
measures is advanced. However, effective implementation of market surveillance
and adoption of final legislative changes on standardisation and accreditation
are still not in place. If this situation persists, it may particularly harm
the work of TURKAK and place its multilateral agreements at risk. The new
legislative framework on marketing of products has yet to be adopted with
respect to market surveillance, conformity assessment procedures, CE marking
and accreditation.

There was limited progress on the 'Old Approach' product
legislation. In the reporting period the Ministry of Science, Industry and
Technology adopted various pieces of mostly amending legislation on the
manufacturing, modification and assembly of motor vehicles, emissions from
non-road mobile machinery and from light passenger and commercial vehicles,
heavy duty vehicles, agricultural and forestry tractors, on technical services
for motor vehicles and the type-approval of hydrogen-powered motor vehicles.
Most of these amendments are related to the postponement of implementation
deadlines. The Ministry of Health issued a communiqué on detergents and
surfactants used in detergents. The same Ministry issued amending legislation on
the packaging and labelling of pharmaceuticals for human use, the licensing of
such products, a regulation on clinical trials and another regulation on
traditional herbal medicinal products. With regard to regulatory data
exclusivity, there is no evidence that Turkey has recently approved unlawful
generic applications. Certain provisions of its legislation do not provide
legal certainty as regards data exclusivity for any combination pharmaceutical
product registered in the Customs Union after 1 January 2005. There are
concerns over the cumbersome and delayed release of GMP certificates, which has
already severely affected and continues to affect the marketing authorization
of pharmaceutical products in Turkey, and may have an indirect impact on
regulatory data exclusivity. The
Tobacco and Alcohol Board continues to require the same documentation as was
required before the import licence requirement was abolished. Alignment with
the old approach acquis is advanced, but further efforts are needed for
completion.

Some further progress
can be reported in the area of 'New and Global Approach' product
legislation as the alignment is already advanced. The Ministry of
Environment and Urban Planning issued various pieces of legislation on the
performance of construction products in reaction to fire, conformity assessment
systems, publication of technical specifications and the designation criteria
for notified bodies. The Ministry of Health updated its designation criteria
for notified bodies in the area of medical devices and published two
regulations on active implantable medical devices and medical devices aiming to
further align with the current acquis and another regulation on clinical
trials also applying to medical devices. The Ministry of Science, Industry and
Technology published regulations on eco-design requirements for energy using
products and appliances burning gaseous fuels. The regulation on eco-design
requirements has not yet been implemented.

There is no progress to
report regarding procedural measures. Regulation 765/2008 has not yet
been transposed into the Turkish legal order, although its provisions regarding
the control of products entering the EU market are implemented by the Ministry
of Economy in selected areas. There was no progress regarding cultural goods
and firearms.

There was no progress
in the non-harmonised area. The mutual recognition principle has still
not been introduced by Turkey in its trade relations with the EU. This creates
various ad hoc technical barriers to trade, particularly when Turkey introduces
new mandatory technical specifications on products that are in the
non-harmonised area. The provisions regarding the Turkish G mark applicable to
all construction products in the non-harmonised area have been revised.
Products manufactured or lawfully put into free circulation in the EU are
admitted on the Turkish market after affixing the G mark based upon declaration
of performance values. Previously, third country products in free circulation
in the EU were subject to checks on conformity assessment in Turkey. Although
this is a positive step, the revised provision falls short of mutual
recognition, as the Turkish mark must be affixed on products coming from the
EU.

Turkey has not fully
incorporated into its domestic legal order all EU acts for the removal of
technical barriers to trade listed in Annex II to Decision 2/97 of the
EU-Turkey Association Council. Turkey has agreed to a mechanism for the
updating of the Annex to this decision which reflects the acquis adopted
since 1997.

'Free movement of goods'
is one of the eight chapters covered by the conclusions on Turkey adopted by
the Council (General Affairs and External Relations) on 11 December 2006 and
endorsed by the European Council on 14/15 December 2006. As long as restrictions
remain in place on the free movement of goods carried by vessels and aircraft
registered in Cyprus or whose last port of call was Cyprus, Turkey will not be
in a position to implement fully the acquis relating to this chapter.

Conclusion

Some limited progress
can be reported in this chapter. Although alignment is advanced and the quality
infrastructure is reaching a certain degree of maturity, technical barriers to
trade continue to prevent the free movement of goods in violation of Turkey's
obligations under the Customs Union. The new legislative framework on marketing
of products has yet to be transposed into the Turkish legal order. Even if the
situation improved in the last year, there are deficiencies in market
surveillance systems and in their effective implementation. The mutual
recognition principle has not been introduced into Turkey's trade legislation,
which creates practical trade problems. There is no evidence of approval of
unlawful generic applications. However, certain provisions related to data
exclusivity do not provide legal certainty. The area of pharmaceutical products
also suffers from serious delays related to the non-recognition of GMP
certificates and the absence of any other cooperative solution which would
restore a fair, stable and predictable trade environment. The full
implementation of Decision 1/95 is required, which means the abolition of the
remaining import and export licences and of the restrictions on imports of used
products.

4.2. 
Chapter 2: Freedom of
movement for workers

No progress was made
with regard to access to the labour market.

Regarding Turkey's
future participation in the EURES (European Employment Services)
network, the IT infrastructure, electronic services and staff capacity of the
Turkish Employment Agency (ISKUR) are still in need of improvement.

Turkey's social
security institution received expertise and training and thus continued to
increase its capacity to prepare for the coordination of social security
systems.

There are no
developments to report as regards the European health insurance card.

Conclusion

There is hardly any
progress to report on freedom of movement for workers. Preparations for
applying the acquis in this area remain at an early stage.

4.3. 
Chapter 3: Right of
establishment and freedom to provide services

There has been no progress on the right of establishment
and freedom to provide services. Work on the detailed alignment strategy is
ongoing.

Disproportionate requirements are still in place with
respect to the right of establishment.

There has been no progress in the area of freedom to
provide cross-border services. The granting of work and residence permits
to service providers established in an EU Member State remains subject to
registration, licence or authorisation requirements that are incompatible with
the acquis. There is no mechanism to prevent such requirements from
continuing to be introduced in the domestic legal order, which happened in late
2010 with the adoption of a regulation that made the use of service stations
for tachographs in use in vehicles for road transport conditional on the
provider producing a Turkish identity card. Alignment with the Services
Directive still has to be achieved, and a Point of Single Contact for the
provision of services has to be set up.

There is no progress to report on postal services.
The draft postal law has still to be adopted, even though its adoption has
already been considered a few times during the last three years. A broad legal monopoly remains in
place, with no clear indications of further gradual market opening. As for
administrative capacity, an independent regulatory authority still has to be
established.

No progress can be reported on mutual recognition of
professional qualifications. Recognition of professional qualifications
still has to be differentiated from recognition of academic qualifications.
Some regulated professions are still subject to reciprocal recognition.
Nationality and language requirements continue to exist.

'The right of establishment and freedom to provide services'
is one of the eight chapters covered by the conclusions on Turkey adopted by
the Council (General Affairs and External Relations) on 11 December 2006 and
endorsed by the European Council on 14/15 December 2006. As long as
restrictions remain in place on the free movement of goods carried by vessels
and aircraft registered in Cyprus or whose last port of call was in Cyprus,
Turkey will not be in a position to fully implement the acquis relating
to this chapter.

Conclusion

Overall alignment under this chapter remains at an early
stage. No progress can be reported in the areas of right of establishment,
freedom to provide cross border services, postal services and the mutual
recognition of professional qualifications.

4.4. 
Chapter 4: Free movement of
capital

Some progress can be reported on capital movements and
payments during the reporting period. The authorities revised the
implementing regulation on the acquisition of real estate by companies
established in Turkey with foreign capital, easing some application requirements.
The Capital Markets Board adopted a communiqué regulating the listing and the
sale of foreign capital market instruments in Turkey, introducing equal
treatment with local issuers.

The authorities initiated a study to assess the potential
impact of abolishing restrictions on the acquisition of real estate by
foreigners. Turkey's legislative framework in this area is not in compliance
with Article 63 of the Treaty on the Functioning of the European Union. Turkey
still needs to propose an action plan for gradual liberalisation of acquisition
of real estate by foreigners in line with the acquis and to demonstrate
that it is making progress in the implementation of gradual liberalisation,
which is a key element for the accession negotiations in this chapter.

There has been limited progress on removing the remaining
restrictions on foreign direct investments originating from the EU, which is a
priority in this area. A law increasing the limit on foreign ownership in radio
and TV companies from 25% to 50% has entered into force. In addition to radio
and TV broadcasting, restrictions on foreign ownership remained in other
sectors, such as transport, education, and the privatisation of electricity
distribution and generation assets.

Significant efforts are still needed in order to align the
current legal framework on capital movements and payments with the acquis.
There has been no progress in payment systems and the level of overall
alignment with the acquis remains incomplete. Incidents of prevention of
transactions between banks established in the Republic of Cyprus and banks
established in Turkey have been reported.

Limited progress has
been made on alignment with the acquis in the fight against money
laundering. A law is in preparation to address the recommendations of the
Financial Action Task Force (FATF) concerning the criminalisation of financing
of terrorism.

The FATF considers that
Turkey has strategic deficiencies in the area of anti-money laundering and
counter financing of terrorism and that Turkey has not made sufficient progress
to address them. Therefore, in its last plenary on 22-24 June 2011 the FATF
decided to move Turkey into its so-called black list. Turkey has been invited
to adequately criminalise terrorist financing and implement an adequate legal
framework for identifying and freezing terrorist assets. As a consequence, FATF
members may now advise their own institutions to be especially vigilant when
dealing with Turkish institutions, e.g. through 'enhanced customer due
diligence'. The FATF will review the situation in Turkey on 24-28 October 2011.

The Turkish Financial
Crimes Investigation Board (MASAK) – which serves as the Turkish Financial
Intelligence Unit (FIU) – has signed Memoranda of Understanding on the exchange
of information with its counterparts in six countries (Jordan, Luxembourg,
Senegal, United Kingdom, Canada and Belarus).

A slight increase was
recorded in the number of suspicious transaction reports mostly originating
from the banking sector. The number of suspicious transaction reports relating
to the financing of terrorism increased to 186 in 2010, against 49 in 2009.
Results with regard to convictions, confiscations, seizures and freezing of
assets remain limited.

MASAK continued to
provide training to examiners, judges, prosecutors and obliged parties. A
training department was established in November 2010 to provide in-service
training and training for law enforcement officials, examiners and obliged
parties. MASAK's capacity needs to be further improved. Cooperation between
MASAK, law enforcement bodies and the judiciary still has to be strengthened.
Turkey has not ratified the Council of Europe Convention on Laundering, Search,
Seizure and Confiscation of the Proceeds from Crime and on the Financing of
Terrorism (CETS 198), although it signed the Convention in 2007.

Conclusion

There has been some progress on capital movements and
payments, where authorities increased the limit on foreign ownership in media
companies and relaxed the issuance of foreign capital market instruments in
Turkey. Alignment with the acquis capital movements and payments, as
well as payment systems remains incomplete. There has been no progress in the
gradual liberalisation of acquisition of real estate by foreigners, where
various obstacles remain. Restrictions on capital movements remain in place in
a number of sectors, including on direct investments originating from the EU. Enforcement capacity to deal with money
laundering and financing of terrorism needs to be significantly improved. The
legal framework against financing of terrorism remains incomplete and further
efforts are needed as regards alignment with the acquis in this area.

4.5. 
Chapter 5: Public
procurement

There is very limited
progress to report on general principles. The domestic price advantage
clause continued to be frequently utilised in 21% of the overall contract value
above the threshold. Its use is likely to increase following the Prime Ministry
Circular of 6 September 2011, which stipulates that the implementation of the Law
on Public Procurement should favour the participation of domestic bidders. The
value of contracts covered by exclusions and via direct purchase increased by
17% and 22% respectively. 22% of the overall contract value was not subject to
the tender procedures stipulated in the Public Procurement Law. The amendment
to the Public Procurement Law in February 2011 partially revised the
application of the domestic advantage clause. Accordingly, procuring entities
may grant a 15% domestic price advantage to domestic or international bidders
in supply tenders if they offer domestically produced goods. Although this
revision reduces the discrimination against foreign tenderers, the existence of
such a preferential provision remains an obstacle to fair competition. The same
amendment exempted the purchases of the state-owned Turkish Coal and Mine
Management Company from the Public Procurement Law. Turkey will need to repeal
derogations contradicting the acquis, as they reduce competition and
efficiency in public tenders. The legislation needs to be revised in order to
reduce the frequency with which recourse is made to alternative procurement
procedures. Preparations are moderately advanced in this area.

There has been some
progress on the award of public contracts. Following the adoption of the
implementing legislation, the electronic public procurement platform (EKAP)
became operational. The call centre continues to provide advisory services to
the procuring entities. The Public Procurement Authority actively performs a
training function.

The necessary administrative capacity is in place both in the
Public Procurement Authority and in the State Planning Organisation. The public
private partnership policy and support unit was established in the State
Planning Organisation in November 2010. The Ministry of Finance is responsible
for the coordination of policy formulation and implementation, confirmed by a
legal provision, which is a key element of the accession negotiations under
this chapter. The issues of understaffing and operational capacity in the
relevant unit of the Ministry of Finance need to be addressed. In most sectors,
market functionality and competition with regard to other stakeholders
(contracting entities and economic operators) are satisfactory. Preparedness is
highly advanced in this area.

The Turkish Public
Procurement legislation continues to differ from the acquis in a number
of respects. Classical and utilities sectors continue to be subject to the same
public procurement procedures. There is a lack of transparency as regards the
award of concessions and public private partnerships in the absence of a
coherent legal framework. This is a central issue under this chapter. The 2011
thresholds and financial limits for procurement are well above EU levels.

The alignment strategy
on public procurement, which was drafted in 2010, needs to be adopted and
implemented. The draft strategy sets out milestones for eventual full alignment
with the acquis.

No progress can be
reported on alignment with the Remedies Directives. The number of
complaints lodged by dissatisfied tenderers has increased by 45% from 2,954 in
2009 to 4,281 in 2010. The Public Procurement Board reaches a decision regarding
the appeals in not more than 20 calendar days and announces it on the website.
Turkey needs to align the legislation on review procedures with the acquis,
and strengthen administrative capacities and enforcement mechanisms.
Preparations are moderately advanced in this area.

Conclusion

Limited progress can be
reported in this chapter. The institutional set-up is in place, but
administrative capacity needs to be improved. The draft alignment strategy with
a time-bound action plan is ready and needs to be adopted. Turkey still needs
to repeal derogations contradicting the acquis and to further align its
legislation, particularly on utilities, concessions and public-private
partnerships.

4.6. 
Chapter 6: Company law

Significant progress
can be reported on company law. The long pending Turkish Commercial Code (TCC), a key element for the accession
negotiations in this chapter, was promulgated on 14 February 2011 and is due to
enter into force on 1 July 2012. Its full compliance with the acquis is
yet to be confirmed.

A pilot application for
online registry of companies has started at the Mersin Chamber of Commerce. The new TCC obliges each corporation
to have an internet site where corporate announcements, financial statements
and reports are published. New transparency requirements also oblige small and
medium-sized enterprises (SMEs) to establish web-sites and to register their
trade names, trade marks and domain names.

Under the new TCC, the
establishment of a joint-stock and a limited company by a single person will be
possible for the first time in the Turkish legal system. Corporate management
principles of the incorporations open to public shall be identified by the
Capital Markets Board (CMB). Equities corresponding to a particular amount of
the capital of the incorporations may be offered to the public at the
establishment stage. Demerging of companies is regulated for the first time.
Books and end-of-year financial statements of companies and incorporations must
comply with Turkish Accounting Standards. SMEs shall select at least one
certified public accountant or an independent accountant. Until the Board of
Auditing Standards of Turkey is established, national auditing standards shall
be identified in accordance with the international auditing standards. Auditors
may only be independent auditing bodies. They shall be temporarily audited by
the Ministry of Industry and Trade. The CMB's permission will be required for
fund raising to establish incorporation or another company, and with the aim of
increasing company capital. The CMB shall verify that the total funding raised
is used for the declared purpose.

The capacity of the
judiciary, in particular the commercial judiciary, to implement the TCC remains
unknown. Professional business organisations in the provinces have been
organising training sessions on the new code. However, no other training and
capacity building activities have been organised to familiarise the judiciary
and other stakeholders with the new rules.

Some progress can be
reported in the area of corporate accounting. The Turkish
Accounting Standards Board (TASB) published several standards, interpretations
and revisions of a number of international accounting standards (IAS). Training
materials were published for SMEs. Modules for the training of trainers on
International Financial Reporting Standards (IFRS) for SMEs have been prepared
and the first workshop has been held. There was an increase in the number of
staff in TASB. Specialised training was organised for new staff members.

There is no progress to
report on auditing.

Conclusion

Overall, significant
progress was made in this chapter following the adoption of the new Turkish
Commercial Code, which is expected to promote openness, transparency and
adherence to international accounting and auditing standards. However, neither
the legal and institutional framework for auditing nor the necessary enhanced
capacity of the commercial judiciary is yet in place.

4.7. 
Chapter 7: Intellectual
property law

Limited progress can be
reported in the area of intellectual property law. Political will to
effectively enforce industrial property rights needs to be strengthened. There
has been some progress in the dialogue with the authorities in the context of
the IPR Working Group between the EU and Turkey, which held its first meeting
in May 2011. The successful engagement of Turkey in an IPR dialogue with the
Commission is a key element for the accession negotiations on this chapter.

Concerning copyright
and neighbouring rights, adoption of the draft Law on Intellectual and
Artistic Works is still pending. The Directorate-General for Copyrights (DGCC)
in the Ministry of Culture and Tourism (MoCT) has pursued technical studies to
improve the quality, transparency and legal predictability of the use of
banderols, recording and registration services with regard to literature, music
and cinema works. Tracking of piracy has improved as a result of training
organised jointly by the MoCT, the Ministry of Interior (police), anti-piracy
commissions and the judiciary. Anti-piracy commissions are working efficiently,
and specialised IPR police units have conducted successful operations in the
fight against piracy. However, the rules and procedures for the fight against
piracy still need to be simplified.

Some progress can be
reported with regard to implementation of industrial property rights.
The administrative capacity of the Turkish Patent Institute (TPI) has further
improved as a result of tailor-made and jointly organised training programmes.
Jointly organised events also helped improve the dialogue among IPR
stakeholders. Consistency of the TPI final decisions with IPR courts has
improved and appeals decreased. Latest statistics indicate that rejections of
the TPI decisions by IPR courts were down by 30% compared to 2009. The speed of
trademark registrations increased. However, decisions are still not properly
justified and their quality in terms of consistency could still be improved.
Moreover, issues linked to bad faith and similar trade marks and industrial
designs remain unresolved. A positive development in this area is the ongoing
elaboration of new Examination Guidelines for the registration of patents,
designs and trademarks. These will be the result of cooperation between the TPI
and German experts as part of an EU-funded twinning project. There are still
not enough senior and junior experts in the TPI. Existing structured dialogue
mechanisms, such as consultation meetings between the TPI and IPR-holders, are
still too weak to address systemic problems. The conduct of trademark and
patent agents is not supervised. This profession lacks a code of conduct for
regulating ethical principles.

No progress can be
reported on the adoption of industrial property legislation and related
enforcement issues. Turkey has no criminal enforcement measures for
industrial property rights, except for trademarks, and enforcement bodies still
lack the authority to act ex-officio with regard to all industrial property
rights. Draft laws on patents, industrial designs, geographical indications and
trademarks of better quality and more aligned with the acquis were prepared
by the TPI in consultation with stakeholders. However, they have been pending
for a long time at different levels of the law-making process. There is a need
to adopt a law on IPR enforcement procedures in line with the EU Enforcement
Directive.

In 2009 late adoption
of provisions on criminal sanctions for trademark infringements to replace the
annulled trademark decree law created a legal gap and significantly weakened
IPR protection in Turkey. During the reporting period, confiscated counterfeit
goods continued to be returned to the defendants and often to the market,
regardless of risks to health and consumer safety, because they were no longer
the subject of a criminal offence. Despite complaints from both the private and
the public sector, and a joint EU-USA-Japan political démarche on this
matter, the Turkish authorities did not make any particular effort to remedy
the situation. Judicial enforcement remains problematic and lengthy. Expert
witness procedure functions like a parallel judiciary, especially in patent
cases. Only a few courts decide patent cases, without expert witness reports.
Yet, most of the expert witnesses are not sufficiently knowledgeable of the
intellectual property rights criteria. Their independence and impartiality is
not always ensured, particularly in cases of pharmaceutical patents. Judges
need training on patentability criteria, research and examination reports.
Judicial procedures including injunctions, search and seizure warrants are
still lengthy and the decisions of different courts in similar cases are
inconsistent. The number of specialised IPR judges has decreased in recent
years.

Concerning customs
enforcement, the centralised customs database and IT management system is not
used by the customs points to effectively prevent counterfeit goods from
entering the market. The customs officers and controllers have a very poor
knowledge of goods in terms of IPR. Ex-officio seizures are not
effectively triggered. No accurate data are provided about checks and seizures
against counterfeit goods. The customs administration needs enhanced IPR
training and capacity building. Municipalities and gendarmerie officers should
also be involved in enforcement operations and counterfeiting, and their
knowledge and capacity should be further reinforced.

Conclusion

Limited progress can be
reported in this chapter. Adoption of updated draft laws regulating
intellectual and industrial property rights, including deterrent criminal
sanctions is still pending. Adoption of a law on IPR enforcement procedures, in
line with the EU Enforcement Directive, is needed. Civil, criminal and
administrative procedures, including ex-officio measures to combat piracy and
counterfeiting, need to be strengthened. Judicial and customs enforcement
remains weak; enhancement of the capacity of the judiciary and of the customs
administration with a view to more effective action is crucial. Closer
coordination and cooperation among IPR stakeholders and public bodies is
essential, as well as general awareness campaigns on the risks of IPR
infringements. The opportunity of an effective IPR dialogue with the EU through
the recently launched IPR Working Group could contribute to an improvement in
IPR protection in Turkey.

4.8. 
Chapter 8: Competition
policy

Based on an advanced level of alignment in the anti-trust
field, Turkey made some further progress in this area. The Competition
Authority adopted implementing legislation on mergers (including guidelines on
merger remedies), thereby bringing about closer alignment with EU merger rules.
The scope of the Turkish Competition Act still does not include banking mergers
and acquisitions resulting in combined market shares below 20%. Turkey has not
yet transposed the acquis on horizontal cooperation agreements and de
minimis rules. Turkey is still expected to incorporate rules on public
undertakings and undertakings enjoying exclusive and special rights into its
domestic legal system.

The Competition
Authority's overall administrative capacity remains high. It continued to
display a satisfactory level of administrative and operational independence,
and a commitment to high-level training for its staff. The Authority further
strengthened its track record in enforcing antitrust rules with a number of
landmark cases, particularly in the banking and automotive sectors.

Substantial progress can be reported in the area of State
aid. Following the adoption of the State aid law an informal inventory of
aid schemes has been established. The Board of the State Aid Monitoring
Authority has been appointed and competent staff have been transferred from the
Treasury. Training curricula are now being implemented. The Authority is now
fully set up and has started drafting the relevant implementing legislation.
There remain a number of schemes in need of alignment with Customs Union rules,
in particular the stimulus measure adopted in July 2009, notably by providing
for caps on the total amounts of aid received, as well as the regime regarding
free zones. The assessment of State practices in support of the steel sector
between 2001 and 2006 revealed incompatibilities with the 1996 ECSC – Turkey
Free Trade Agreement.

Conclusion

In the field of antitrust and merger control, Turkey's
alignment record is good. The Competition Authority enforces antitrust rules
effectively, with a satisfactory level of independence. Substantial progress
has been made in the area of State aid. In particular the State Aid Monitoring
Authority is now set up. However, further efforts are still required in the
area of alignment of existing State aid schemes.

4.9. 
Chapter 9: Financial
Services

There has been good
progress in the area of banks and financial conglomerates. The Banking
Regulatory and Supervisory Authority (BRSA) requested the banking sector to use
BASEL II standards for reporting and review purposes during a transition period
between 1 July 2011 and 30 June 2012. These new Basel II rules are not
used at this stage to sanction non-compliance. On 2 October 2010, the BRSA
published an implementing regulation on the issuance of debt instruments by the
banking sector, setting individual issuance limits per bank on the basis of
their capital adequacy ratios as well as their deposit base. The BRSA
introduced new macro-prudential restrictions on housing loans and credit cards
on 17 and 18 December 2010 to strengthen financial stability. On 1 March 2011,
the BRSA also ended the implementation of relaxed loan provisioning and
restructuring rules, which were introduced temporarily during the global
economic crisis. The BRSA increased provisioning and capital adequacy
requirements for general purpose consumer credits, excluding housing and car
loans, to reduce rapid credit growth. Overall, in the area of banks and
financial conglomerates Turkey is well advanced.

Some progress can be reported on insurance and
occupational pensions. With a view to adopting Solvency II in due course,
the Undersecretariat of Treasury initiated the fifth Quantitative Impact Study
(QIS5) on 10 December 2010, in which all market agents were obliged to
participate. While the calculation of the basic solvency margin follows the EU's
Solvency I principles, Turkish regulation even contains a second risk-based
methodology to define the required capital level and obliges market
participants to meet the higher requirement. The Treasury published an
implementing regulation detailing the rules and procedures applicable for the
supervision and audit of insurance sector and private pension companies. The
regulation defines the responsibilities and rights of public authorities, as
well as the sector, while introducing ethic rules for relevant Treasury staff.
There has been no progress in the establishment of an independent regulatory
and supervisory authority for the insurance sector. Further progress is needed,
particularly in the minimum amounts of cover in third party liability insurance
for motor vehicles. The level of alignment with the acquis in the insurance
sector remains incomplete. Turkey already enjoys a high level of alignment with
the acquis on financial market infrastructure.

Some progress can be reported in the areas of securities
markets and investment services. On 23 October 2010, the Capital Markets Board of Turkey (CMB), which is
the competent supervisory authority for the securities market, adopted a new
communiqué updating the requirements for the listing and sales of capital
markets instruments issued abroad in Turkey. As a consequence, the CMB
abolished the requirement to issue depository receipts in the case of a sale of
foreign common stocks through public offerings in Turkey. Moreover, CMB allowed
the sale of foreign common stocks not listed in their country of origin.
However, foreign issuers are obliged to appoint a legal representative in
Turkey before issuing capital market instruments. If foreign institutions
designate a custodian in Turkey and issue depository receipts, then the
custodian can represent the foreign shareholders. Like domestic issuers,
foreigners are also obliged to prepare their financial statements either in
compliance with Turkish accounting standards or international accounting
standards. In parallel, foreign issuers are also subject to external audit
provisions applicable to domestic issuers. Further efforts are needed, in particular as regards
investor compensation schemes, market abuse and undertakings for collective
investment in transferable securities (UCITS). CMB allowed portfolio management companies to buy and sell
units of investment funds directly to retail customers, including funds which
are founded or managed by other companies. No progress can be reported regarding prospectus
requirements.

'Financial services' is one of the eight chapters covered
by the conclusions on Turkey adopted by the Council (General Affairs and
External Relations) on 11 December 2006 and endorsed by the European Council on
14/15 December 2006. As long as restrictions remain in place on the free
movement of goods carried by vessels and aircraft registered in Cyprus or whose
last port of call was in Cyprus, Turkey will not be in a position to implement
fully the acquis relating to this chapter.

Conclusion

There has been some progress in the area of financial
services. BASEL II standards for reporting are provisionally applied by the
banks, while the domestic requirements for the listing and sales of capital
markets instruments were improved. The alignment with the acquis on
banks and financial conglomerates, as well as in the area of financial market
infrastructure, is already at a high level. However, overall alignment with the
acquis is not yet complete, particularly in the insurance sector, as
well as in the area of securities, markets and investment services, where more
progress is needed.

4.10. 
Chapter 10: Information
society and media

Some progress can be reported in the field of electronic
communications and information technologies. The Information and
Communication Technologies Authority (ICTA) continued to align with the
electronic communications acquis, which is a key element in the
accession process. In particular, implementing regulations regarding customer
rights and quality of services were introduced. The transparency and
accountability of the regulator's activities improved. Several inconsistencies
remain in the main Electronic
Communications Law. Some provisions on authorisation, spectrum management, access
and interconnection, retail tariff regulation, and market analysis procedures
diverge from the EU framework. Primary legislation needs to be simplified.
Further clarifications on some aspects of spectrum management, including
digital broadcasting and digital dividend policy, or broadcasting frequencies
at the border are needed. The scope and implementation of universal service
obligations are not in line with the acquis. The authorisation of mobile
virtual network operator services (MVNO) and issuance of the implementing
regulation on authorisation of broadband wireless access services operators are
pending.

Significant progress has been made on introducing
competitive safeguards, in particular number portability and regulatory cost
accounting, but enforcement of rights of new entrants in fixed voice and
broadband markets is proving to be difficult in practice, resulting in limited
competition. Competition has been
more active in the mobile market, but communication charges imposed on mobile
operators remain high. Limited progress can be reported on number portability
on fixed line services. The administrative independence, duties and powers of
the National Regulatory Authority (NRA) are well established by law, but some
aspects of independence, such as effective structural separation of the
regulatory functions from activities associated with ownership or control,
appointment and dismissal rules of the board, independence from State bodies,
still need to be ensured. Transparency in the decision making process also
needs to be further improved.

As regards information society services, limited
progress towards legislative alignment can be reported. Implementing
regulations regarding the names of internet domains and rules of coded or
encrypted communication were adopted. Turkey has not yet transposed the acquis
on the protection of conditional access services, nor signed up to the European
Convention on the legal protection of services based on conditional access.
There are discrepancies between the law on electronic signature and the EU
Directive. Moreover, Turkey has yet to adopt legislation transposing the
E-commerce Directive, although a twinning project exists for this directive.
The law on internet content and the conditions under which internet providers
can operate are not in line with international standards protecting freedom of
expression and may affect citizens' rights relating to Internet access.

As regards audiovisual
policy, the Turkish broadcasting legislation, the 'Supreme Board of Radio
and Television (RTÜK) Law', entered into force in March 2011. The law largely
aligns legislation with the Audiovisual Media Services Directive (AVMSD), which
is a key element for the accession negotiations in this chapter. However, the
law fails to comply with the principle of freedom of reception and
retransmission of television broadcasts which is provided for in the AVMSD.

The law increases the
proportion of shares that foreigners can own in Turkish broadcasting companies
to 50%. It opens the way for broadcasting in different languages and dialects
other than Turkish country-wide. Licences will be granted for a ten-year period
and the TV frequency allocation tenders are due to be launched in two years'
time. The law does not resolve all concerns under the old legislation related
to the interpretation of certain articles as regards bans on broadcasting and
sanctions imposed on broadcasters. The RTÜK, at the beginning of 2011 and based
on the old law, issued warnings and fines to broadcasters for failing to
respect the privacy of historical characters, discussions on homosexuality or
homosexual scenes in films/series. (See the section on Freedom of Expression
under part 2 – Political criteria).

As regards broadcasts
in languages and dialects other than Turkish, private broadcasters continued
their broadcasts without restrictions on content, time limits and sub-titling
or consecutive translation requirement. Eighteen radio/TV enterprises broadcast
in languages other than Turkish. There were no broadcasts at national level.
The broadcasts are mainly in Kırmanji, and some also use Zaza and Arabic.
Public broadcaster TRT continued its 24-hour Kurdish broadcasts as well as its
24-hour Arabic broadcasts, targeting mainly the Middle East. Euronews
broadcasts in Turkish continued.

As regards the operating
methods of RTÜK, its decisions are published on the website to ensure
transparency. The forum for consultation with the broadcasters continued, as
did preparations for the transition to digital broadcasting. The switchover for all analogue broadcasts is
scheduled for 31 December 2012, whereas the switch-off date has been postponed
to 31 December 2014 due to complaints from broadcasters.

Conclusion

Turkey has made some progress in the area of electronic
communications, in particular by implementing regulations, but further efforts
are required for the alignment and enforcement of laws and regulations.
Application of regulations often remains problematic, resulting in limited
competition in the fixed voice and broadband markets in particular.
Transparency and independence of the regulatory authority need strengthening.
Limited progress can be reported on legislative alignment regarding information
society services. While there has been good progress in the area of audiovisual
policy, alignment with the AVMSD, in particular regarding jurisdiction and
freedom of reception and retransmission, needs to continue.

4.11. 
Chapter 11: Agriculture and
rural development

Some progress can be
reported on legislative alignment with the Common Agricultural Policy (CAP).
Turkey carried out a restructuring of the Ministry of Agriculture and Rural
Affairs (MARA). A decree concerning the organisation and duties of the Ministry
of Food, Agriculture and Livestock (MoFAL) entered into force in June 2011 and
it represents an important step in developing the administrative structures
necessary to implement the CAP.

Limited progress has
been observed on horizontal issues. Efforts have been made to develop
the capacity relating to the Farm Accountancy Data Network (FADN), which has
been expanded to twelve provinces, and data collection started in 600 farms in
those provinces in March 2011. Regarding agricultural statistics, which are a
key element for the accession negotiations in this chapter, the lack of an
adopted strategy remains a shortcoming. As regards direct support to producers,
Turkey has made no progress in the development of a strategy on the adjustment
of its agricultural support policy to the CAP, which is another key element for
the accession negotiations in this chapter.

As regards the
agricultural budget in 2011 a slight increase was observed, in particular in
area-based payments and livestock headage payments, whilst deficiency payments
decreased somewhat. Legislation on the principles and rules relating to Good
Agricultural Practice has been adopted. Limited progress has been made
regarding the preparations for the integrated administration and control system
(IACS) despite the fact that the strategy to develop the system of Land
Identification and the National Farmer Registration System was adopted in 2010.

The de facto
import ban on live cattle, beef meat and derivate products continues to be only
partially and temporarily lifted. Further efforts still need to be made by
Turkey in order to fully implement its bilateral obligations under the trade
agreement for agricultural products. (See also Chapter 12
– Food safety, veterinary and phytosanitary policy). The complete removal
of the ban remains a key component in the accession negotiations on this
chapter.

Concerning the Common
Market Organisation, there is no progress to report.

Significant progress
can be reported as regards rural development. Turkey has continued to
strengthen its Instrument for Pre-Accession Assistance for Rural Development
(IPARD)-related structures and in August 2011 achieved conferral of management
of EU funds for three measures across 17 provinces. This has paved the way for
Turkey to operate EU-financed investments in agricultural holdings as well as
in processing and rural development projects. This also marks a key element for
the accession negotiations in this chapter. Compliance with the EU
accreditation criteria is being verified for three remaining provinces included
in the first phase of the IPARD implementation. In parallel, the Managing
Authority has developed its capacity to operate agri-environmental measures and
those relating to bottom-up local rural strategies and to the setting up of
producer groups, included in the second stage of IPARD implementation.

Some progress can be
reported on quality policy. Turkey has registered Scotch Whisky as its
first EU Geographical Indication. Further efforts are still needed to harmonise
this area with the acquis. As regards organic farming, Turkey
adopted legislation on the principles and implementation of organic
agriculture. Compliance of this legislation with the acquis has yet to
be confirmed.

Agriculture and rural
development is one of the eight chapters covered by the conclusions on Turkey
adopted by the Council (General Affairs and External Relations) on 11 December
2006 and endorsed by the European Council on 14/15 December 2006. As long as
restrictions remain in place on the free movement of goods carried by vessels
and aircraft registered in Cyprus or whose last port of call was in Cyprus,
Turkey will not be in a position to fully implement the acquis relating
to this chapter.

Conclusion

Overall, some progress
has been made under this chapter; however, further steps are pending in a
number of key areas. Significant progress has been made in the implementation
of the IPARD programme through the initial Commission Decision to confer the
management of EU funds, as well as preparations achieved for the second phase
of the IPARD Programme. Capacities relating to agricultural statistics and FADN
are being developed. However, agricultural support policy differs substantially
from the CAP and there is still no strategy for its alignment. The failure to
fully remove barriers to beef imports also constitutes a major shortcoming.

4.12. 
Chapter 12: Food safety,
veterinary and phytosanitary policy

Some progress towards
transposition and implementation of the acquis has been observed. Turkey
restructured the Ministry of Agriculture and Rural Affairs (MARA): a decree
concerning the organisation and duties of the Ministry of Food, Agriculture and
Livestock (MoFAL) entered into force in June 2011. The framework law on
veterinary services, plant health, food and feed has entered into force.
However, some problems have arisen due to the time gap between the entry into
force of the law and its implementing legislation.

Some progress was
observed on the transposition and implementation of the acquis in the
field of veterinary policy. The official control system has been
strengthened; however, further alignment is still required in order to bring
the overall system fully into line with the EU acquis. Progress has been
observed on the legislative alignment in the area of control systems for
imports. A regulation concerning the tasks and working principles of veterinary
border inspection posts has entered into force. However, implementation is
still incomplete. Three land and two seaport border inspection posts (BIPs), as
well as the BIP at Sabiha Gokcen Airport in Istanbul, are still not fully functional.
Veterinary and phytosanitary checks need to be intensified at the BIPs, mainly
by introducing additional specialised staff.

Turkey has continued
its efforts to bring the system for identification and registration of bovines
and their movements into line with the acquis. However, further
improvements are required for it to fully comply with the EU system.
Implementation of the identification and registration of ovine and caprine
animals has continued. Identification and registration systems for animals are
a key element for the accession negotiations in this chapter. Turkey maintained
its fight against animal diseases, particularly against foot and mouth disease
(FMD), which is a key element for the accession negotiations in this chapter. A
regulation on the notification of animal diseases and a regulation on the
control of FMD have entered into force. FMD contingency plans are still to be
adopted. The administrative capacity of MARA has increased as a result of
training events and simulation exercises. The implementation of an intensive
FMD vaccination programme, accompanied by strict measures governing animal
movement between Thrace and Anatolia, has continued and Thrace has kept its
status of an FMD- free zone with vaccination. However, the number of FMD
outbreaks in Anatolia has remained a cause for concern. Turkey made no progress
as regards transmissible spongiform encephalopathy (TSE), which is a key
component in the accession negotiations on this chapter. Timely notification of
animal diseases, which is another key element for the accession negotiations in
this chapter, has continued. Turkey has made no progress as regards control of
non-commercial movements of pet animals.

Procedures have been
further improved with regard to the implementation and follow up of the
national residue monitoring plan and the control of veterinary medicinal
products. Laboratory performance has increased significantly; however, the
scope of testing has remained limited.

The de facto
import ban on live cattle, beef meat and derivate products continues to be only
partially and temporarily lifted. Further efforts are needed by Turkey to fully
implement its bilateral obligations under the trade agreement for agricultural
products (see also Chapter 11 – Agriculture and rural development).
Turkey has made no progress on zootechnical issues or animal welfare, the
latter being a key aspect of the accession negotiations in this chapter. Turkey's
current system for financing veterinary inspections and controls is not in line
with the acquis.

As regards placing
on the market of food and feed and animal by-products, some progress has
been observed. Administrative capacity has been strengthened by means of
intensive training programmes. Annual inspection and monitoring programmes have
been implemented. Initial steps for developing a national upgrading plan for
agri-food establishments, which constitutes a key element for the accession
negotiations in this chapter, have started. Responsibilities have been assigned
to different departments and institutions, which has led in particular to more
effective official controls, including those for animal products.
Implementation of a fully compliant system for all official controls is a key
element for the accession negotiations in this chapter. Hygiene guidelines have
been prepared and they have been implemented more widely in the sectors.
However, legislation transposing the hygiene package, and including specific
rules for animal products, has yet to be adopted. Legislation on feed hygiene
has not yet entered into force. No progress was observed with regard to rules
for animal by-products or the funding of checks.

Regarding food
safety rules, there have been further advances in legislative alignment and
implementation on labelling, additives and purity criteria, extraction
solvents, quick frozen foodstuffs, food for particular nutritional uses,
ionising radiation and mineral waters. Transposition in the area of
flavourings, food supplements, food enzymes, contaminants and novel foods has
not yet been completed. No progress has been observed in the area of food
contact materials.

No progress can be
reported regarding specific rules for feed.

Some progress has been
made on phytosanitary policy with the main focus on plant protection
products (PPPs). Legislation concerning the wholesale, retail sale and storage
of PPPs, the application methods and principles of PPPs, the licensing of PPPs,
classification, packaging and labelling of PPPs, control of PPPs as well as
methods and principles of PPP production places have entered into force.
Alignment has further improved in respect of non-authorised active substances.
A regulation concerning the plant passport system and registration of the
operators has entered into force and the implementation of the plant passport
system in pilot species has started. Progress in the area of seed and
propagating materials remained very limited. The software system for variety
registration and seed certification has become operational. Limited progress
has been made on harmful organisms. A regulation on plant quarantine fumigation
has entered into force.

Legislation has been
published in the area of genetically modified organisms; however, it is
not aligned with the EU acquis.

Conclusion

Progress has been
achieved towards transposition and implementation of the acquis in this
chapter. The restructuring of the Ministry of Agriculture and Rural Affairs is
a positive step towards strengthening the official control system. However,
further alignment is needed in order to bring the overall control system fully
into line with the EU acquis. Considerable effort is needed in the area
of animal health and in bringing agri-food establishments into compliance with
the EU hygiene and structural requirements.

4.13. 
Chapter 13: Fisheries

There has been no substantial progress in alignment with
the fisheries acquis. Turkey restructured the Ministry of Agriculture
and Rural Affairs (MARA): a decree concerning the organisation and duties of
the Ministry of Food, Agriculture and Livestock (MoFAL) entered into force in
June 2011. The establishment of a Directorate-General for Aquaculture and
Fisheries is an important step towards setting up administrative structures.
However, the revised Law on Fisheries, which would complete the necessary legal
framework for the implementation of the Common Fisheries Policy, has not yet
been adopted.

There has been some progress in the field of resource
and fleet management. The Fisheries Information System (FIS) has been
improved to include monitoring of the eel quota, and the issuing of fishing
licences in the framework of the Council Regulation on illegal, unreported and
unregulated (IUU) fishing. Recording of fishing vessels by the FIS has been
linked to the system of the Undersecretariat for Maritime Affairs. The module
for the biological parameters information system has been developed, but data
entry has not started yet. Further enhancement is required in order to achieve
full functionality of the FIS.

The total number of fisheries port offices is now 40,
following the addition of four newly constructed and equipped port offices. In
the area of resource management, the capacity of the MoFAL has improved through
the upgrading of technical skills in stock assessment and the economic tools
for fisheries management. Action Plans have been developed for four surrounding
seas, eco-system fisheries management, integrated data collection, fleet
capacity management and a strategic plan for fisheries research. Preparation of
national action plans based on those plans and their effective implementation
are crucial for sound, integrated and sustainable fisheries management.

Concerning inspection and control, limited progress
can be reported. As regards control
policy in the framework of the Bluefin tuna fisheries in the International
Commission for the Conservation of Atlantic Tunas (ICCAT), Turkey has
implemented the regional observer scheme, and the Coast Guard and Naval Forces
have carried out inspections under the ICCAT joint scheme of international
inspection. However, additional efforts are needed to improve monitoring and
compliance in the fisheries sector in order to ensure its sustainability.

No progress can be reported on structural action, market
policy and State aid.

Limited progress can be observed as regards international
agreements. Turkey signed the FAO agreement on Port State Measures to
prevent, deter and eliminate IUU Fishing. Some progress has been made in the
implementation of ICCAT Recommendations. However, further efforts are needed in
order to comply with some ICCAT requirements, in particular as regards data
collection and reporting procedures. As the United Nations
Convention on the Law of the Sea (UNCLOS) provisions are implemented in a
number of Community policies, including the Common Fisheries Policy, ratification
of UNCLOS by Turkey would improve cooperation with the EU in the area of
fisheries and maritime policy.

'Fisheries' is one of the eight chapters covered by the
conclusions on Turkey adopted by the Council (General Affairs and External
Relations) on 11 December 2006 and endorsed by the European Council on 14/15
December 2006. As long as restrictions remain in place on the free movement of
goods carried by vessels and aircraft registered in Cyprus or whose last port
of call was in Cyprus, Turkey will not be in a position to implement fully the acquis
relating to this chapter.

Conclusion

Overall, some progress
can be reported under this chapter. Some progress has been made on setting up
administrative structures as well as on resource and fleet management. However,
further efforts are still needed in the fields of inspection and control,
implementation of international agreements, legislative alignment, market
policy, structural action and State aid.

4.14. 
Chapter 14: Transport policy

Some progress
can be reported in the area of road transport. The regulation on
transport of dangerous goods has entered into force, but the transition periods
for full implementation are likely to be long. As regards the implementation of
the regulation on digital tachographs for the international fleet, a website is
available for the promotion and management of the whole process, including
online card applications. The regulation does not cover the domestic fleet. Accessibility
of transport for people with reduced mobility requires the establishment of an
institutionalised approach among central and local authorities. Concerning road
safety, as of August 2011, around 48,000 commercial vehicles manufactured
before 1986 have been removed from the road transport market. Sustained efforts
are needed in this area.

The institutional and technical capacity for implementing
the rules on dangerous goods and digital tachographs is not at the required
level. Poor cooperation between the relevant authorities is leading to setbacks
in regulating work and rest periods, driver training according to EU standards,
and roadside technical checks of commercial vehicles. Overall, preparedness in
the road transport sector is advanced, but technical capacity and human
resources require further improvements.

There has been little progress in rail transport. Primary responsibility for EU alignment –
which requires substantial reforms in all aspects of railways - is left to the
incumbent operator, Turkish State Railways (TCDD). The alignment process could
be improved through the direct leadership of the Ministry of Transport.
Constructive involvement of major stakeholders in the railways sector could
contribute to the process.

TCDD is carrying out a major infrastructure investment
programme in high speed railway lines. Further to Ankara-Eskişehir, the
Ankara-Konya high speed train service is now operational. New lines are
expected to improve service quality and help the rejuvenation of Turkish
railways. However, increased operating costs place an additional financial
burden on the public budget, which requires cost based accounting and the
introduction of a public service obligation system. The intensification of rail
traffic calls for improvements in the safety of the rail operations. The
establishment of a safety authority, accident investigation body as well as
safety management systems for railway operators are requirements under EU
legislation. Overall, preparation in rail transport is at an early stage.

There is no inland waterways transport in Turkey.

Some progress can be reported in the area of air
transport. An EU-Turkey horizontal aviation agreement, which will
constitute a new legal basis for relations in the aviation field, is at a final
stage. Turkey has reiterated its willingness to be integrated in the aviation
architecture that will emerge from the single European sky initiative. In that
context, a Turkish pre-accession strategy for the aviation sector has been
finalised, covering a set of priority actions on human resources, environment,
market regulation and aviation safety. The Directorate-General for Civil
Aviation (DGCA) has issued instructions on the language proficiency of
personnel, on the rules to control air vehicle path length and on rules to
determine methods related to the creation and approval of minimum equipment
list. The DGCA has published a flight operations inspector's handbook. DGCA has
also issued a regulation for a computerised reservation system, which has been
widely used in the market.

While the national regulation on allocation of slots is
largely based on the relevant acquis and IATA Worldwide Scheduling
Guidelines, efforts are needed in order to improve implementation, particularly
as regards the independence of the slot coordinator.

Despite an active training policy, the human resources
capacity of DGCA is becoming a matter for serious concern given the robust
growth of the aviation sector. The institutional and technical capacity of DGCA
did not follow the pace of sector growth and there is high staff turnover.

More efforts are needed in the implementation of air
traffic management acquis, if
Turkey intends to be a part of Single European Sky. Currently, there are no
developments concerning the exchange
of flight data and requirements for the application of a flight message
transfer protocol used for the purpose of notification, coordination and
transfer of flights between air traffic control units. Moreover, air traffic management is still suffering from a
lack of regional cooperation. The lack of communications between air traffic
control centres in Turkey and the Republic of Cyprus is seriously compromising
air safety in the Nicosia flight information region. An operational solution
needs to be found urgently. Discussions are ongoing within ICAO. No agreement
has so far been reached between the parties on this issue.

Concerning the capacity to implement the EU acquis,
including control measures in line with EU standards, and the continuation of
legislative and administrative alignment with the transport acquis in
the area of air safety, Turkey is expected to accept the European Aviation
Safety Agency as the competent body to carry out standardisation inspections in
the field of air traffic management/air navigation services. Overall, the level
of preparedness in civil aviation is increasing, but implementation of the
pre-accession strategy will enable further progress.

Some progress can be reported in the field of maritime
transport. Turkey has volunteered for International Maritime Organisation
(IMO)'s member audit scheme (VIMSAS). This is a significant improvement, as
VIMSAS requires the IMO member states to sign up to all relevant maritime
conventions. Turkey also adopted a VIMSAS strategy which is reinforced by a
board set up by Minister's decision establishing a mechanism for monitoring and
adoption of all maritime conventions. Turkey took steps to become a party to
SOLAS-78, SOLAS-88, the Convention on facilitation of international maritime
traffic (FAL), the international Convention on the control of harmful anti-fouling
systems on ships (AFS) and Marpol Annexes III and IV, using VIMSAS as leverage.

Although vessel traffic monitoring information systems
(VTMIS) for İzmit are already operational, the ports of Mersin, İzmir
and İskenderun are not expected to be operational until 2012. The
detention rate of Turkish vessels was 4.3% in 2010 compared to 1.78% for the
EU average in 2010. Turkey is on the white list of the Paris Memorandum of
Understanding.

Ship sourced emissions, maritime emergency response, reception of waste from ships and handling of
dangerous goods are areas that call for closer scrutiny. Overall preparedness
in maritime transport is advanced, but Turkey needs to actively continue to
follow up on recent legislative packages adopted by the EU.

There are no particular developments to report in the area
of combined transport.

Some progress can be
reported on satellite navigation. Turkey is increasingly involved in the
EU programmes on Global Navigation Satellite Systems (GNSS). The Ranging and
Integrity Monitoring Stations installed in Ankara in the framework of the
European Geostationary Navigation Overlay System is now operational and Turkish
organizations can participate in the Euromed GNSS II project.

'Transport policy' is one of the eight chapters covered by
the conclusions on Turkey adopted by the Council (General Affairs and External
Relations) on 11 December 2006 and endorsed by the European Council on 14/15
December 2006. As long as restrictions remain in place on the free movement of
goods carried by vessels and aircraft registered in Cyprus, or where the last
port of call was Cyprus, Turkey will not be in a position to implement fully
the acquis relating to this chapter.

Conclusion

Except for the railway sector, some progress can be
reported in the alignment of the transport sector. Alignment in maritime and
land transport remain at an advanced level and air transport is following at a
slower pace. In the maritime sector, member audit scheme within the
International Maritime Organisation (VIMSAS) is expected to create positive
results in order to become a party to international conventions. Some progress
can be reported on satellite navigation. The lack of communications between air
traffic control centres in Turkey and the Republic of Cyprus continues to
seriously compromise air safety. Human resources and technical capacity to
implement the acquis remain limited in many institutions and require
reinforcement. The implementation capacity is limited, particularly for
dangerous goods in land and maritime transport.

4.15. 
Chapter 15: Energy

Limited progress has
been made with regard to security of supply. The parallel trial
interconnection of the Turkish power grid with the European Network of
Transmission System Operators for Electricity (ENTSO-E)'s Continental European
Synchronous Area was initiated and entered its second phase, in which
non-commercial energy exchanges will be carried out between the Turkish and the
Greek and Bulgarian transmission system operators in both directions. The
Project Support Agreements (PSA), for the Nabucco project, which aim at
ensuring the necessary regulatory framework and investment guarantees in
transit countries, were signed in June 2011. In September 2010 Iraq-Turkey
Crude Oil Pipeline Agreement was extended for 15 years with additional five
years. However, fair and non-discriminatory rules for gas transit have not yet
been implemented. At the same time, Turkey should be encouraged to deepen its
gas market, increasing liquidity and contract flexibility. Such a process would
lead to the emergence of an 'energy hub', the existence of which would achieve
greater energy security. Implementing measures for gas transit in Turkey for
Azerbaijan gas would constitute an important step in the opening of the
Southern Gas Corridor. No development can be reported concerning the Law on the
Establishment of the National Oil Stock Agency and its organisation.

Concerning the internal energy market, good progress
can be reported on electricity. Some regulations in the electricity sector were
amended in order to streamline switching procedures and minimise technical and
commercial losses. The Energy Market Regulatory Authority (EMRA) adopted two
implementing regulations on the use of small-scale renewable sources in
electricity generation and electricity import and export, which are designed to
promote cross-border trade and investments by small-scale consumers. Regulation
on tariffs was amended to extend the coverage of technical and commercial
losses to all consumers. The amendment of regulations, in particular on
capacity hiring, improved the transparency of the electricity network. The
threshold for eligible consumers was further reduced to 30,000 kWh for 2011,
which corresponds to a theoretical market opening of 75%. The process for
privatising power generation facilities was initiated. The day-ahead market
implementation has been set to be fully in operation in December 2011. However,
the privatisation of electricity distribution assets is yet to be completed.
The incentive-based pricing mechanism is not properly implemented. The
electricity market law remains to be amended.

There is some progress to report in the gas sector. EMRA
adopted a regulation on the usage of underground gas storages. The eligibility
threshold was further reduced to 700,000 metres3 for 2011. Tendering
processes for gas distribution continued. However, a recent tender to transfer
six billion cubic metres (bcm) of natural gas purchase from the Blue Stream
Agreement from the incumbent gas utility BOTAS to private companies failed to
attract any offers. With a share of 86%, BOTAS still maintains a near-monopoly
position on imports. Deadlines set by the Natural Gas Market Law to restructure
BOTAS have not been met, while conditions for new market entrants are becoming
less clear. No progress has been made on revising the natural gas market law
and developing a new gas strategy, which are measures that have been planned
for several years.

Good progress can be reported in the area of renewable
energy. The law amending earlier renewable energy legislation was adopted;
incentives have been introduced in the form of a guaranteed price for
electricity generation from renewables, differentiated by type of renewable.
Additional incentives are provided if the equipment used in generation facilities
is domestically produced; compliance of these incentives with trade rules is
yet to be confirmed. Implementing regulations on the usage of the solar energy
and the promotion of domestic equipments have been adopted. A regulation on the
process for dealing with multiple
applications for the same region and the transformer station of wind power generation facilities has been
adopted with a view to finalising pending applications. By the end of 2010,
Turkey was producing 26,4% of its electricity from renewable energy sources.
However, further efforts are needed to set up a regulatory environment that
would foster the increased use of renewable energy sources in all sectors, i.e.
electricity, heating and cooling and transport.

Some progress can be reported in the energy efficiency
field. Regulations on the energy performance of buildings and on ecodesign
requirements for energy-related products entered into force. Authorisation for
energy efficiency services, including public awareness efforts, has continued.
The industrial sector was supported through efficiency-enhancing projects and
voluntary agreements. International financial institutions showed increasing
interest in financing energy efficiency projects in Turkey. No progress can be
reported on the draft energy efficiency strategy with specific targets. Further
progress is needed in order to bring the legislation into line with the acquis
requirements, in particular on promoting high-efficiency cogeneration.

Limited progress can be reported on nuclear energy,
nuclear safety and radiation protection. No developments can be reported on
the adoption of a framework nuclear law which is supposed to ensure a high
level of nuclear safety in line with EU standards. Compliance of the existing
regulations with the EU acquis still needs to be verified. Turkey
does not participate in the IPA horizontal programme on nuclear safety and
radiation protection, which would make an assessment on the level of
transposition of the EU acquis possible. Turkey has not acceded to the
Joint Convention on the safety of spent fuel management and on the safety of
radioactive waste management. The law regarding the nuclear agreement between
Turkey and Russia on cooperation in relation to the construction and operation
of a nuclear power plant at the Akkuyu site entered into force. Turkey and
Japan signed a memorandum of understanding to construct Turkey's second nuclear
power plant in Sinop, on the Black Sea Coast, although ensuing negotiations
have temporarily stalled following the nuclear crisis in Japan.

Conclusion

Progress in the field of energy has been uneven. While
there has been good progress on the internal market for electricity and on
renewable energy, further efforts are required in order for the legislation to
be fully compliant with the acquis. The transparent and cost-based
pricing mechanism for electricity remains to be properly implemented. A
competitive environment and legislative developments in the natural gas sector
are still lacking. The independence and capacity of the regulatory authority
need to be strengthened further. Measures are needed in particular to ensure
the highest possible standards for nuclear safety, security, safeguards and
non-proliferation. Developments on security of supply, and energy efficiency
also require further efforts.

4.16. 
Chapter 16: Taxation

Limited progress can be reported in the area of indirect
taxation. Turkey's value-added tax legislation is partially in line with
the acquis. Further alignment is needed, particularly regarding structure,
exemptions, special schemes and the application of reduced rates.

Some progress can be reported with regard to excise
duties. In line with the Action Plan adopted on 18 May 2009, Turkey decreased
the Tobacco Fund on imported non-processed tobacco by 25% as of 1 January 2010.
This is a positive step towards full abolition of discriminatory practices in
the taxation of tobacco. The Tobacco Fund sets a special duty on imported
tobacco and cigarettes, which is not applicable to domestic products. However, discrepancies
between Turkish legislation and the acquis continue to exist in terms of
the structure of the excise duty on tobacco and tobacco products. Turkish
legislation lays down ad valorem rates and a minimum excise duty, whereas
specific excise duties are lacking.

There is no progress to report with regard to the taxation
of alcoholic beverages. Specific duties levied on alcoholic beverages are
differentiated on the basis of the type of product, rather than the alcoholic
content. The defined levels are higher for categories of products which are
primarily imported than for categories of products which are primarily produced
domestically. The action plan adopted on 18 May 2009 had set clear mutually
accepted milestones with a view to the total elimination of discriminatory
taxation. In October 2010, the excise duty rate on all spirits was increased by
30% across the board. In contradiction with the Action Plan, this increased the
differentials in absolute figures between taxation of imported compared to domestic
spirits. Turkey will be required to comply with the commitments in the Action
Plan. Gradual elimination of discriminatory practices in taxation in line with
the Action Plan is the key to making further progress in the accession
negotiations under this chapter.

Structural discrepancies continue to exist between the
Turkish excise duty legislation and the acquis. Further efforts are
necessary in order to achieve alignment in this regard. Turkey will need to
introduce a suspension of duty regime for domestic movements and fiscal
warehouses prior to membership.

No progress can be
reported in the area of direct taxation.

Some progress can be
reported in the field of administrative cooperation and mutual assistance. The
cabinet decree published on 10 July 2011 merged the tax audit-related
institutions in the Ministry of Finance under the 'Tax Audit Board'. This
merger is a positive step for ensuring consistency in tax audit planning and
practices. The impact of this restructuring in reducing tax evasion and fraud
remains to be seen.

With regard to
operational capacity and computerisation, limited progress can be reported.
The public receivables law enacted on 25 February 2011 introduced a
restructuring scheme for tax arrears and related fines. While such schemes
might increase tax collection in the short term and can be useful in resolving
disputes, the successive introduction of such schemes may have adverse effects
on voluntary compliance in the medium term by weakening a sustainable tax
collection mechanism.

Conclusion

There has been limited progress on legislative alignment
under this chapter, particularly in eliminating discriminatory practices in the
taxation of tobacco, despite remaining discrepancies with the acquis.
The increases in excise duty on alcoholic beverages contradict the Action Plan
for bridging the differentials between imported and domestic products. In line
with the commitments made by Turkey in the context of the opening of the
taxation chapter of the accession negotiations, Turkey is urged to take
immediate action for the gradual elimination of related discriminatory
practices accordingly. Abolition of discriminatory practices in taxation is key
to making further progress in the accession negotiations on this chapter. No
progress can be reported on direct taxation. Overall preparedness in this
chapter is moderately advanced.

4.17. 
Chapter 17: Economic and
Monetary policy

Based on a good level of preparedness, some progress can be
reported on monetary policy. The Council of Ministers reduced withholding
tax rates on private sector debt instruments. The Central Bank achieved its
inflation target in 2010, as consumer price inflation remained below 6.5%. With
a view to discouraging short-term portfolio inflows, while slowing down credit
growth, the Central Bank cut policy interest rates and increased reserve
requirements for banks. To increase foreign currency liquidity in the market,
the Central Bank stopped its foreign exchange purchase auctions and started
sales auctions. The Central Bank's statements began to focus not only on price
stability, but also on financial stability. The level of legislative alignment
remains advanced, albeit incomplete in this area. The Central Bank decides on
the inflation target jointly with the government. The statute of the Central
Bank does not fully ensure its independence. Provisions in the implementing
regulation on the investor protection fund and the discriminatory treatment of
public and private sector debt instruments with respect to withholding tax
rates are not in line with the prohibition of privileged access by the public
sector to financial institutions. The
Central Bank law prohibits the financing of government deficits through Central
Bank credits.

There has been some progress on economic policy. The authorities
continued to work on improving economic relations with countries in the region
through trade facilitation, visa exemption and investment and cooperation
agreements. Privatisation activities continued and the tenders for electricity
distribution assets were completed. The 2011 budget envisages a gradual
reduction in the deficit, particularly through increased revenues. Turkey
submitted the 2011 Pre-Accession Economic Programme (PEP) in February 2011. It
presents a largely consistent medium-term macroeconomic and fiscal framework
and demonstrates a considerable degree of familiarity with the technical tools
and analytical requirements of this exercise. At the same time, a significant
updating of the PEP to take account of recent developments and further analysis
in some key areas would have enhanced its role in guiding economic policy. The
overall level of preparedness is advanced in the field of economic policy.

Conclusion

There has been some progress on economic and monetary
policy. The Council of Ministers reduced withholding taxes on private debt
instruments. The Central Bank adopted a new policy mix to ensure financial
stability, by reducing policy rates while increasing reserve requirements for
the banking sector. Improved relations with the countries in the region were
formed. Turkey's alignment with the acquis on economic and monetary
policy is not complete, particularly with respect to the full independence of
the Central Bank and the prohibition of privileged access of the public sector
to financial institutions. The overall level of preparedness is advanced.

4.18. 
Chapter 18: Statistics

Some progress can be reported on statistical
infrastructure. The Turkish national statistical institute (TurkStat)
revised the implementing regulation on data security and confidentiality, to
incorporate the passive confidentiality principle for foreign trade statistics.
TurkStat published the third revision of the Official Statistics Programme,
updating the roles and responsibilities of statistical data providers in the
light of changing methodologies, classifications and data dissemination
practices. Preparations in this area are well advanced.

There has been some progress on classifications and
registers. TurkStat and the Ministry of Agriculture and Rural Affairs (MARA)
continued to work on establishing a statistical farm register, completing a
pilot study for that purpose. Turkey has still to submit a detailed description
of preparations for setting up the farm register and the methodology and
organisational set-up for the collection of agriculture statistics, which is a
key element for the accession negotiations in this chapter. Preparations in
this area are advanced.

Good progress has been made on sector statistics. TurkStat
further improved short-term business statistics, by starting to publish new
short term indicators according to NACE Rev. 2 classification (Statistical classification of economic
activities). Foreign controlled
enterprise statistics were published for the first time for the years 2006 and
2007. TurkStat started to publish statistics on meat, milk and poultry on a
monthly basis. A new survey was launched for non-formal education activities
and the results for 2009 were published. The authorities published 2010
population data according to the address based population registration system. Preparations for the Population Census in
October-November 2011 are on track.

Turkey still needs to submit key national accounts
indicators together with a documentation of the methodology used, which is a
key element for the accession negotiations in this chapter. Having made a step
forward by producing the draft document, TurkStat needs to submit the more
detailed GNI Inventory. Preparations in this area are advanced.

Conclusion

Good progress has been made in the area of statistics,
particularly in sector statistics. Further progress is needed, particularly in
national accounts and in agriculture statistics. There is an advanced overall
level of alignment with the acquis.

4.19. 
Chapter 19: Social policy
and employment

There has been no
progress regarding the transposition of the acquis on labour law.
The prevalence of undeclared work, particularly in small enterprises and in
agriculture, is impeding the effective application of the labour law.
Legislation related to temporary work agencies, which had been vetoed by the
President, has still not been adopted. Turkey has announced that it is to
create 1450 new posts in the Ministry of Labour and Social Security, including
labour experts, health and safety experts and labour inspectors. However,
inspection capacity for enforcing the labour law still remains insufficient,
with 384 labour inspectors currently dealing with social issues under the
labour law. Efforts and administrative capacity also need to be increased in
order to tackle child labour.

There has been limited
progress in the area of health and safety at work. In November 2010,
Turkey adopted legislation on occupational health and safety services,
including the establishment of workplace health and safety units and the
responsibilities and qualifications of occupational physicians. The new 'Law on
Obligations' addresses the problem of mobbing at workplaces. The Law is
accompanied by a circular from the
Office of the Prime Minister, under which an inter-institutional council would
be established to combat mobbing. The
relevant public institutions, including the Labour Inspectorate, together with
their regional units, continued to receive expertise and training to implement
the transposed acquis and to improve the protection of health and safety
at work. The private sector also benefited from these actions. Legislative and
judicial steps have been taken to address the condition of workers with the
fatal disease of silicosis. However, the Framework Directive on health and safety
at work has not yet been transposed into national law. Enforcement of
legislation remains a challenge, particularly in SMEs where numerous fatal
occupational accidents occurred, attracting media attention and public
criticism of the overall system. Administrative capacity of the Labour
Inspectorate improved as a result of recruiting additional staff. According to
official statistics, there were 64,316 occupational accidents in 2009, which is
12% down on the 2008 figures. However, the numbers would be much higher if the
informal sector were included. Furthermore, there is a need to step up
reporting, data collection, diagnosis of occupational diseases and sharing of
good practice between all stakeholders.

There has been limited
progress in the area of social dialogue. The ban on the contractual
personnel of state economic enterprises from establishing trade unions or
engaging in trade union activities has been lifted. However, the ban on these
personnel engaging in any kind of strike action remains in place. A Prime
Ministry circular allows the participation of civil servants' trade unions on
the boards dealing with the social rights of public employees and disciplinary
issues. Constitutional amendments regarding labour rights have not been put
into effect as the necessary changes in the relevant trade union legislation
have not been made. Social partners have failed to agree on key issues such as
the right to organise at workplace level and thresholds for collective
bargaining. The Economic and Social Council did not meet during the reporting
period. The capacity of the social partners needs to be improved. The low
coverage of collective bargaining has not improved.

There has been some
progress on employment policy. Labour market and employment figures have
improved, although many of them are still well below the EU average. Youth
unemployment remains very high. Inactivity rates, particularly for women,
remain a cause for concern (see also Economic criteria).

Upon recruitment of
unemployed persons, the employers' share of these workers' social security
premiums will be subsidised by the state until the end of 2015. The application
of the short term work fund was extended. Further resources have been allocated
from the unemployment fund for active labour market measures. However,
effective planning, implementation, monitoring and evaluation of these measures
remain a challenge. Part time workers, certain occupational groups and those
who work less than ten days a month have been granted the right to benefit from
unemployment insurance. However, overall, the number of recipients of
unemployment insurance decreased compared to last year. Turkey's public
employment service (ISKUR) is expanding its operations and has recruited
additional staff, although they are still below the numbers needed,
particularly at local level. Demand by employers for ISKUR services, as well as
placement rates, are on the increase. However, further efforts are needed in
order to implement measures targeting women and young people. The public debate
with regard to labour market flexicurity has intensified.

The problem of
undeclared work persists. The results of the Action Plan for Combating Informal
Economy (2008-2010) were not announced. 2,750 new social security auditor posts
have been created. However, inter-institutional cooperation and data sharing,
especially between the tax and social security authorities, need to be stepped
up. Social partners need to play a more active role in the fight against
undeclared work. Turkey's National Employment Strategy has not been adopted.
The Turkish labour market remains deeply segmented with regard to working
conditions and labour relations. There is no progress as regards the
finalisation of the Joint Assessment on Employment Policy Priorities (JAP).

Progress can be reported as regards European Social Fund
(ESF). The Ministry of Labour and Social Security, which is the operating
structure responsible for the management of the Human Resources Development
Operational Programme, recruited additional 24 members of staff. Capacity
building efforts for both existing and new staff continue. However, using the
available resources to establish an operation pipeline for future funding
remains a challenge, which increases the risk of non-absorption of funds. The
monitoring and evaluation of programmes need to be strengthened. The
achievement of programme indicators, in particular, needs to be closely
followed up.

There has been limited progress in the field of social
inclusion. A new Ministry of Family and Social Policies has been
established, merging a number of institutions responsible for social
protection, social assistance, women, children, the disabled and family issues,
in an effort to overcome the institutional fragmentation in this field. The
free social assistance helpline has increased accessibility and speed of
services provided. The 2011-2013 Strategy and Action Plan on Care Services,
which provides for the improvement of home based care services for children and
people with disabilities, have been adopted. The number of social services
units run by the Social Services and Child Protection Agency (SHCEK) is on the
increase. However, conditions in certain institutional care centres remain a
source for concern. Progress has been made in the 'family doctor system':
Turkey started to cover health expenses of children of low-income families and
of those not covered as dependents by the social security system. The lifting
of budget-related limitations on staff in order to employ persons with
disabilities in public institutions had some positive impact[45],
although further efforts are needed to increase employability in both public
and private sector. The action plan
aimed at establishing links between social services and public employment
services has had a limited impact so far. The percentage of the population at
risk of poverty is very high, especially in rural areas and among children. The
high poverty rate among those in employment continues to be a cause for
concern. No progress has been made towards finalising the Joint
Social Protection and Social Inclusion Memorandum (JIM). Preparations in this
area are at an early stage.

There has been some progress in the field of social
protection. The number of people actively insured rose by more than 1.6
million between January 2010 and January 2011, widening the coverage of the
social security system to 84%. Health insurance coverage has also been
extended. However, the pension system continues to report large deficits, and
further efforts to increase registered employment rates are needed in order to
ensure financial sustainability. The situation of seasonal migrant agriculture
workers continues to be a source for concern in several provinces, despite
certain local efforts that are having a relatively positive impact.

There has been no
progress in the field of anti-discrimination. A comprehensive
anti-discrimination law has not been adopted yet.

Some progress can be reported in the field of equal
opportunities. The 'package law' adopted in 2011 incorporates several amendments
concerning parental rights, particularly for civil servants. However, as a
result of these amendments, while the parental rights of civil servants have
improved, the gap between workers and civil servants has widened. There are
shortcomings as regards the transposition of the gender equality directives.
Turkey has not yet established a proper equality board as foreseen by the
directive on equal opportunities and equal treatment of men and women in
matters of employment and occupation. Women's employment and labour
force participation rates increased slightly, standing at 26.6% and 29.8%
respectively. However, they are far below EU averages. The Parliamentary
Committee on Equal Opportunities for Men and Women issued several reports
drawing attention to women's issues, including bullying at work, violence
against women and early marriages. More efforts are needed in order to
implement the Prime Ministry circular on increasing women's employment. The
representation of women in politics, as well as the number of senior positions
held by women in public administration, the government, political parties and
trade unions, remain low. Occupational segregation between men and women needs
to be addressed. Further efforts are needed in order to increase female activity
rates, in particular to combat the stereotypes that hinder women's employment
and to improve access to affordable childcare facilities.

Conclusion

There has been limited
progress in the field of social policy and employment. Administrative capacity
for effective transposition and implementation of the acquis showed some
signs of improvement. However, alignment with the acquis is still not
very far advanced. Constitutional amendments regarding trade union rights have
not resulted in further changes of the legislation aimed at granting full trade
union rights in line with EU standards and ILO conventions. Further efforts are
needed in order to reduce large-scale undeclared work and to increase female
employment rates. The scope of the labour law remains limited. Enforcement of
health and safety at work legislation needs to be stepped up. The risk of
poverty remains very high, especially for the rural population and for
children. Legislation establishing an equality body has not yet been adopted.

4.20. 
Chapter 20: Enterprise and
industrial policy

Further progress was
made with regard to enterprise and industrial policy principles.
Turkey adopted a revised Industrial Strategy Document and an Action Plan
covering the period 2011-2014, which is a key aspect of the accession
negotiations in this chapter.

The Coordination
Council for the Improvement of Investment Environment (YOIKK) issued an
assessment on the 2010 Action Plan and adopted an action plan for 2011. The
assessment demonstrated that only 45% of actions scheduled for 2010 could be
completed. Reportedly, one of the worst performing sectors for the improvement
of business environment is the sector of intellectual and industrial property
rights. Other important developments for the improvement of business environment
were the adoption of the new Turkish Commercial Code. Turkey adopted a new SME
Strategy and Action Plan for 2011-2013. Turkey started the operational process
of assessment for the Small Business Act together with the Western Balkans. In
June 2011 a Prime Ministry circular to all public authorities was issued,
asking them to take into account the Small Business Act (SBA) principles into
their daily work where relevant. This has created a more binding environment
for the implementation of SBA in Turkey.

Some progress was made
with respect to enterprise and industrial policy instruments. The law on
technology development zones was amended and has been brought into line with
the general framework of R&D support in Turkey. The law offers various
means of support, from allocation of state land to tax incentives and
exemptions by the end of 2023. The Ministry of Science, Industry and Technology
extended R&D Centre certificates to 87 companies in Turkey. Financial
reporting standards for SMEs were adopted. A support scheme for participation
in international tourism fairs and for general tourism promotion and marketing
was launched. The general restructuring scheme for public receivables also
includes the receivables of the Small and Medium-sized Industry Development
Organisation (KOSGEB). There was considerable interest in KOSGEB loans
amounting to a total of € 933 million and reaching over 50,000 SMEs. A new
support programme entitled Markets for Developing Enterprises SME Support
Scheme has been established for SMEs to join the stock exchange market. Turkey
continued to participate in the EU Entrepreneurship and Innovation Programme,
in particular as an active member of the Enterprise Europe Network.

Some progress can be
noted in completing alignment with Directive 2000/35 on combating late payment
in commercial transactions. According to the recently adopted Turkish
Commercial Code, interest on late payments becomes applicable after 30 days and
payment cannot exceed 60 days if the term is fixed in the contract and if the
creditor is an SME. If the level of interest on late payments is not already
determined in the contract or if it is determined at an abnormally low level,
the rate would be set at least 8 points higher than the rate determined for
default interest on commercial transactions.

Further progress has
been made in sector policies. The Ministry of Science, Industry and
Technology adopted a strategy on the automotive sector, which focuses on the
development of the R&D infrastructure and design, manufacturing and
branding capacity of the companies, the expansion in domestic and foreign
markets, and the improvement of legal and administrative arrangements and of
physical infrastructure. The same ministry also adopted a strategy on the
machinery sector.

Conclusion

Turkey has made further
progress in this chapter in relation to the adoption of an Industrial Strategy
and Action Plan covering the period 2011-2014, wider availability of enterprise
and industrial policy instruments, adoption of sectoral strategies and
alignment on combating late payment in commercial transactions. Overall, there
is a sufficient level of alignment with the acquis in the field of
enterprise and industrial policy.

4.21. 
Chapter 21: Trans European
Networks

There has been good
progress in the area of transport networks. The Ministry of Transport
submitted to the European Commission a document that elaborates the future
Trans-European Transport Network (TEN-T) in Turkey. Technical consultations
between Turkey and the European Commission were finalised on the basis of this
document. It also identifies the priority projects of European interest on the
future TEN-T Network in Turkey, which is a key element for the accession
negotiations in this chapter. Effective planning of investments on the future
TEN-T and development of an integrated network calls for a transport master
plan and effective use of information systems.

Some progress can be reported in the area of energy
networks. The signature of the Project Support Agreements (PSA) for the Nabucco
project took place on 8 June 2011. Nabucco is an important strategic step
towards closer energy cooperation between the EU, Turkey and other countries in
the region, and remains one of the highest energy security priorities of the
EU. Preparations have continued in order to bring the Interconnector
Turkey-Greece-Italy (ITGI) natural gas pipeline project into full operation.

As regards electricity networks, links are in place with
Bulgaria, Syria, Iraq, Iran, Azerbaijan and Georgia. The parallel trial interconnection
of the Turkish power grid with the European Network of Transmission System
Operators for Electricity (ENTSO-E)'s Continental European Synchronous Area has
already entered its second phase of non-commercial energy exchanges. Turkey is
giving priority to a number of projects that contribute to the completion of
priority links 4 (Greece-Balkan countries ENTSO-E system) and 9 (Mediterranean
electricity ring.

Conclusion

Turkey has made progress under this chapter. In particular,
Turkey has facilitated technical discussions under the Trans-European Network
for Transport and reached an advanced stage in the negotiations. However,
further efforts are needed in order to achieve a network perspective supported
by complementary priority projects and reliable transport data. Some progress
can be reported on energy networks.

4.22. 
Chapter 22: Regional policy
and coordination of structural instruments

No progress was made
with regard to the legislative framework. A draft Law on Instrument for
Pre-Accession Assistance (IPA), which aims to further strengthen the
institutional capacity of the IPA institutions by amending the legislation on
the establishment and organisation of the Operating Structures (OSs) for the
IPA programmes, has not yet been adopted. Further horizontal legislation will have to be developed
and aligned with the acquis in order to fully prepare Turkey to manage
the Structural Funds.

Some progress was made
on the institutional framework. The establishment of the High Council of
Regional Development and the Regional Development Committee (RDC) by the State
Planning Organisation – which now has become the Ministry of Development - will
ensure the coordination of regional development policies among central
institutions and the local authorities. The Regional Development Committee is
expected to harmonize the planning, implementation and monitoring of sectoral,
thematic and regional policies at national level, to better link regional plans
to strategies at the national level and to steer the National Strategy for
Regional Development (NSRD), once it is finalised. Secretaries-General have
been appointed to all 26 Development Agencies (DAs) and substantial staff
numbers are employed in them. The regional plans were prepared in 24 of the 26
NUTS II regions under the coordination of DAs. Further progress has also been
made towards the accreditation of all Operating Structures in line Ministries
to manage IPA components III and IV.

Some progress was made
as regards administrative capacity. Progress on the preparations for taking over procurement
functions and contracting from the Central Finance and Contact Unit (CFCU) has
been slower than anticipated for Transport, Regional Competitiveness and Human
Resources Development Operating Structures under IPA components III and IV.
Furthermore, the recent restructuring of line Ministries may further delay the
accreditation process for the Operating Structures in the area of Transport and
Regional Competitiveness. Progress has been comparatively faster for the
Operating Structure for Environment and, on 20 January 2011, the European
Commission adopted the amending decision conferring management powers relating
to this programme. This decision confers the tendering, contracting and
financial management functions relating to the Environment programme on the IPA
Implementation and Coordination Centre of the Ministry of Environment and Forestry.

The Ministry for EU
Affairs – formerly the Secretariat General for EU Affairs (EUSG) - which
functions as a coordination body for IPA, has substantially increased its staff
and capacity for the monitoring of financial assistance under IPA provided to
Turkey. Training and the provision of technical assistance to
strengthen all institutions involved in the implementation of IPA has continued.
The National Authorising Officer's (NAO) support department has been
reorganised, and new staff have been hired. However, the key implementation
risk for all IPA programmes lies in the need for more efficient cooperation
between the implementation structures, in particular the Central Finance and
Contracts Unit (CFCU) and the ministries designated as Operating Structures for
IPA components III and IV, for further strengthening the institutional capacity
of the institutions involved and for an acceleration of programme and project
implementation, including faster tendering and contracting.

With regard to programming
and programme implementation, good
progress was made in the identification, preparation and appraisal of projects under IPA III. Some
progress in this respect has been made under component IV. However, progress with the preparation
of tender documents, publication of tenders and contracting is still not
sufficient. Delays in tendering create a serious risk that for 2011 it will not
be possible to absorb all of the
funds allocated to the programmes.
All four Operational Programmes for
IPA components III and IV were amended in 2010.

Some progress was made
in the area of monitoring and evaluation, although monitoring of
programmes under IPA components III and IV is still in the early stages due to
the fact that implementation is currently limited. The Integrated Management
Information System (IMIS) is operational. Further development of IMIS,
especially for tendering and financial monitoring, is ongoing. The Sectoral
Monitoring Committees of IPA II, III and IV have continued to meet as
scheduled. Working groups have been set up under the Ministry of EU Affairs
that helped to further improve the monitoring systems.

In the area of financial management and control,
some progress was made. Turkey has
prepared a comprehensive action plan to address all remaining weaknesses in the
management and control systems. The action plans now needs to be fully
implemented in order to eliminate the weaknesses.

Conclusion

Some progress was made
in the field of regional policy. However, the delays with tendering and in the
timetable for the readiness of the Operating Structures for Transport, Regional
Competitiveness and Human Resources Management to take over financial management
and control responsibilities from the CFCU under IPA components III and IV
create serious risks that some of the funds may be decommitted in 2011.
Although the institutional framework for implementation of IPA components III
and IV has been finalised and the administrative capacity is improved, there is
still a need for further strengthening of the administrative capacity, and
improvement in coordination between the IPA institutions in order to accelerate
implementation.

4.23. 
Chapter 23: Judiciary and
fundamental rights (see also Political criteria)

There has been progress
in the reform of the judiciary, notably with efforts to implement the
2010 constitutional amendments.

As regards independence,
a Law on the High Council of Judges and Prosecutors was adopted in December
2010. This law, together with the constitutional amendments approved by
referendum on 12 September 2010, established a new composition of the High
Council[46] that is more
pluralistic and representative of the judiciary as a whole. Ministerial
influence has been reduced. The Inspection Board, previously under the Ministry
of Justice, has now been transferred to the High Council. Concerning effective
remedies, appeals to judicial bodies against decisions concerning dismissal
from the profession are now permitted.

However, as regards
elections of members of the High Council, the system imposed by the
Constitutional Court leaves no room for election of minority candidates,
because candidates who are elected by the majority of the voters could take all
the seats. Nomination of the four non-judicial members of the High Council is
left to the discretion of the President of the Republic, whereas the Grand
National Assembly is not involved. The current provisions do not ensure
permanent representation of members of the Bar in the High Council. The
Minister can veto the launching of disciplinary investigations against judges
and prosecutors by the High Council.

With regard to
impartiality, a Law on the Constitutional Court was adopted in March 2011. This
law, together with the constitutional amendments approved by referendum on
12 September 2010, enlarged the normal membership of the Court. This has
reduced the relative weight of high courts' representatives and made the
Constitutional Court more representative of the legal community and society at
large.

The powers of the
Constitutional Court have been considerably extended by introducing the
individual application procedure. Anyone who claims that any of his or her
fundamental rights and freedoms guaranteed by the Constitution has been
violated by the public authorities can apply to the Constitutional Court,
provided he or she has exhausted all ordinary legal remedies.

However, the
Constitutional Court is insufficiently representative of the Turkish legal
community as a whole and still over-dominated by the high courts. The influence
of the Grand National Assembly over the composition of the Constitutional Court
is also inadequate, in terms of both the number of members it elects and the
choice of eligible candidates. As regards elections of members of the High
Council, the system imposed by the Constitutional Court itself leaves no room
for election of minority candidates, because candidates who are elected by the
majority of the voters could take all the seats.

Prosecutors do not have
their offices in parts of courthouses separate from that occupied by the
judges. They are not required to enter or leave the courtroom by a different
door than the one used by judges. Finally, they do not sit in courtrooms on the
same level as lawyers. This continues to cloud the perception of the
impartiality of judges.

With regard to efficiency,
the Laws on the Court of Cassation and the Council of State were amended in
order to tackle the increasing backlog of cases. More chambers have been established, working methods
modified and a large number of judges and prosecutors appointed. Legislation was adopted in March 2011 to reduce
the workload of first-instance courts.

However, neither an
overall common strategic framework nor reliable indicators and benchmarks have
been established by the Ministry of Justice and the High Council for Judges and
Prosecutors to assess the performance of courts and of the judicial system as a
whole. The Ministry and the High Council have yet to develop benchmarks to
monitor and assess the duration of court proceedings and improve the efficiency
and effectiveness of the judicial system, in order to address the backlog of
pending cases and, in particular, the large backlog of pending serious criminal
cases.

The current
fragmentation of the Turkish courts, which each have a separate registry and
are not connected with each other even when they are located in the same
courthouse, prevents efficient use of available resources. The regional courts
of appeal have not been established yet. By law, they should have been in
operation by June 2007. The number of vacancies for judges and prosecutors
equals roughly a third of the current judicial staff.

Pre-trial detention is
not limited to circumstances where it is strictly necessary in the public
interest and is not sufficiently justified. In some terror-related cases,
defendants and their lawyers have not been permitted access to incriminating
evidence early in the proceedings. Frequent use of arrest instead of judicial
supervision, leaks of information, evidence or statements, limited access to
files, failure to give detailed grounds for detention decisions and revision of
such decisions raised concerns. No authoritative information has been received
from either the prosecution offices or the courts on all these issues of wide
public interest.

There is a need to
improve the work of the police and the gendarmerie together with the working
relationship between the police, gendarmerie and judiciary in order to address
concerns raised during investigations in some high-profile cases. A Regulation
on the judicial police, adopted jointly by the Ministries of the Interior and
Justice in 2005, has yet to be implemented. As a result, prosecutors rely on
judicial police units operating under the hierarchical control of the Ministry
of the Interior.

A large number of
measures in the judicial reform strategy adopted by the government in
August 2009 have been implemented by the constitutional amendments and ensuing
legislation. There is a need to review the existing strategy in a transparent and inclusive fashion, so that the revised strategy will be owned by the Turkish
legal community and the wider public.

Limited progress can be
reported on anti-corruption.

In line with the
2010-2014 Strategy and Action Plan[47], an Executive Committee for Increasing
Transparency and Fighting Corruption[48] has
coordinated working groups preparing proposals on corruption-related issues.
The Committee of Ministers on anti-corruption policy approved all the
proposals. Turkey has implemented 19 of the 21 recommendations made in the 2005
evaluation reports by the Group of States against Corruption (GRECO). The Law
on the Turkish Court of Accounts (TCA) adopted in December 2010 should
significantly strengthen the transparency and accountability of public
administration.

However, there was no
increase in the strength or independence of institutions involved in the fight
against corruption, which are not sufficiently staffed. Immunities of Members
of Parliament or of senior public officials in corruption-related cases have
yet to be limited and objective criteria established setting the conditions
under which their immunity could be lifted. Two major sets of GRECO
recommendations on "Incrimination" and "Transparency of Party
Funding" remain to be implemented. There has been no progress concerning
the transparency of financing political parties. Auditing of political parties
remains weak and there is no legal framework for auditing election campaigns or
the financing of individual candidates. No steps have been taken to build up a track record of
investigations, indictments or convictions related to corruption cases.

As regards fundamental
rights, there has been progress in some areas, whereas in others a number
of concerns were raised, in particular as regards freedom of expression.

Human rights institutions in line with the UN Paris principles have yet to be
established. The draft Law establishing the Turkish National Human Rights
Institution (NHRI) submitted to parliament in February 2010 has not yet been
revised in line with these principles. This is relevant in particular to the
independence and functional autonomy of this new institution. It is important
to involve civil society organisations in this process. As regards prohibition
of torture and inhumane or degrading treatment or punishment, the
ratification of the OPCAT is a significant step. The positive trend on
prevention of torture and ill-treatment continued. However, disproportionate
use of force by law enforcement officials continued to be a concern,
particularly outside official places of detention.

The growth of the prison
population is leading to serious overcrowding, which is hampering attempts to
improve detention conditions. A complete overhaul of the complaints system in
prisons is needed. An urgent review of the system for dealing with juveniles is
needed to minimise the number in prison and the time they spend there and make
sure that detention conditions guarantee the rights of the child.

With respect to access
to justice, the legal aid provided is of inadequate scope and quality.
Budgetary provisions are inadequate. There is no effective monitoring mechanism
that would remedy long-standing problems.

Regarding freedom of expression, open debate,
including on issues perceived as sensitive, continued. However, in practice,
freedom of expression is undermined by the high number of legal cases and
investigations against journalists, writers, academics and human rights
defenders and undue pressure on the media, which raises serious concerns. The
present legislation does not sufficiently guarantee freedom of expression in
line with the ECHR and the case law of ECtHR, and permits restrictive
interpretation by the judiciary. Frequent website bans are another cause for
serious concern. Turkey's legal and judicial practices, legislation, criminal
procedures and political responses are obstacles to the free exchange of
information and ideas.

As regards freedom of assembly and freedom of
association, including the right to form political parties and establish
trade unions, there has been progress on the ground. Turkey's legislation on
freedom of association is broadly in line with EU standards. However,
demonstrations in the south-east of the country and in other provinces related
to the Kurdish issue, students' rights, the activities of the higher education
supervisory board (YÖK) and trade union rights were marred by disproportionate
use of force. Disproportionate controls and restrictive interpretation of
legislation on associations remain. There were no developments as regards
amendment of the legislation on the closure of political parties. Restrictive
provisions in the current legal framework on trade unions, which are not in
line with EU standards and ILO Conventions, remain.

There has been limited
progress on freedom of thought, conscience and religion. Freedom of
worship continues to be generally respected. The dialogue with the Alevis and
with the non-Muslim religious communities continued. However, members of
minority religions continued to be subject to threats from extremists. A legal
framework in line with the ECHR has yet to be established, so that all
non-Muslim religious communities and the Alevi community can function without
undue constraints.

With regard to women's
rights and gender equality, protecting women's rights, promoting gender
equality and combating violence against women remain major challenges. The
legal framework guaranteeing women's rights and gender equality is broadly in
place. However, further substantial efforts are needed to turn the legal
framework into political, social and economic reality. Legislation needs to be
implemented consistently across the country. Honour killings, early and forced
marriages and domestic violence against women remain serious problems. Further
training and awareness-raising on women's rights and gender equality are
needed, particularly for the police.

As regards children's
rights, efforts need to be stepped up in all areas, including education,
combating child labour, health, administrative capacity and coordination. In
general, more preventive and rehabilitation measures need to be taken for
juveniles. Moreover, there is a need to establish more juvenile courts in line
with the legislation in force and to minimise detention of children which, in
cases where it is strictly necessary, should take place in appropriate
conditions.

With regard to the right
to education, the proportion of children in pre-school education
increased in 2010-2011 compared to the previous school year. The number of
teachers also increased. The primary school enrolment rates (grades 1-8)
increased and the gender gap has virtually closed. In secondary education
(grades 9-12), the enrolment rates increased
for boys from 67.5% to 72.3% and for girls from 62.2 % to 66.1 %, widening thus
slightly the gender gap. Turkey signed the Council of Europe Convention
on the Protection of Children against Sexual Exploitation and Sexual Abuse. However, school drop-outs were a concern, especially
among seasonal migrant workers' families and Roma children. Regional
disparities remained wide for both primary and secondary school enrolment.

As regards treatment of
socially vulnerable persons and/or persons with disabilities and the
principle of non-discrimination, a strategy paper on accessibility and
the related national action plan were adopted. However, constitutional changes
allowing positive discrimination in favour of the disabled were not turned into
specific measures. A national mechanism for monitoring implementation of the UN
Convention on the rights of disabled persons and its optional protocol has
still not been established. Lack of data and research on persons with
disabilities and the mentally ill remain a barrier against informed policy-making.
Provisions of the Turkish Criminal Code on 'public exhibitionism' and 'offences
against public morality' are sometimes used to discriminate against LGBT
people.

On the right to
property, legislation amending the 2008 Law on foundations was adopted in
August 2011. This is the fourth attempt of the Turkish authorities since 2002
to restore the property rights of non-Muslim communities. The new legislation
provides that non-Muslim community foundations can register in the Land
Registry, under their names, immovable property entered in their 1936
declarations for which either the owner entry was left blank, or which are
registered in the name of the Treasury, the Directorate-General for
Foundations, municipalities and special provincial administrations, or
cemeteries and fountains registered in the name of public institutions.
Interested parties will have to apply for the return of properties within a
twelve-month period from the entry into force of the new legislation. Finally,
the market value of foundation properties currently registered with third
parties will be paid. This covers properties seized and sold to third parties,
and which cannot be returned to the foundations. The Mor Gabriel monastery
foundation is covered by the new legislation even though it was registered in
1960. A regulation will define implementation modalities of the new legislation.

As regards respect for and protection of minorities and cultural rights, Turkey has made progress on cultural rights,
especially on use of languages other than Turkish by all nationwide radio and
television stations and on use of multiple languages by municipalities. The opening of a Kurdish Language and Literature
Department in a university has been authorised. However, restrictions remain on the use of languages other
than Turkish in political life, in contacts with public services and in
prisons. The legal framework on use of languages other than Turkish is open to
restrictive interpretations and implementation remains inconsistent. There has
been some progress as regards the Roma, in particular on amending
discriminatory legislation. However, a comprehensive policy to address the
situation of the Roma is missing. Turkey's
approach to minorities remained restrictive. Full respect for and protection of
language, culture and fundamental rights, in accordance with European
standards, has yet to be fully achieved. Turkey needs to make further efforts
to enhance tolerance and promote inclusiveness vis-à-vis minorities. There is a
need for comprehensive revision of the existing legislation and to establish
protection mechanisms or specific bodies to combat racism, xenophobia,
anti-Semitism and intolerance.

With regard to respect
for private and family life and, in particular, the right to protection of
personal data, the 2010 constitutional amendments introduced the protection
of personal data as a constitutional right. Turkey needs to align its
legislation with the data protection acquis, in particular Directive
95/46/EC, and, in that context, to set up a fully independent data protection
supervisory authority. Turkey also needs to ratify both the CoE Convention for
the protection of individuals with regard to automatic processing of personal
data (CETS No 108) and the additional protocol to it on supervisory authorities
and trans-border data flow (CETS No 181).

Conclusion

Overall, progress has been made in the area of the judiciary.
The adoption of legislation on the High Council of Judges and Prosecutors and
on the Constitutional Court is a step in the right direction in terms of the
independence and impartiality of the judiciary. Steps have also been taken to
increase the efficiency of the judiciary. However, significant further efforts
are needed in all areas, including the criminal justice system. Limited
progress has been made with implementing the strategy and action plan on anti-corruption.
Effective implementation of the strategy is necessary to reduce corruption
which remains prevalent in many areas. The lack of transparency relating to
political party financing and the scope of immunities remain major
shortcomings. Turkey needs to build up a track record of investigations,
indictments and convictions. As
regards fundamental rights, some progress has been made. However,
further significant efforts are needed in most areas, in particular freedom of
expression and freedom of religion. Turkey has made progress on cultural
rights, especially on use of languages other than Turkish. However, Turkey's
approach to minority rights remains restrictive. Turkey needs to make further efforts to enhance tolerance
and promote inclusiveness vis-à-vis minorities.

4.24. 
Chapter 24: Justice, freedom
and security

Limited progress can be
reported in the area of migration. Turkey remains a very important
country of transit and destination for irregular migration. The number of
irregular migrants apprehended by the Turkish law enforcement forces amounted
to 32,667 in 2010; the number reached 12,727 between 1 January and 1 June 2011.
The 2010 figures represent a slight decrease of around 5% compared to 2009. On
the other hand, the number of third country nationals detected by EU Member
States' law enforcement forces when entering or attempting to enter illegally
the EU at or between border crossing points of the EU external border coming
directly from or transiting through the Turkish territory was as high as
54,493. This represented a substantial increase of around 44% compared to 2009.
In the first half of 2011 this number amounted to 17,225. The number of
irregular migrants deported by Turkish authorities in 2010 was 23,583 and 8,616
between 1 January and 1 June 2011. Some 750 organisers of irregular migration
were apprehended in 2010, 701 of whom were Turkish. Between 1 January and 1
June 2011, 308 organisers of irregular migration were apprehended, 289 of whom
are of Turkish nationality. Efforts to increase the capacity to host irregular
migrants in decent conditions pending the removal procedures continued, and in
2010 it reached 2,945.

The Turkish authorities
have been working in view of preparing legislation regulating the status of
regular and irregular migrants, asylum seekers and refugees in Turkey. This legislation would be important to pave the
way towards aligning with EU and international standards, to ensure protection
of migrants' and refugees' rights, and to establish a legal regulatory
framework able to cover any relations between the Turkish administration and
the aliens in Turkey. Several rounds of consultations with Turkish civil
society and involvement of stakeholders such as International Organisation for
Migration (IOM) and UNHCR, as well as the European Commission, during the
preparation of that legislation are
evidence of the effort being made by the Turkish authorities to ensure a more
open and transparent process. However, the text has not yet been presented to the Parliament.
Circulars issued during the course of 2010 have improved the practices of law
enforcement forces. In particular, the circular issued by the Turkish National
Police (TNP) in September 2010 gave the instruction to systematically inform in
writing irregular migrants held in removal centres of the reason for being held
in the centre, the duration of stay, their right to have access to a lawyer,
and the right of appeal against the decision to be held in a removal centre or
deportation order, amongst others. Following the issuance of the circular,
posters and brochures setting out these rights have been disseminated to all
removal centres.

The 'Coordination Board
for Combating Illegal Migration' of the Ministry of Interior decided in
particular to give priority to the health issues of irregular migrants and to
elaborate, with the assistance of IOM, an interagency cooperation model to
ensure public health and the health of irregular migrants. Social assistance
and solidarity associations are also earmarked to receive funds specifically
allocated for the costs of asylum seekers, refugees and irregular migrants in
this area.

However, there are no
systematic psycho-social services in removal centres. Access to legal aid is
still limited, as there is no institutional capacity at the level of Bar
Associations or civil society to provide for such support throughout the
country. There is no comprehensive set of rules/guidelines for the management
and operation of removal centres. The TNP has been tasked with drafting a 'directive'
to regulate issues concerning the management of removal centres, including the
physical conditions in centres, staff to be appointed, the security of and in
the centres, provision of food and health, treatment of vulnerable groups, as
well as involvement of civil society in the centres. This 'directive' has not
yet been adopted.

Basic and advanced
training of TNP personnel working in the area of asylum and migration continued
throughout 2010, both as a result of national efforts and also with the support
of EU financed projects. Staff trained and experienced in the area of asylum
and migration should be considered as a 'professional category' and continue to
work in the area.

There is no
institutional capacity in the administration to facilitate assisted voluntary
return. A limited number of returns are financed from a general budget of the
TNP. A total of 789 persons have been voluntarily returned between September
2009 and March 2011 through a project implemented with IOM, financed by the
United Kingdom. Raising awareness among administrators, governors, district
governors, municipalities, lawyers and the public at large about the rights of
irregular migrants and procedures involved in migration management remains an
issue that needs to be addressed through concrete measures.

Negotiations have been finalised on an EU-Turkey
readmission agreement. The agreement remains however to be initialled and
signed. The swift conclusion of this agreement and its effective implementation
after it has entered into force are of crucial importance. Meanwhile, the
adequate implementation of already existing bilateral readmission agreements
remains also a priority. As regards implementation of the existing bilateral
readmission protocol between Greece and Turkey, some positive developments were
registered in 2010. The two countries agreed to designate daily contact points
among law enforcement staff for the smooth implementation of the protocol. In
the first 6 months of 2011, Greece asked Turkey to readmit 2,508 persons; but
Turkey accepted to readmit 450 of those and eventually Greece handed over 412
of them to Turkey.

During the reporting
period, Turkey concluded negotiations on readmission agreements with Russia and
Nigeria. These agreements have not yet entered into force, like the one
concluded with Pakistan in 2010. Readmission negotiations are ongoing with
Serbia and Belarus. Talks are ongoing to start negotiations with Azerbaijan,
Bangladesh, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia,
Georgia, Lebanon, Libya, Moldova, Sri Lanka and Uzbekistan.

In the area of asylum,
some progress can be reported. The number of Turkish satellite cities, where
migrants recognised as being in need of international protection are required
to reside, was increased from 31 to a total of 51. On 15 July 2011, an
instruction was issued by the Ministry of Interior to delegate the authority to
conclude asylum applications to the governorates of Ankara, Kırklareli,
Izmir, Gaziantep, Van, Erzurum and Kayseri. The governorate of Istanbul was
also given the authority to decide asylum applications made at the Atatürk
Airport Border, pilot implementation starting on 1 October 2011.

However, the Ministry
of Interior needs to enhance the overall capacity of the satellite-city system
and to ensure a more balanced distribution of the asylum population across the
country. The physical hosting conditions of the refugees who have been granted
a residence permit vary a lot within the country. The ministerial Circular of
March 2010, which defines the conditions on the basis of which refugees may be
exempted from paying residence (Ikamet) fees, is implemented unevenly. Turkey
has not yet lifted the geographic reservation under which it implements the
Geneva Convention of 1951 on Refugees, which implies that no asylum seeker of
non-European refugee can obtain in Turkey more than a temporary protection.
Furthermore, Turkey continues not to have a national legislation on asylum due
to the fact that the law on foreigners and international protection has not yet
been adopted.

Turkey remains a very important country of transit and
destination of migrants in need of international protection. The number of
asylum applications has risen from 6,743 persons applying in 2009 to a total of
8,190 persons applying in 2010, in particular those originating from Iraq
(3,008 persons), Iran (2,604), Afghanistan (1,456) and Somalia (341). A total
of 5,008 persons were resettled mainly to USA, Canada and Australia in 2010.
This made the total number of recognized refugees residing in the country
raising in 2010 up to 17,518 people, divided into six main groups: Iraqis, 6,374 (37%); Iranians, 4,753, (27%); Afghanis,
3,401 (19%); Somalis, 1,297 (7%); Sudanese, 209 (1%); Palestinians, 139 (less
than 1%). On the other hand, in
2010 5,008 refugees were resettled from Turkey, mostly towards USA, Canada, and
Australia. Between January and
June 2011, 5,416 persons applied for asylum. Majority of these were from Iraq
(2,469), Iran (1,062) and Afghanistan (585). In 2011, Turkey has hosted more
than 18,000 Syrian nationals who fled Syria in search of protection, of which
approximately 7,500 currently remain. UNHCR has had only intermittent direct
access to persons hosted in the camps, but the office continues regular
consultation and sharing of expertise with the authorities on required
standards of international protection.

There has been limited progress on visa policy.
Turkish passports with biometric security features were put into circulation on
1 June 2010. In addition, new Turkish visa stickers with higher security
features were published by the Turkish Central Bank.

However, these new stickers still need to be put into use
by the foreign missions of Turkey, as well as at the border crossing points
(BCPs) to replace the stamp visas. Furthermore, the issuing of sticker- and
stamp-type visas at borders, which is currently applied to the nationals of 48
countries, needs to be abolished. Airport transit visas have yet to be
introduced.

Training on document security needs to be intensified in
particular for the consular staff. Among the police in charge of border checks
at different BCPs, 50 members of staff were trained on document security. A
training module on this topic was developed in cooperation with the IOM.

A pilot implementation of the protocol between the
Ministries of Labour and Social Security, Interior and Foreign Affairs
concerning the online processing of requests for 'work visa' was launched in April
2011. It enables the parallel issuing of work visas and work permits, as well
as tracking of the information by the police working at the BCPs through the
Turkish Visa Information System.

Turkey did not further align with the EU lists of countries
whose nationals must be in possession of visas when crossing the external
borders and those whose nationals are exempt from that requirement (Council
Regulation (EC) No 539/2001). On the contrary, it continued its recent policy
of concluding visa exemption agreements with other countries, some of which are
on the EU's negative list.

Turkey agreed on mutual visa exemptions covering all types
of passports with Serbia in October 2010, Georgia in February 2011 and Russia
in March 2011. Mutual visa exemptions excluding ordinary passport holders were
agreed with Portugal in October 2010, Sudan in October 2010 and Yemen in
January 2011.

Turkey does not apply a uniform policy towards all EU
citizens as regards the visa obligation. Currently, citizens of 11 EU Member States
are required to hold a visa to enter Turkey, which can be obtained at the
Turkish borders. Citizens of the other 16 Member States (which also include
Slovenia since August 2010) are exempted from the visa obligation for a short
stay of up to 90 days.

Preparations remain at an early stage. Further efforts are
needed for alignment with the acquis in this area.

Very limited progress can be reported on external
borders and Schengen. An Integrated Border Management Coordination Board
has been established, and the Road Map on Integrated Border Management and the
Protocol for Inter-Agency Cooperation have been drafted. Training activities on
IBM have been conducted.

Modernisation of the land BCPs continued with the
Build-Operate-Transfer model. However, border agencies at both local and
central level need to be consulted not only during the design phase but also
during the utilisation of the modernised BCPs, in order to ensure that the
model is compatible with its operational functionality. Border checking procedures
and regulations need to be further developed to control irregular migration in
the transit zone areas at the airports.

The task force for IBM met only twice, on 20 January and 20
April 2011. The high level coordination board met four times in the reporting
period (9 November 2010, 31 May 2011, 29 July 2011 and 10 August 2011) focusing
on the draft law on the establishment of the new border security authority and
regulating interagency cooperation for border management. An agreement was
reached among all 21 members of the board to adopt a document regulating the
principles and procedures for integrated border management inter-agency
cooperation. The impact of this initiative remains to be seen. The proposed
legislative amendment on expanding the tasks of the deputy governors acting as
administrative heads of the border agencies, the aim of which is to facilitate
the coordination between all of them at local level, is still pending in the
Parliament. Both the development of inter-agency cooperation and coordination
and the establishment of a Border Security Agency are key for efficient border
management.

To secure the border, further improvements are needed in
certain areas, including through the establishment of more adequate
infrastructure and a more extensive use of surveillance equipment, in
particular electronic means, mobile and fixed, video surveillance (CCTV
systems) infrared cameras and other sensor systems. Further efforts are needed
on basic and specialised training to ensure a high level of professionalism.
Risk analysis needs to be implemented at national, regional and local level.

Negotiations on a working arrangement with Frontex have
progressed but still need to be concluded with a view to enhancing operational
cooperation at Turkey's borders with the EU, in order to prevent irregular
migration and to combat cross-border crime.

Preparations are at an
early stage. Further efforts are needed in order to align border management
with the acquis.

Limited progress can be
reported on judicial cooperation in civil and criminal matters. In the
area of judicial cooperation in civil matters, a new law on civil procedure was
adopted on 12 January 2011. It has extended legal aid to cover temporary
protection requests as well as associations and foundations with public benefit
status. The submission of a certificate of poverty is no longer required; any
document that can be evidence of insufficient means will be accepted instead.
However, legal aid is granted to foreign nationals under the principle of reciprocity.
On child protection, the law approving the 2003 Convention on Contact
concerning children was adopted on 9 November 2010, and the ratification
procedure is due to be finalised. The draft law on compensation of crime
victims has now been submitted to the relevant institutions for an opinion. It
envisages compensation for children who are refugees or seeking asylum, as well
as child victims of human trafficking. During the reporting period 706 requests
falling within the ambit of judicial cooperation in civil matters were received
by Turkey and 1,735 requests came from Turkey.

As regards judicial
cooperation in criminal matters, the Optional Protocol to the UN Convention
against Torture (OPCAT) was ratified by Turkey on 23 February 2011. Turkey
attended the regular meetings of the European Judicial Network (EJN). Five
judges are acting as contact points for Eurojust and EJN to facilitate the
implementation of extraditions and requests for mutual legal assistance.
Effective personal data protection is crucial for efficient international
judicial cooperation, in particular with Eurojust. To that end, the adoption of
the draft law on personal data protection is key. At this stage, the level of
cooperation with Eurojust is mixed. Contacts took place recently between Turkey
and Eurojust to discuss possible ways of cooperation. Contact points other than
those in the Ministry of Justice would further facilitate judicial cooperation
in criminal matters.

During the reporting
period 59 extraditions were requested by Turkey and 3 extraditions were
requested by EU Member States. There were 23 extraditions to Turkey. Regarding
mutual legal assistance on criminal matters, a total of 624 requests were
received by Turkey and 4,740 requests from Turkey. On the transfer of convicts,
three transfers took place to Turkey and three to EU Member States.

With regard to
strengthening the institutional capacity in international judicial cooperation,
four judges and prosecutors have attended masters of law studies in EU Member
States, 29 judges and prosecutors received intensive language trainings and 19
judges and prosecutors followed training courses in EU law.

Preparations are at an
early stage. Further efforts are needed in order to align these areas with the
provisions of the acquis.

In the area of police
cooperation and the fight against organised crime, some progress has been
achieved. Turkey is a party to the main international conventions. Turkey
signed a number of bilateral agreements on police cooperation including in the
areas of combating terrorism (Afghanistan, Pakistan and Syria - December 2010,
Serbia - March 2011). The delay in adopting a personal data protection law is
limiting police cooperation at international level and an operational
cooperation agreement with Europol cannot be concluded (a strategic cooperation
agreement has been in force since 2004). Cooperation with Europol has varied.
Posting of a liaison officer would improve the cooperation. The TNP and CEPOL
(European Police College) signed a cooperation agreement in December 2010 which
facilitates participation in training activities and exchange of information
through access to CEPOL's e-net. A branch office under the Department of
Foreign Affairs of the TNP was established in October 2010 to coordinate human
rights issues at international level and to develop policies accordingly.
Inter-agency cooperation remains to be further strengthened.

As regards the fight
against organised crime, the Monitoring and Assessment Board meetings
started to be held twice a year under the coordination of the Ministry of
Interior in order to implement the National Strategy (2010-2015) and Action
Plan (2010-2012) against Organised Crime. Turkey signed the Council of Europe
Convention on Cybercrime in November 2010. Ratification is pending. In October
2010, the Anti-Smuggling and Organised Crime Department of the TNP was again
reorganised with the aim of increasing specialisation in the areas of the fight
against financial crimes, proceeds of crime and smuggling. The cooperation
protocol signed between the Ministry of Interior and the Undersecretariat of
Customs in March 2011 outlines the working principles for anti-smuggling,
including controlled delivery actions, joint training activities and the use of
technical equipment for special investigation methods. The Turkish police has
good analytical capacity on forensics. However, there is a need to establish a
national fingerprint and DNA database. Data collection in the area of law
enforcement remains to be improved.

Results with regard to
confiscation, seizures and freezing of assets remain limited. Enforcement
capacity to tackle money laundering needs to be improved (see also Chapter 4
–Free movement of capital).

There was limited
progress in the area of trafficking in human beings. The first draft of the framework law prepared by
the Ministry of Foreign Affairs on Combating trafficking in human beings and
the protection of victims of trafficking in human beings was sent to the
Ministry of Interior, which organised consultations with civil society
representatives and academics to ensure the openness and transparency of the
legislative process.

The process of
ratifying the Council of Europe's Convention on Action against Human
Trafficking is pending due to the fact that Turkey is not yet a party to the
1981 Council of Europe Convention for the
Protection of Individuals with regard to Automatic Processing of Personal Data.
The ratification of the former is conditional upon the ratification of the
latter.

The victims' shelters
in Ankara and Istanbul, which received financial support in 2010 from the
General Directorate of Social Solidarity and Assistance (GDSSA), which comes
under the Prime Minister's Office, have their 2011 subsistence costs mostly
covered through resources allocated from the Ministry of Foreign Affairs' own
budget. The Ministry of Foreign Affairs is covering the cost of running the 157
Helpline for victims of human trafficking in 2011. During the reporting period,
the number of reported victims of trafficking amounted to 59 all but one of
whom are female.

Preparations are
advanced. Further efforts are needed as regards alignment with the acquis
in this area.

With regard to progress
in the fight against terrorism, a Regulation was adopted on the
organisation, duties, powers and working principles of the Under-secretariat
for Public Order and Security which was affiliated to the Deputy Prime Minister
in July 2011. The Financial Crimes Investigation Unit (MASAK) received 186
suspicious transaction reports regarding financing of terrorism
in 2010, compared to 49 in 2009. During the reporting period, MASAK signed
memoranda of understanding with Jordan, Luxembourg, Senegal, United Kingdom,
Canada, Belarus and Monaco to exchange information on combating the financing
of terrorism and money laundering. Turkey still faces terrorist attacks from
the PKK.

The following acts have not been ratified by Turkey: the
International Convention for the suppression of acts of nuclear terrorism, the
Council of Europe Convention on the prevention of terrorism, and the Council of
Europe Convention on laundering, search, seizure and confiscation of the
proceeds from crime and on the financing of terrorism. It is a matter of
crucial importance to adopt the law concerning the fight against financing of
terrorism in order to meet the requirements of the Financial Action Task Force
(FATF) recommendations on establishing a system on the freezing of assets and a
definition of the financing of terrorism.

Preparations are advanced. Further efforts are needed in
order to align legislation with the acquis.

Some progress has been
made on the cooperation in the field of drugs. A 2nd Action
Plan (2010-2012) was adopted in November 2010 to continue implementing the
National Strategy against Drugs and Drug Addiction (2006-2012). Action plans
have also been adopted in 78 provinces to implement the Strategy at local
level. An evaluation report was prepared for the first National Action Plan
which shows that 84% of the planned activities have been accomplished. An EU-Turkey
dialogue on drugs took place on 22 June 2011.

Successful operations
resulting in seizures of 70,185 kg of cannabis, 277 kg of cocaine and 12,031 kg
of heroin were conducted by Turkish law enforcement bodies. A total of nine
controlled delivery operations were carried out, with 667.5 kg of heroin and 30
kg of cannabis being seized. An amendment to the Law on Control of Narcotic
drugs was adopted in order to bring five new psychoactive substances within the
scope of the Law.

A new centre for the
treatment of drug addicts was opened in Bursa in November 2010. Currently,
there are 22 treatment centres. An amendment to the Law on Radio and Television
Enterprises and Broadcast Services was adopted, which seeks to prohibit
broadcasts encouraging people to use addictive substances.

Turkey reports in
accordance with the guidelines of the European Monitoring Centre for Drugs and
Drug Addiction (EMCDDA) and submits an annual report. The agreement concerning
the participation of Turkey in EMCDDA has still not been ratified. Turkey is
participating as an observer in the Reitox meetings of heads of focal points.
The draft legislation for improving the status of the National Reitox Focal
Point needs to be adopted and its human resources need to be further strengthened.
The total staff of the National Reitox Focal Point decreased from 17 to 15. A
more balanced approach towards drugs supply and demand reduction needs to be
followed, including through the establishment of better treatment and
rehabilitation facilities.

Overall, preparations
in the drugs field are advanced.

Limited progress was achieved in the area of customs
co-operation. Customs enforcement capacity has been strengthened in terms
of equipment by the installation of two scanners for vehicles and containers,
one at the Kapıkule land border crossing point (BCP) with Bulgaria and the
other in the Sarp land BCP with Georgia, and also by supplying further baggage
screening equipment to various land BCPs. However, the use of equipment needs
to be complemented by an adequate number of staff who are competent and trained
in conducting risk analysis methods and capable of pro-active intelligence
gathering. Training of the staff needs to be structured by reviewing the core
curricula to be applied in a Customs Academy. A vehicle tracking system and
mobile inspection units are in use and operational since August 2010. The
number of mobile teams should be further increased.

Preparations are
advanced. Further efforts are needed on enforcement capacity.

For measures against counterfeiting
of the euro, see Chapter 32 – Financial control.

Conclusion

Progress is uneven in
the area of justice, freedom and security. The finalisation of the negotiations
on an EU-Turkey readmission agreement represents substantial progress. The adoption
of the law on foreigners and international protection remains a priority in
order to ensure a sound legal basis for an efficient asylum and migration
management system, as well as safeguarding the rights of migrants and refugees.
Limited progress can be reported in the area of judicial cooperation in civil
and criminal matters. Some progress can be reported in the area of drugs and
organised crime. Limited progress can be reported in the area of police
cooperation and terrorism. Limited progress was achieved on visa policy and
customs cooperation. Very limited progress can be reported in the area of
border management where the adoption of a law on the establishment of new
Border Security Agency and inter-agency cooperation are key issues to be addressed.
Turkey remains an important country of transit and destination of irregular
migrants. Efforts are needed to prevent irregular migration and to readmit
irregular migrants.

4.25. 
Chapter 25: Science and
research

Good progress can be
reported in the area of science and research policy. At its meeting in December
2010, the Turkish Supreme Council for Science and Technology (SCST) adopted a
National Science Technology and Innovation Strategy for the period 2011-2016.
The strategy is an umbrella document addressing the entire research and
innovation chain (frontier-research; applied and support for result oriented
actions). Together with the adoption of the Strategy, an Action Plan on human
capital building for the period 2011-2016 was adopted, aimed at further increasing
the number of R&D personnel and their mobility, to improve cross-sector
distribution of R&D personnel, research environments, skills and experience
of researchers and employment capacities and to enhance the research culture.
The strategy focuses on the following priority areas for the coming five years:
(1) developing human resources for science, technology and innovation; (2)
stimulating transformation of research into products and services; (3)
disseminating a multi-actor, multi-disciplinary R&D cooperation culture;
(4) strengthening the role of SMEs in R&D and (5) boosting the contribution
of R&D infrastructure to knowledge production.

The Scientific and
Technological Research Council of Turkey (TÜBİTAK) increased its R&D
budget from €310 million in 2009 to €340 million in 2010. In total, the share
of R&D reached 0.85% of GDP in 2009 compared to 0.73% in 2008, even though it
is still below the national target of 2% by 2013. It should be noted that the
increase came mainly from increased investment in research and innovation by
the private sector. The number of private-sector R&D centres approved by
the Turkish Ministry of Trade and Industry increased to 87 as compared to 62 in
2009. The number of R&D personnel employed in these centres reached 13.000
FTE and the total investments amounted to €2.2 billion, which meant that the
private sector share of expenditure on research exceeded 50%.

To stimulate
innovation, TÜBİTAK launched a call to support innovation platforms at
province level aimed at developing science, technology and innovation
capacities at the provincial level by involving local stakeholders, including
public bodies, local universities, industry and civil society organisations,
who will be asked to develop innovation strategies and action plans at
provincial level.

The level of
participation in the Seventh EU research Framework programme (FP7) continued to
rise. Since the beginning of FP7, Turkey has submitted in total more than 3000
projects, of which more than 500 have been selected for funding, which amounts
to an average success rate of about 16% compared to the FP7 average of 20%.
There is therefore still room for improvement. Turkey was successful in
particular with regard to the level of participation by SME's (1 out of 20
successful participants are SMEs) and in the Specific Programme on People under
the Marie Curie Incoming Grants. An update of the Action Plan to support Turkey's
participation for the remaining period of FP7 (i.e. until 2013) is under
preparation. Turkey has also increased the administrative capacity of the
National Coordination Office by recruiting eight new staff, which is an
increase of 30%. Turkey's national contact point network functions very well.

With respect to nuclear
research, Turkey decided not to become associated with the current (2007-2011)
nor the next (2012-2014) Seventh Euratom Framework programme, but to consider a
more active form of participation on a contract basis.

The active cooperation
with the Joint Research Centre (JRC) continued as a result of the participation
of Turkish researchers in JRC workshops, high-level meetings and JRC projects
and networks, and the secondment of Turkish researchers to JRC institutions. A
total of 20 Turkish researchers were supported by TÜBİTAK to work at the
JRC institutes. In 2011, 11 additional Turkish researchers were awarded grants
by TÜBİTAK to conduct research in JRC institutes. In addition, JRC-IRMM is
carrying out an EU-funded project on chemical and ionising radiation in
cooperation with the Turkish National Metrology Institute and the Atomic Energy
Authority, with several activities running in Turkey and in the JRC centre in
Geel, Belgium.

Concerning further
integration into the European Research Area (ERA), the above mentioned actions
that have been taken at national level (Strategy including Innovation, Action
Plan on Human Capital building, increase in investment in research in
particular by the private sector) are all in line with the EU objectives and
targets, and contribute towards the European Research Area and building the
Innovation Union (IU).

Turkey is taking part
in ten Joint Programming Initiatives, which seek to address major European
societal challenges by harmonising national research activities. Turkey
participates, as an associated country, in the Strategic Energy Technology Plan
(SET Plan), and is committed to strengthening its research efforts accordingly.
Turkey actively participates in all advisory bodies on the European Research
Area, including the ERAC (European Research Area Committee) as an observer.
Since October 2010, Turkey has been actively participating in the preparations
for launching the pilot Innovation Partnership on Active and Healthy Ageing.

Conclusion

Turkey is well prepared
in the area of science and research and good progress has been achieved towards
future integration into the European Research Area and preparations for the
Innovation Union. The preparations to contribute to building the Innovation
Union have also started. Overall, Turkey's participation and success rate in
the EU Seventh Framework Programme are growing, but further efforts are needed
in order to meet the excellence requirement and competitive participation in
the EU research programmes.

4.26. 
Chapter 26: Education and
culture

Turkey continued to align with the EU acquis and
standards in the area of education, training and youth. The Ministry of
National Education (MoNE) was restructured in September 2011; among other
changes, a DG for Lifelong Learning and one for EU and Foreign Affairs were
formed.

Turkey improved its
performance in all the areas in which EU benchmarks have been set, but in
general it is still well below the EU average, in particular as regards the
percentage of early school leavers and the participation of adults in lifelong
learning. Following the extension of compulsory pre-school education to the 57
provinces in the school year 2010-11, the enrolment rate for pre-school education
was up from 39% to 43%. Pre-school education will be compulsory in all
provinces in the school year 2012-2013.

The gender gap in
primary schools continues to narrow compared to the previous year. The net
primary school enrolment rate for girls increased from 97.84% to 98,22%, while
the rate for boys rose from 98.47% to 98.59%. For secondary education, the net
enrolment rate for boys showed a large increase - from 67.55% to 72.35% - while
that of girls increased from 62.21% to 66.14%.

In the area of higher education, the total number of universities in Turkey
continued to grow with the establishment of eight private universities,
bringing the total number to 162. However, these universities vary considerably
in terms of the number of teaching staff and infrastructure. Turkey is at an
advanced stage in implementing the Bologna process recommendations.

The development of a comprehensive national qualifications
framework based on learning outcomes linked to the EU's framework has
continued. An independent and fully functional Quality Assurance and
Accreditation Agency to facilitate recognition of qualifications and mobility
needs to be established in conformity with European standards and guidelines. In order to introduce a functional national
qualifications system, modular VET curricula were developed and began to be
implemented in the VET schools. Coherent processes for the assessment of the
modules need to be ensured, as does their use for monitoring progress in
education. The modules will be the basis for nationally recognised certificates
for initial VET at the appropriate level, in place of school leaving
certificates. The modules will also facilitate the recognition of prior
learning.

Progress regarding the
establishment of the National Vocational Qualification System (NVQS) continued
with the establishment of twenty-six centres for the development of
occupational standards, qualifications and assessment requirements. However, a
national qualifications framework based on the European one remains to be established.

Interest and
participation in the Lifelong Learning and Youth in Action programmes has
continued to increase substantially. In 2010, the total number of individual
programme beneficiaries was in excess of 37,000, and 1,428 grant agreements,
amounting to €63.4 million, were signed with beneficiaries. In addition to its
budgeted financial contribution and in order to support more applications,
Turkey supplemented the EU allocation with €9.3 million from its own budget.
The Parliament enacted a law which has further strengthened the administrative
capacity of the Turkish National Agency responsible for managing these funds.

In the area of culture,
Turkey continued to participate in the EU ́s Culture programme, although Turkish
cultural operators participate in the activities mostly as project
co-organisers and not as lead applicants and coordinators. Since Turkey's
accession to the Culture Programme in 2007 only relatively few applications
have been submitted for funding, considering the large cultural sector in
Turkey. Efforts to ensure nation-wide coverage of these activities are to be
pursued. According to the Istanbul 2010 Agency, activities under the Istanbul
2010 European Capital of Culture programme have included a total of some 10.000
events and around 10 million people. However, most of the national funds were
used for the renovation of urban and cultural heritage, thus implying little
civil society dialogue.

Turkey also participated in the celebration of the Europe
Day events on 9 May 2011.

Turkey has still not ratified the 2005 UNESCO
Convention on the Protection and Promotion of the Diversity of Cultural
Expressions.

Conclusion

There has been some progress in the area of
education and training. Turkey showed a strong participation in EU programmes
and popular interest in them continued to increase. There has been some progress in the area of culture, but no
progress on legislative alignment with the EU acquis.

4.27. 
Chapter 27: Environment

In the field of environment, there is limited
progress to report on horizontal legislation. The scope of the by-law on
environmental impact assessment (EIA) has been revised by the Council of State,
but the changes made have yet to be enforced. The EIA Directive is now largely
transposed. However, an addendum to the EIA by-law adopted in April raises
concern as to some exceptions it authorises. Procedures for public and
transboundary consultations have not been fully aligned and implemented.
Regarding the transboundary aspects of the EIA for the EU backed Nabucco pipeline
project, Turkey agreed with Bulgaria to organise an ad hoc exchange of
information, with the aim of complying de facto with the requirements of the EU
acquis. However, general draft bilateral agreements on EIA for
cooperation in a trans-boundary context have not yet been sent to the relevant
Member States. The planned Turkish-Russian nuclear power plant project which is
due to be built on the eastern Mediterranean coast of Turkey continues to cause
public concern, both nationally and internationally. There are similar concerns
around the large number of planned hydro-power projects for which neither an
EIA nor a strategic environmental assessment (SEA) has yet been carried out.
Transposition of the SEA Directive is still at an early stage. Some preparations
have begun for the transposition of the Environmental Liability and INSPIRE
directives.

Limited progress has been achieved on air quality. A
by-law on reducing the emission levels of light trucks and passenger vehicles
in line with Euro 6 was adopted. Preparations are underway for the
transposition and implementation of the National Emissions Ceilings Directive.
There is still insufficient administrative capacity to implement and enforce
the legislation on ambient air quality.

Good progress can be reported in the field of waste
management. The revision of the waste legislation, largely in line with the
provisions of the new EU Waste Framework Directive, has begun with the adoption
of legislation on solid waste, waste water tariffs, waste incineration, packaging
waste and the inspection of end-of-life vehicles. Legislation was also adopted
in the areas of mining and the standardisation of the import of batteries and
accumulators, ensuring further alignment with the acquis. Efforts have
been made to bring some landfills up to EU standards and for the separate
collection of various categories of waste, as well as for the recovery of
energy from waste oils and sterilisation of hazardous medical waste. However,
Turkey still needs to prepare and implement national, regional and local waste
management plans in line with the EU Waste Framework Directive.

There has been very limited progress in the area of water
quality. The institutional framework for water management is fragmented and
not organised at river basin level. Preparations are ongoing to convert a
number of existing River Basin Protection Action plans into river basin
management plans. Transboundary consultations on water issues are still at a
very early stage. The newly-adopted amendment to the Law on Groundwater is
supposed to strengthen the application of the 'polluter pays' principle in
relation to the measurement of groundwater consumption. A monitoring program in
freshwaters and groundwaters for the implementation of the Nitrates Directive
has been established. An integrated marine pollution monitoring system has also
been put in place, for all surrounding seas.

No progress can be reported on nature protection.
Framework legislation on nature protection has not yet been adopted. The list
of potential Natura 2000 sites has not yet been compiled. The national
biodiversity strategy and action plan, as well as the implementing legislation
in this field remain to be adopted. There is growing concern about the possible
adverse effects on potentially protected species of flora and fauna as a result
of the building of new large water and energy infrastructure in the country.
The amended by-law on the protection of wetlands has weakened the protection
status of wetlands, and falls short of the requirements of the Convention on
Wetlands of International Importance. There is no clear allocation of
responsibility for nature protection among the various competent institutions.
The CITES Convention on the international trade in wild animals and plants is
not sufficiently enforced.

Limited progress can be reported regarding industrial
pollution control and risk management, with the adoption of the By-law
implementing the majority of the requirements of the Waste Incineration
Directive and the publication of guidelines on emergency plans, public
information and notifications, in the form of secondary legislation
implementing the By-law on the control of major industrial accidents. A
Regulatory Impact Assessment (RIA) for Seveso II is still to be completed. The
introduction of an integrated permit system is at an early stage.

Little progress can be reported in the field of chemicals,
including REACH. Legislation on biocidal products was adopted. The capacity for
effective implementation is still insufficient.

Legislative alignment in the field of noise is well
advanced. However, preparation of noise maps and action plans is still at an
early stage.

Regarding climate change, limited progress was made
on general policy development. Turkey adopted in May 2010 a national climate strategy
until 2020 and in May 2011 the Climate Change Coordination Board adopted the
first national climate change action plan to implement it. It still needs
to be approved by the Higher Planning Council. . Turkey completed a study on
identifying policies on national emission limitation and emission reduction in
line with global trends, which may enable it to scale up the ambition level
from limiting the growth of greenhouse gas emissions to 11% from the projected
2020 emissions.

There is a significant need for awareness-raising at all
levels. At the international level, Turkey continued to advocate its special
circumstances which were endorsed at the COP16 in Cancún in December 2010.
Unlike most other Annex I Parties, Turkey did not put forward a pledge in line
with the Cancún Agreements. Turkey associated itself with some formal EU
positions. Turkey has not yet submitted its fifth national communication under
the United Nations Framework Convention on Climate Change. However, the GHG
inventories are submitted regularly on annual basis as required. Turkey
participated actively in the climate work under the Regional Environmental
Network for Accession (RENA).

Some action towards future convergence with the EU
Monitoring Mechanism was initiated. Turkey took steps to enhance co-operation
on emissions trading, including to raise awareness of the EU Emissions Trading
System amongst the different stakeholders in the country. However, Turkey's
status as Annex I Party without a target continues to present a challenge to
progress in this field. No steps were taken to promote convergence with the EU
Effort-Sharing Decision. No progress can be reported in the field of fuel
quality or in the implementation of emission standards from cars and vans,
apart from introduction of the monitoring scheme of new car registrations.
Neither were steps taken with respect to the geological storage of carbon
dioxide. Turkey continues to implement the Montreal Protocol on ozone-depleting
substances and fluorinated gases, but needs to take further steps to align with
the EU legislation on fluorinated gases. Turkey has not yet associated itself
with the Declaration adopted at the 22nd Meeting of the Parties to
the Montreal Protocol on the global transition away from HCFCs and CFCs.

Limited progress has
been made in the area of administrative capacity. The former Ministry of
Environment and Forestry has been split into two new ministries namely the
Ministry of Forestry and Water Affairs and Ministry of Environment and
Urbanisation (MoEU). Furthermore the Authority for the Special Protected Areas
and regional Natural Heritage Boards were closed and merged into a directorate
general under the newly established MoEU. Structures for environmental
management have been more centralised with the recent legislative
reorganisation at ministerial level. No progress has been made towards
establishing a national environment agency. Environmental protection
requirements are still not taken into account in the framing of policies and in
the implementation of infrastructure projects. The Climate department within
the Ministry requires further strengthening. Significant efforts are needed to
promote cooperation and coordination between the different Ministries and
authorities involved on climate change.

Conclusion

Overall, some progress was made towards further alignment.
Preparations in the field of environment are at an early stage. Turkey has made
good progress on waste management, whereas limited progress can be reported on
horizontal legislation, air quality and industrial pollution control and risk
management. Turkey made very limited progress on water quality, chemicals and
on administrative capacity, which requires further strengthening, including
better coordination between the relevant authorities at all levels. There is no
progress to report on nature protection. Investments in the field of the
environment need to be increased. Regarding climate change, Turkey made limited
progress on awareness-raising on EU climate requirements. However, a more ambitious
climate policy still needs to be established, both domestically and
internationally. No further progress was made on administrative capacity in the
field of climate change.

4.28. 
Chapter 28: Consumer and
health protection

Limited progress can be
reported in the area of consumer protection. The consumer movement
continues to be weak. Existing mechanisms for government-civil society dialogue
are not being used effectively and participation by consumer NGOs in policy-
and law-making activities remains low.

There has been limited
progress on product safety-related issues. A circular from the Prime
Minister's Office published in March 2011 established a Market Surveillance and
Product Safety Assessment Board. It brings together the relevant market
surveillance authorities to improve cooperation. More systematically comparable
surveillance data have been collected and the market surveillance activities of
the relevant authorities increased compared to the previous year. However,
financial and human resources allocated to market surveillance activities are
still insufficient. The number of measures applied remains low which undermines
the credibility of the system. Work to revise the general product safety
legislation remains incomplete. This is a key element for the accession
negotiations in this chapter.

Some progress was made in the field of non-safety related issues.
The legislation on labels, tariffs and price lists, on the application methods
and principles regarding distance contracts, and on the implementation procedures
and principles regarding door-to-door sales, were amended in March 2011
following the adoption of three revised by-laws. However, the adoption of the
revised consumer protection framework law has been pending for some
considerable time, which is a key factor affecting the accession negotiations
in this chapter. The number of qualified staff members dealing with consumer
protection within the Ministry of Industry and Trade was increased and public
awareness campaigns were broadcast on the radio. Weaknesses in the arbitration
committees and consumer courts remain to be addressed.

There has been some
progress in the area of public health.

Regarding horizontal
aspects, the family medicine system that was introduced in 2004 achieved
full national coverage by the end of 2010. In 2011, the public health
expenditure amounts to 5.6% of the national budget, which is slightly above its
2010 level.

In the field of tobacco,
Turkey largely fulfils the acquis requirements. Initial signs of a
decline in tobacco consumption rates since the smoking ban of 2009 were
confirmed by a nation-wide study. The Constitutional Court denied by a majority
the request to cancel the smoking ban in public areas. The number of smoking cessation centres was increased to
234 and a toll free telephone quit line was launched. A new regulation on the sale and supply of tobacco
products, alcohol and alcoholic beverages was published in January 2011 which
introduces new restrictions on the advertisement, marketing, sale and use of
tobacco products and alcohol. Further law amendments in June 2011 prohibited
selling of tobacco products through the internet.

Some progress can be
reported in the field of communicable diseases. A revised control and
surveillance by-law was published in April 2011, with the aim of completing the
harmonisation of legislation on notifiable diseases and case definitions.
Enforcement capacity is being strengthened, but continued efforts are needed in
order to ensure a coherent monitoring and surveillance system. Due to the
absence of real HIV/AIDS policies, public awareness about the disease is low
and the incidence is increasing. The National Institute of Public Health has
still not been established. Preparations in this area are advanced.

Some progress can be
reported in the field of blood, tissues and cells. The national blood
and blood products guidelines were updated on the basis of the EU
guidelines for the preparation, use and quality assurance of blood components.
A new regulation on human tissues and cells and the quality and safety of the
related tissue and cell centres was adopted in October 2010. It sets the
standards of quality and safety for the donation, procurement, testing,
processing, preservation, storage and distribution of human tissues and cells. In
addition, a regulation was adopted in March 2011 laying down the standards
applicable to the establishments where transplantation of composite tissues
could be take place. The alignment of legislation is advanced on the whole, but
Turkey does not yet have sufficient capacity to ensure efficient monitoring,
inspection, surveillance and reporting in this area. Preparations are on track.

Some progress can be
reported in the field of mental health. A new by-law on community mental
health centres was adopted in February 2011, but the adoption of the national
action plan is still pending. Further action should be taken towards promoting
the inclusion of people with mental health problems, as well as their
empowerment and human rights. Preparations in this area are ongoing.

There was limited
progress in the field of cancer. The Ministry of Health has launched a
public awareness campaign on cancer in women. It focuses on reproductive health
cancers, such as breast, cervical, ovarian and endometrial cancers, which are
the most serious and prevalent among women in the country. Screening of target
groups continues, but monitoring and reporting are problematic. The national
cancer institute has yet to be established. Preparations in this area are on
track.

Concerning socio-economic
determinants of health, a circular from the Prime Minister's Office drew
attention to the growing problems of obesity in Turkey. It called for close
cooperation by public, private and academic bodies, as well as civil society
organisations, to implement the 2010-2014 obesity prevention and control
programme aimed at achieving a 5% reduction in the prevalence of obesity by
2014. An action plan has been adopted which promotes a healthy lifestyle and
encourages municipalities to create opportunities in the local environment that
motivate people to engage in physical activities.

Conclusion

There is some progress
to report on consumer and health protection. In the area of consumer
protection, revised framework laws for consumer protection and general product
safety are still to be adopted. Further financial and human resources need to
be allocated for market surveillance activities, and cooperation with consumer
NGOs needs strengthening. In the area of public health, Turkey has not yet
completed the legislative alignment process nor built up the administrative
capacity to improve the enforcement of legislation in order to enhance the
health and safety status of the population.

4.29. 
Chapter 29: Customs Union

Even though the overall level of alignment with the EU
remains high as a result of the EU-Turkey Customs Union, there has been limited
progress with regard to customs legislation.

Under the law on the restructuring of public receivables
promulgated on 25 February 2011, Turkey introduced a new provision into its
customs law, which provides for a permanent out-of-court dispute settlement
mechanism for customs arrears. No progress can be reported on further alignment
with regard to customs rules on intellectual property rights although new
legislation is in the pipeline. The rules on free zones which are under the
competence of the Ministry of Economy, and the exemptions granted by the
Customs Law on free zones, are not fully in line with the acquis,
although a certain level of alignment can be already observed. The Turkish
legislation on duty relief, particularly the laws allowing duty free shops at
entry points, infringes obligations under the Customs Union. No full alignment
regarding the rules administering surveillance and tariff quotas, and
particularly the quotas allocated to processed agricultural products, can be
reported. In the context of the conformity assessment of products originating
in third country, economic operators are systematically required to declare the
origin before the customs clearance, even if the goods have already been
released for free circulation in the EU before entering Turkey. This
requirement is not in line with the Customs Union.

As regards administrative and operational capacity,
there is some progress to report. As a result of further modernisation efforts,
the Ministry of Customs and Trade has strengthened its security-related
enforcement capacity. The risk-based analysis of the Ministry needs to be
substantially improved in order to reduce the current very high frequency of physical
inspections carried out by the customs, while also improving their quality. The
feedback reporting mechanisms between the central risk analysis unit of the
Ministry and the regional customs offices should be reinforced. The
coordination between the customs enforcement and other law enforcement agencies
for border management needs to be improved. The enforcement of IPR by the
customs, particularly in its export controls, has remained weak. Turkey
continued to be one of the main suppliers of counterfeit products seized at EU
customs.

IT systems capable of interfacing with the EU systems on
transit (NCTS) and tariffs (TARIC, Quota and Surveillance) are not yet in
place. There is limited progress to report regarding the introduction of a
paperless customs environment. The Ministry of Customs and Trade has still not
adopted an IT strategy which fully supports the achievement of its business
objectives.

The 'Customs Union' chapter is one of eight chapters
covered by the conclusions on Turkey adopted by the Council (General Affairs
and External Relations) on 11 December 2006 and endorsed by the European
Council on 14/15 December 2006. As long as restrictions remain in place on the
free movement of goods carried by vessels and aircraft registered in Cyprus or
where the last port of call was Cyprus, Turkey will not be in a position to
implement fully the acquis relating to this chapter.

Conclusion

The EU-Turkey Customs Union has enabled Turkey to reach a
high level of alignment in this area. However, the rules on duty relief and
free zones should be further aligned with the acquis. Turkey also needs
to align its legislation on surveillance and tariff quotas regulated by the
Ministry of Trade. Requesting importers of products in free circulation in the
EU to submit information on origin in any format prior to customs clearance is
not in line with the Customs Union. Risk-based controls and simplified
procedures with a view to facilitating legitimate trade by reducing the number
of physical controls need to be improved. There is still no effective
enforcement of intellectual property rights at customs, and no proper combating
of counterfeit goods.

4.30. 
Chapter 30: External
relations

There has been limited progress in the field of the common commercial policy, although
Turkey already maintains a high level of alignment with the EU common
commercial policy.

Limited progress was recorded in the alignment of the
Turkish general system of preferences (GSP). Further alignment with the EU's
GSP is needed, in particular with regard to its geographic and product
coverage, as well as rules of origin.

During the reporting period, Turkey decided to launch
safeguard proceedings on woven fabrics and apparels without implementing the
World Trade Organization (WTO) Safeguard Agreement provisions. The EU and other
bilateral preferential trade partners of Turkey are excluded from the scope of
the provisional safeguard measures. Another safeguard proceeding was initiated
on PET (Polyethylene terephthalate). Turkey is also considering extending three
safeguard measures on frames for spectacles, bags and cotton yarn, which have
been in force for three years.

There has been progress on bilateral agreements with
third countries. During the reporting period, free trade agreements with
Jordan and Chile entered into force. Turkey signed a free trade agreement with
Lebanon.

Although Turkey's level of coordination with the EU within
the WTO, in particular as regards the Doha Development Agenda, has been
satisfactory, there is still room for improvement in this area, particularly in
the field of agriculture and trade facilitation. Coordination within the OECD
has been satisfactory.

There has been no progress in neither medium and long term
export credits to companies, nor dual use goods. Concerning dual-use export
controls, Turkey has not aligned itself with the EU position on membership
of certain suppliers' groups, such as the Wassenaar Arrangement on export
controls for conventional arms and dual-use goods and technologies, and the
Missile Technology Control Regime.

Turkey made some progress in the field of development
policy and humanitarian aid. The total amount of official
development aid granted by Turkey in 2010 was about € 730 million, reaching
approximately 0.15 ODA/GNI. The level of alignment in this field remained
satisfactory.

'External relations' is one of eight chapters covered by
the conclusions on Turkey adopted by the Council (GAERC) on 11 December 2006
and endorsed by the European Council on 14/15 December 2006. As long as
restrictions remain in place on the free movement of goods carried by vessels
and airplanes registered in Cyprus or where the last port of call was Cyprus,
Turkey will not be in a position to fully implement the acquis relating
to this chapter.

Conclusion

Turkey has achieved a high level of alignment in the area
of common commercial policy, mainly owing to the Customs Union. Some
discrepancies still remain in areas such as the general system of preferences
or control of dual use goods.

4.31. 
Chapter 31: Foreign,
Security and Defence Policy

The regular political
dialogue between the EU and Turkey continued to cover international issues
of common interest, including the Middle East peace process, Western Balkans,
Afghanistan/Pakistan, the Southern Caucasus and developments in North Africa and in the Middle East.
Taking into account that Turkey has become more active in its wider
neighbourhood, and in view of intensifying dialogue with Turkey on issues of
mutual interest informal policy talks were launched in May 2011. (Concerning
relations with other enlargement countries and Member States, see Political
criteria 2.3 – Regional issues and international obligations).

As regards the common
foreign and security policy (CFSP), in the reporting period Turkey aligned
itself, when invited, with 32 out of the 67 relevant EU declarations
and Council decisions (48% alignment).

Bilateral relations
with Iraq continued to improve, Turkey has maintained close official
contacts with the Iraqi authorities, and the Prime Minister visited Iraq,
including the Kurdish Regional Government. Turkey engaged with Iran on
the nuclear dossier. Turkey did not align itself with restrictive measures
imposed by the EU on Iran, in addition to the fourth round of UNSC sanctions.
On 21-22 January 2011, talks between the P5+1 chaired by the EU and Iran took
place in Istanbul.

As regards the Middle
East, Turkey's relations with Israel have further deteriorated since
the Gaza Flotilla incident in 2010. After the publication of the independent UN
report, Turkey downgraded relations with Israel and suspended military
agreements with Israel. Turkey welcomed the agreement on Palestinian
reconciliation brokered in May 2011.

Turkey closely followed
events in Syria. Turkey issued a call to refrain from disproportionate and excessive use of force,
and for continued reform efforts. Since the beginning of the unrest, Turkey provided
humanitarian assistance to more than 18,000 fleeing Syrians, hosted in seven
camps along the Syrian border. Turkey did not align
itself with EU restrictive measures with regard to Syria

Turkey was actively
involved in promoting a solution to the political crisis in Lebanon
which unfolded in January 2011. An agreement on setting up a free trade zone
encompassing Lebanon, Turkey, Jordan and Syria was signed in November 2010. As
regards developments in North Africa, Turkey was vocal on the need for a
change of regime in Egypt. Turkey expressed support for the people's
aspirations in Tunisia.

Turkey eventually
agreed to support NATO's command of operations for the enforcement of UNSC
Resolutions 1970 and 1973 on Libya. Turkey did not align itself with EU
restrictive measures with regard to Libya. Turkey is a member of the contact
group. Turkey provided substantial humanitarian assistance to Libya. The
Foreign Minister described Gaddafi's ousting as a historical moment for Libya.
As regards relations with the Southern Caucasus and Central Asia, Turkey
hosted the 11th Summit of the Economic Cooperation Organisation (ECO) on 23
December 2010. Turkey holds the chairmanship of the Conference on Interaction
and Confidence Building Measures in Asia (CICA) until June 2012. The protocols
signed with Armenia in 2009 to normalise relations are still not
ratified.

Turkey continued its
efforts to enhance cooperation with and between Afghanistan and Pakistan.
Turkey hosted the Fourth Regional Economic Cooperation Conference on
Afghanistan (RECCA) on 3 November 2010 in Istanbul. Turkey furthermore provided
substantial humanitarian assistance and funded several projects in the fields
of health, education and training in Afghanistan.

Turkey-Russia
relations developed positively, with a number of high level visits.

As regards relations
with the United States of America, Turkey and the US consulted regularly
on regional developments. US-Turkish cooperation on security and
counterterrorism remained firm, including in tripartite format with Iraq.

No particular
development can be reported as regards restrictive measures apart from
the issues described above.

Concerning the non-proliferation
of weapons of mass destruction, Turkey is party to all the existing
international arrangements. Turkey hosted the second preparatory conference for
a Global Counter Terrorism Forum in Istanbul in April 2011. Turkey has not
aligned itself with the EU position on membership of the Wassenaar Arrangement
on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (for
dual-use goods, see Chapter 30 – External relations).

With regard to cooperation
with international organisations, Turkey did not sign the statute of the
International Criminal Court. In April 2011, the EU reiterated its invitation
to Turkey to do so as soon as possible. Turkey announced in May 2011 its 'early'
candidacy for a non-permanent seat in the UN Security Council. Turkey supported
the UNGA resolution on the participation of the EU in the work of the UN.
Turkey has held the Secretariat General of the Organisation of the Islamic
Conference since 2005 and has observer status in the African Union. Turkey held
the rotating chairmanship of the Committee of Ministers of the Council of
Europe between 10 November 2010 and 11 May 2011.

There have been no
particular developments with regard to security measures (classified
information).

As regards the common
security and defence policy (CSDP), Turkey is continuing to contribute to
the EU-led military mission in Bosnia and Herzegovina (EUFOR/Althea). Turkey is
also contributing to EUPM, the EU-led police mission in Bosnia and Herzegovina
and to the EU rule of law mission (EULEX) in Kosovo. The issue of EU-NATO
cooperation that would involve all EU Member States beyond the 'Berlin plus
arrangements' remains to be resolved.

Conclusion

Turkey made efforts to normalise relations with its
neighbouring countries, such as Iraq, including the Kurdish regional
government. No progress was made in the normalisation of ties with Armenia. Relations
with Israel have further deteriorated since the Gaza Flotilla incident in 2010. Turkey strengthened relations
with Russia. Turkey engaged more than previously in the provision of
humanitarian aid, in particular to Libya, Pakistan and Afghanistan. The issue
of EU-NATO cooperation that would involve all EU Member States beyond the 'Berlin
plus arrangements' remains to be resolved. Turkey's alignment with the EU's
common foreign and security policy has continued. However, overall Turkish
alignment with CFSP declarations decreased during the reporting period, when
compared to earlier such periods, and Turkey did not align with the EU
restrictive measures on Iran, Libya or Syria. Turkey has not aligned itself
with the EU position on membership of the Wassenaar Arrangement.

4.32. 
Chapter 32: Financial
control

Some progress on public
internal financial control (PIFC) can be reported. The Internal Audit
Coordination Board issued the 2011-2013 Public Internal Audit Strategy
determining the steps for reinforcing the internal audit function in Turkey.
The Board also organised a number of events for dissemination of good practices
in internal audit. The Central Harmonisation Unit for Financial Management and
Control (CHU-FMC) conducted a gap analysis and drafted an action plan for
improvement of financial management and control practices. It is yet to be
adopted.

The 2002 Public
Internal Financial Control (PIFC) Policy Paper fails to address the current
challenges. The Policy Paper and the related Action Plan therefore need to be
updated, which is a key element for the accession negotiations in this chapter.
These documents will need to address the issues of managerial accountability,
delineation of control, audit and inspection functions, as well as the
establishment of a permanent central harmonisation unit for internal audit
(CHU-IA). An operational manual on internal control has been prepared. The
Ministry of Finance needs to strengthen its steering role in the reform
process. Alignment with the acquis in this domain is advanced.

There was significant
progress in the area of external audit. The revised law of the Turkish
Court of Accounts was enacted in December 2010, which is a key element for the
accession negotiations in this chapter. This law provides the institution with
the legal and structural bases for its extended mandate, now also including
public corporations, etc., and further aligned the external audit practices
with relevant international standards. The implementation of this law will be
subject to further scrutiny. In order to carry out its budgetary oversight
function effectively, the Parliament will need to establish the necessary
institutional structure and secure the expertise to analyse the technical
reports to be submitted by the Turkish Court of Accounts.

Some progress can be
reported on the protection of the EU's financial interests. The
operational cooperation between the European Anti-Fraud Office (OLAF) and the
Prime Ministry Inspection Board (PMIB) and other relevant institutions
continued in assessments and investigations of suspected fraud cases. The PMIB
continued to reinforce its function as the permanent body responsible for the
cooperation with OLAF and coordination of relevant national authorities in
combating fraud. As Turkey's Anti-Fraud Coordination Service (AFCOS), it needs
to ensure operational independence in reporting and carrying out its
coordination tasks, as well as ensuring the effective functioning of the
Turkish anti-fraud network in addressing the prevention, detection and follow-up
of cases.

No development can be
reported in the implementation of the Convention on the Protection of the
European Communities' Financial Interests (PIF Convention) and its Protocols.
Turkey will need to ensure better monitoring of the actual implementation of
the Convention. Preparations are moderately advanced in this area.

Some progress can be reported on the protection of the
Euro against counterfeiting. The Counterfeit Tracking System continues to
operate among the Treasury, the Central Bank, the Public Prosecutor's Office,
the Turkish National Police and the Gendarmerie General Command. The Turkish
National Police was officially appointed to serve as the 'National Contact
Office' (NCO) to ensure cooperation with the EU institutions as a part of the
Counterfeit Tracking System. The centralisation of technical and police
information at the NCO needs to be improved. The Turkish legislation does not
entail any sanctions against credit institutions which fail to withdraw
counterfeits and medals and tokens similar to euro coins from circulation.
Turkey is a proactive participant in the Pericles programme through trainings
and it has hosted three Pericles events during the last three years. With
respect to Euro coins, a cooperation agreement was signed between OLAF and the
Under-secretariat of the Treasury. Exchange of technical information in this
area works effectively. Turkish institutions
have prepared a Road Map for strengthening the cooperation between the Republic
of Turkey and Europol, to enact the 'Operational Cooperation Agreement' with
Europol. Preparations in the field of protection of the Euro are moderately
advanced.

Conclusion

Some progress can be
reported in the area of financial control, which already has a fairly advanced
level of alignment. Legislation implementing the PFMC Law is fully in force.
The PIFC Policy Paper and the action plan need to be revised. The adoption of
the Turkish Court of Accounts Law was a significant step in further aligning
external audit with relevant international standards. The Turkish AFCOS needs
to continue reinforcing its coordination function, its operational independence
and its operational network. The level of Turkey's overall state of
preparedness in this chapter is moderately advanced.

4.33. 
Chapter 33: Financial and
budgetary provisions

There are no specific
developments to report regarding the preparations for the application of the
own resources system, covering traditional own resources, the VAT
resource and the GNI resource. Alignment with the acquis
under the policy areas (agriculture, customs, taxation, statistics and
financial control) related to the application of this system continued. The
Turkish customs legislation largely complies with the acquis. However,
complementary efforts are necessary for full alignment and implementation.

No progress can be
reported on the administrative capacity and infrastructure required for
the application of the own resources system. Turkey will need to establish
coordination structures and implementing rules for the accurate establishment,
collection, accounting, monitoring, payment and control of own resources, and
reporting to the EU.

Conclusion

Progress in the policy
areas underlying and affecting this chapter can be reported as limited. No
progress can be reported as regards the administrative preparations for setting
up the own resources system itself. Preparedness in the area of financial and
budgetary provisions is at an early stage

Statistical Annex

STATISTICAL DATA (as of 30.09.2011) || || || || || || || || || || || ||

Turkey || || || || || || || || || || ||

|| || || || || || || || || || || ||

Basic data || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Population (thousand) || || 66 889 || 67 896 || 68 838 || 69 770 || 70 692 || 71 610 || 72 520 || 69 689b || 70 586 || 71 517 || 72 561

Total area of the country (km2) || 1) || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562

|| || || || || || || || || || || ||

National accounts || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Gross domestic product (GDP) (million national currency) || || 166 658 || 240 224 || 350 476 || 454 781 || 559 033 || 648 932 || 758 391 || 843 178 || 950 534 || 952 559 || 1 105 101

GDP (million euro) || || 289 446 || 219 816 || 243 570 || 269 322 || 314 304 || 387 655 || 419 013 || 472 879 || 501 339 || 440 942 || 550 506

GDP (euro per capita) || 2) || 4 505 || 3 375 || 3 690 || 4 027 || 4 641 || 5 654 || 6 038 || 6 735 || 7 052 || 6 120 || 7 541

GDP (in Purchasing Power Standards (PPS) per capita) || 2) || 8 000 || 7 400 || 7 400 || 7 400 || 8 600 || 9 500b || 10 500 || 11 300 || 11 700 || 10 700 || 11 800

GDP per capita in PPS (EU-27 = 100) || 2) || 42 || 37 || 36 || 36 || 40 || 42b || 44 || 45 || 47 || 45 || 48

Real GDP growth rate (growth rate of GDP volume, national currency, % change on previous year) || || 6.8 || -5.7 || 6.2 || 5.3 || 9.4 || 8.4 || 6.9 || 4.7 || 0.7 || -4.8 || 8.9

Employment growth (national accounts, % change on previous year) || || : || : || : || : || : || : || : || : || : || : || :

Labour productivity growth: GDP growth per person employed (% change on previous year) || || : || : || : || : || : || : || : || : || : || : || :

Real unit labour cost growth (national accounts, % change on previous year) || || : || : || : || : || : || : || : || : || : || : || :

Labour productivity per person employed (GDP in PPS per person employed, EU-27 = 100) || || 53.4f || 49.2f || 49.2f || 49.8f || 54.1f || 58.2f || 61.7f || 63.7f || 65.4f || 62.0f || 62.3f

Gross value added by main sectors (%) || || || || || || || || || || || ||

Agriculture and fisheries || || 10.8 || 9.4 || 11.4 || 11.1 || 10.7 || 10.6 || 9.4 || 8.5 || 8.5 || 9.1 || 9.4

Industry || || 24.6 || 23.8 || 23.2 || 23.5 || 23.0 || 23.0 || 22.9 || 22.3 || 22.0 || 21.1 || 21.5

Construction || || 5.4 || 4.7 || 4.6 || 4.5 || 5.0 || 5.0 || 5.4 || 5.4 || 5.2 || 4.2 || 4.6

Services || || 59.2 || 62.1 || 60.8 || 60.8 || 61.3 || 61.3 || 62.4 || 63.7 || 64.3 || 65.6 || 64.5

Final consumption expenditure, as a share of GDP (%) || || 82.2 || 80.8 || 80.8 || 83.4 || 83.2 || 83.5 || 82.9 || 84.1 || 82.7 || 86.2 || 85.4

Gross fixed capital formation, as a share of GDP (%) || || 20.4 || 15.9 || 16.7 || 17.0 || 20.3 || 21.0 || 22.3 || 21.4 || 19.9 || 16.9 || 18.7

Changes in inventories, as a share of GDP (%) || || 0.4 || -0.9 || 0.9 || 0.6 || -1.0 || -1.0 || -0.2 || -0.4 || 1.9 || -1.9 || 1.4

Exports of goods and services, relative to GDP (%) || || 20.1 || 27.4 || 25.2 || 23.0 || 23.6 || 21.9 || 22.7 || 22.3 || 23.9 || 23.3 || 21.1

Imports of goods and services, relative to GDP (%) || || 23.1 || 23.3 || 23.6 || 24.0 || 26.2 || 25.4 || 27.6 || 27.5 || 28.3 || 24.4 || 26.6

|| || || || || || || || || || || ||

Industry || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Industrial production volume index (2005=100) || 3) || 79.5 || 72.6 || 79.5 || 86.4 || 94.9 || 100.0 || 107.3 || 114.8 || 114.2 || 102.9 || 116.4

|| || || || || || || || || || || ||

Inflation rate || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Annual average inflation rate (HICP, % change on previous year) || || : || : || : || : || 10.1 || 8.1 || 9.3 || 8.8 || 10.5 || 6.5 || 6.4

|| || || || || || || || || || || ||

Balance of payments || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Balance of payments: current account total (million euro) || || -10 741 || 4 198 || -662 || -6 643 || -11 601 || -17 932 || -25 684 || -28 044 || -28 528 || -10 031 || -36 606

Balance of payments current account: trade balance (million euro) || || -23 882 || -3 755 || -6 758 || -11 925 || -18 278 || -26 590 || -32 698 || -34 186 || -36 049 || -17 816 || -42 480

Balance of payments current account: net services (million euro) || || 12 316 || 10 201 || 8 339 || 9 292 || 10 288 || 12 182 || 10 796 || 9 692 || 11 770 || 12 008 || 10 764

Balance of payments current account: net income (million euro) || || -4 333 || -5 583 || -4 816 || -4 912 || -4 509 || -4 693 || -5 301 || -5 186 || -5 685 || -5 871 || -5 898

Balance of payments current account: net current transfers (million euro) || || 5 158 || 3 335 || 2 573 || 902 || 898 || 1 169 || 1 520 || 1 637 || 1 437 || 1 648 || 1 009

of which government transfers (million euro) || || 221 || 224 || 526 || 257 || 252 || 485 || 495 || 590 || 495 || 853 || 425

Net foreign direct investment (FDI) (million euro) || || 121 || 3 188 || 993 || 1 080 || 1 612 || 7 208 || 15 340 || 14 550 || 11 528 || 4 917 || 5 502

Foreign direct investment (FDI) abroad (million euro) || || -942 || -555 || -151 || -424 || -627 || -855 || -736 || -1 537 || -1 733 || -1 113 || -1 340

of which FDI of the reporting economy in EU-27 countries (million euro) || || -892 || -486 || -50 || -129 || -200 || -347 || -492 || -973 || -574 || -566 || -698

Foreign direct investment (FDI) in the reporting economy (million euro) || || 1 063 || 3 743 || 1 144 || 1 505 || 2 239 || 8 063 || 16 076 || 16 087 || 13 261 || 6 030 || 6 842

of which FDI of EU-27 countries in the reporting economy (million euro) || || 1 226 || 3 178 || 831 || 530 || 1 098 || 3 632 || 11 574 || 9 932 || 8 215 || 3 804 || 4 088

|| || || || || || || || || || || ||

Public finance || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

General government deficit/surplus, relative to GDP (%) || || : || -33.0 || -12.9 || -11.3 || -4.5 || -0.6 || 0.8 || -1.0 || -2.2 || -6.7 || :

General government debt relative to GDP (%) || || : || 77.9 || 74.0 || 67.7 || 59.6 || 52.7 || 46.5 || 39.9 || 40.0 || 46.1 || 41.6

|| || || || || || || || || || || ||

Financial indicators || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Gross foreign debt of the whole economy, relative to GDP (%) || || 44.7 || 57.7 || 56.2 || 47.3 || 41.2 || 35.3 || 39.5 || 38.5 || 37.8 || 43.5 || 39.3

Gross foreign debt of the whole economy, relative to total exports (%) || || 427.0 || 362.5 || 359.3 || 304.9 || 254.9 || 231.2 || 242.8 || 232.6 || 212.3 || 262.8 || 254.0

Money supply: M1 (banknotes, coins, overnight deposits, million euro) || 4) 5) || 12 205 || 8 965 || 9 291 || 13 188 || 15 762 || 38 978b || 38 616 || 44 644 || 39 927 || 49 691 || 65 976

Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) || 4) 6) || 51 591 || 37 253 || 36 325 || 47 398 || 59 415 || 150 152b || 160 193 || 201 366 || 203 840 || 228 237 || 286 595

Money supply: M3 (M2 plus marketable instruments, million euro) ||  4) 7) || 54 207 || 38 973 || 38 041 || 50 488 || 63 411 || 164 302b || 171 832 || 215 308 || 214 473 || 240 246 || 299 805

Total credit by monetary financial institutions to residents (consolidated) (million euro) || || 44 492 || 26 977 || 20 035 || 29 025 || 43 328 || 83 772 || 100 358 || 140 157 || 138 301 || 153 867 || 231 862

Interest rates: day-to-day money rate, per annum (%) || || 56.0 || 95.5 || 49.6 || 36.1 || 22.0 || 15.1 || 15.8 || 17.3 || 16.1 || 9.2 || 6.6

Lending interest rate (one year), per annum (%) || 8) || 51.2 || 78.8 || 53.7 || 42.8 || 29.1 || 23.8 || 19.0 || 20.1 || 19.7 || 19.7 || 14.8

Deposit interest rate (one year), per annum (%) || 9) || 38.2 || 62.2 || 53.9 || 40.3 || 23.6 || 19.9 || 21.5 || 22.3 || 22.9 || 17.2 || 15.0

euro exchange rates: average of period - 1 euro = ... national currency || || 0.574 || 1.094 || 1.430 || 1.685 || 1.768 || 1.670 || 1.800 || 1.778f || 1.896 || 2.151 || 1.989

Effective exchange rate index (2000=100) || || 100.0 || 46.8e || 40.1e || 40.4e || 39.3e || 43.6e || 39.1e || 44.5e || : || : || :

Value of reserve assets (including gold) (million euro) || || 25 331 || 22 660 || 26 949 || 28 134 || 27 654 || 44 277 || 48 116 || 52 058 || 52 442 || 52 160 || 64 874

|| || || || || || || || || || || ||

External trade || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Value of imports: all goods, all partners (million euro) || || 59 444.4 || 46 255.8 || 54 478.3 || 60 136.0 || 78 457.9 || 93 362.5 || 111 054.5 || 123 906.0 || 136 394.9 || 100 712.8 || 138 623.1

Value of exports: all goods, all partners (million euro) || || 30 181.9 || 35 062.2 || 38 137.1 || 41 515.9 || 50 721.1 || 58 778.1 || 67 732.8 || 77 678.6 || 89 023.8 || 72 847.8 || 84 827.9

Trade balance: all goods, all partners (million euro) || || -29 262.5 || -11 193.5 || -16 341.3 || -18 620.1 || -27 736.8 || -34 584.4 || -43 321.6 || -46 227.5 || -47 371.1 || -27 865.1 || -53 795.2

Terms of trade (export price index / import price index) || 10) || 100.0 || 96.4 || 95.2 || 99.8 || 101.7 || 101.0 || 97.0 || 100.3 || 97.2 || 102.0 || 98.2

Share of exports to EU-27 countries in value of total exports (%) || || 56.3 || 56.0 || 56.6 || 58.3 || 58.1 || 56.5 || 56.3 || 56.6 || 48.2 || 46.0 || 46.2

Share of imports from EU-27 countries in value of total imports (%) || || 52.4 || 47.9 || 49.8 || 50.6 || 49.4 || 45.2 || 42.6 || 40.4 || 37.0 || 42.6 || 41.7

|| || || || || || || || || || || ||

Demography || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Natural growth rate: natural change (births minus deaths) (per 1000 inhabitants) || || 14.1 || 13.7 || 13.5 || 13.2 || 12.9 || 12.6 || 12.4p || 11.4b || 11.4 || 10.8 || 11.2

Infant mortality rate: deaths of children under one year of age per 1000 live births || || 28.9 || 27.8 || 26.7 || 25.6 || 24.6 || 23.6 || 22.6 || 16.8 || 16.1 || 15.3 || 13.2

Life expectancy at birth: male (years) || || : || : || : || : || : || : || : || : || : || : || :

Life expectancy at birth: female (years) || || : || : || : || : || : || : || : || : || : || : || :

|| || || || || || || || || || || ||

Labour market || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Economic activity rate (15-64): share of population aged 15-64 that is economically active (%) || || : || : || : || : || : || : || 49.0 || 49.1 || 49.8 || 50.8 || 51.9

- Employment rate (15-64): share of population aged 15-64 in employment (%) || || : || : || : || : || : || : || 44.6 || 44.6 || 44.9 || 44.3 || 46.3

Employment rate male (15-64) (%) || || : || : || : || : || : || : || 66.9 || 66.8 || 66.6 || 64.5 || 66.7

Employment rate female (15-64) (%) || || : || : || : || : || : || : || 22.7 || 22.8 || 23.5 || 24.2 || 26.2

Employment rate of older workers (55-64): share of population aged 55-64 in employment (%) || || : || : || : || : || : || : || 27.7 || 27.2 || 27.5 || 28.2 || 29.6

Employment by main sectors (%) || || || || || || || || || || || ||

Agriculture || 11) || : || : || : || : || : || : || 23.8 || 23.2 || 23.4 || 22.6b || 23.5

Industry || 11) || : || : || : || : || : || : || 21.0 || 20.9 || 21.0 || 19.3b || 20.0

Construction || 11) || : || : || : || : || : || : || 5.9 || 6.0 || 5.9 || 6.2b || 6.4

Services || 11) || : || : || : || : || : || : || 49.3 || 49.9 || 49.7 || 51.9b || 50.2

Unemployment rate: share of labour force that is unemployed (%) || || : || : || : || : || : || 9.2 || 8.7 || 8.8b || 9.7 || 12.5 || 10.7

Share of male labour force that is unemployed (%) || || : || : || : || : || : || 9.1 || 8.6 || 8.7b || 9.6 || 12.5 || 10.4

Share of female labour force that is unemployed (%) || || : || : || : || : || : || 9.3 || 9.1 || 9.1b || 10 || 12.6 || 11.4

Unemployment rate of persons < 25 years: share of labour force aged <25 that is unemployed (%) || || : || : || : || : || : || 17.4 || 16.4 || 17.2b || 18.4 || 22.7 || 19.7

Long-term unemployment rate: share of labour force that is unemployed for 12 months and more (%) || || : || : || : || : || : || : || 2.7 || 2.3 || 2.3 || 2.8 || 2.8

|| || || || || || || || || || || ||

Social cohesion || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Average nominal monthly wages and salaries (national currency) || 12) || : || : || 419.0 || 543.0 || 602.0 || 667.0 || 756.0 || 859.0 || 956.0 || 1 084.0 || :

Index of real wages and salaries (index of nominal wages and salaries divided by the CPI/HICP) (2000=100) || || : || : || : || : || : || : || : || : || : || : || :

- Early school leavers - Share of population aged 18-24 with at most lower secondary education and not in further education or training (%) || 13) || 58.1 || 58.1 || 55.1 || 52.9 || 52.2b || 50.0 || 49.1 || 47.2 || 45.7 || 44.5 || 43.3

|| || || || || || || || || || || ||

Standard of living || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Number of passenger cars per 1000 population || || 66.1 || 66.8 || 66.8 || 67.4 || 76.4 || 80.6 || 84.7 || 92.9 || 96.3 || 99.2 || 104.0

Number of subscriptions to cellular mobile telephone services per 1000 population || || 225.2 || 269.5 || 338.8 || 399.7 || 491.0 || 609.0 || 726.2 || 889.3 || 932.5 || 877.8 || :

|| || || || || || || || || || || ||

Infrastructure || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Density of railway network (lines in operation, per 1000 km2) || || 11.1 || 11.1 || 11.0 || 11.1 || 11.1 || 11.1 || 11.1 || 11.1 || 11.1 || 11.5 || :

Length of motorways (thousand km) || || 1.8 || 1.9 || 1.9 || 1.9 || 1.9 || 1.8 || 2.0 || 2.0 || 2.0 || 2.0 || :

|| || || || || || || || || || || ||

Innovation and research || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Spending on human resources (public expenditure on education in % of GDP) || || 2.6 || 2.3 || 2.8 || 3.0 || 3.0 || 3.1 || 3.0 || 3.3 || 3.0 || 3.9 || 3.7

- Gross domestic expenditure on R&D in % of GDP || || 0.6 || 0.7 || 0.7 || 0.6 || 0.7 || 0.8 || 0.8 || 0.7 || 0.7 || 0.9 || :

Percentage of households who have Internet access at home (%) || 14) || : || : || : || : || 7.0 || 8.0 || : || 19.7b || 25.4 || 30.0 || 41.6

|| || || || || || || || || || || ||

Environment || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

- Greenhouse gas emissions, CO2 equivalent (tons, 1990=100) || || 158.8 || 148.7 || 153.0 || 161.9 || 167.0 || 176.4 || 187.0 || 203.2 || 196.0 || 197.6 || :

Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP) || || 295.2 || 293.2 || 286.8 || 291.5 || 279.2 || 267.1 || 273.3 || 282.0 || 261.5 || 274.0 || :

Electricity generated from renewable sources in % of gross electricity consumption || || 24.3 || 19.1 || 25.6 || 25.2 || 30.9 || 24.7 || 25.5 || 19.1 || 17.3 || 19.7 || :

Road share of inland freight transport (% of tonne-km) || || 94.3 || 95.3 || 95.5 || 94.6 || 94.4 || 94.4e || 94.3 || : || : || : || :

|| || || || || || || || || || || ||

Energy || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Primary production of all energy products (thousand TOE) || || 26 047 || 24 576 || 24 281 || 23 783 || 24 332 || 24 549 || 26 580 || 27 453 || 29 257 || 30 328 || :

Primary production of crude oil (thousand TOE) || || 2 887 || 2 679 || 2 564 || 2 494 || 2 389 || 2 395 || 2 284 || 2 241 || 2 268 || 2 349 || :

Primary production of hard coal and lignite (thousand TOE) || || 12 487 || 12 282 || 11 360 || 10 777 || 10 532 || 11 213 || 13 087 || 14 797 || 16 674 || 17 402 || :

Primary production of natural gas (thousand TOE) || || 582 || 284 || 344 || 510 || 644 || 816 || 839 || 827 || 931 || 627 || :

Net imports of all energy products (thousand TOE) || || 54 291 || 49 536 || 54 234 || 60 505 || 63 232 || 67 266 || 73 256 || 80 596 || 77 413 || 75 295 || :

Gross inland energy consumption (thousand TOE) || || 80 500 || 75 402 || 78 331 || 83 826 || 87 818 || 91 074 || 99 642 || 107 625 || 106 338 || 106 138 || :

Electricity generation (thousand GWh) || || 124.9 || 122.7 || 129.4 || 140.6 || 150.7 || 162.0 || 176.3 || 191.6 || 198.4 || 194.1 || :

|| || || || || || || || || || || ||

Agriculture || Note || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 || 2010

Agricultural production volume index of goods and services (producer prices, previous year=100) || || 104.2 || 93.3 || 108.5 || 98.0 || 101.6 || 106.9 || : || : || : || : || :

Total utilised agricultural area (thousand hectare) || || 38 757 || 40 967 || 41 196 || 40 645 || 41 210 || 41 223 || 40 496 || 39 505 || 39 122 || 38 911 || 39 032

Livestock: cattle (thousand heads, end of period) || 15) || 10 761 || 10 548 || 9 803 || 9 788 || 10 069 || 10 526 || 10 871 || 11 037 || 10 860 || 10 724 || :

Livestock: pigs (thousand heads, end of period) || || 3 || 3 || 4 || 7 || 4 || 2 || 1 || 2 || 2 || 2 || :

Livestock: sheep and goats (thousand heads, end of period) || || 35 693 || 33 994 || 31 954 || 32 203 || 31 811 || 31 822 || 32 260 || 31 749 || 29 568 || 26 878 || :

Production and utilisation of milk on the farm (total whole milk, thousand tonnes) || || : || : || : || : || : || : || : || : || : || : || :

Crop production: cereals (including rice) (thousand tonnes, harvested production) || || 32 108 || 29 426 || 30 686 || 30 658 || 33 957 || 36 471 || 34 642 || 29 256 || 29 287 || 33 577 || 32 749

Crop production: sugar beet (thousand tonnes, harvested production) || || 18 821 || 12 633 || 16 523 || 12 623 || 13 517 || 15 181 || 14 452 || 12 415 || 15 488 || 17 275 || 17 942

Crop production: vegetables (thousand tonnes, harvested production) || || 22 357 || 21 930 || 23 698 || 24 018 || 23 215 || 24 320 || 24 017 || 25 676 || 27 218 || 26 780 || 25 997

: = not available

p = provisional

e = estimated value

b = break in series

f = forecast

- = Europe 2020 indicator

The balance of payments
sign conventions are used for FDI. For FDI abroad a minus sign means investment
abroad by the reporting economy exceeded its disinvestment in the period, while
an entry without sign means disinvestment exceeded investment. For FDI in the
reporting economy an entry without sign means that investment into the
reporting economy exceeded disinvestment, while a minus sign indicates that
disinvestment exceeded investment.

Footnotes:

1)             Including lakes.

2)             Mid-year population
figures used.

3)             Industrial production
index according to NACE Rev. 2; index data prior to 2005 are backcasted using
exchange ratio regarding average of 1997 and 2005 years

4)             Before December 2005,
M1 included currency in circulation and demand desposits (TRY). From December
2005 onwards, M1 included currency circulation and demand deposits (TRY,FX).

5)             Monetary liabilities
of Participation Banks, Investment and Development Banks and amount of Money
Market Funds are added to money supply data beginning from December 2005.

6)             Before December 2005,
M2 included M1 and time deposits (TRY). From December 2005 onwards, M2 included
M1 and time deposits (TRY,FX).

7)             Before December 2005,
M3 included M2 and official deposits (time/demand). From December 2005 onwards,
M3 included M2, fund received from repo transactions and money market funds (B
type liquid funds). Also beginning from December 2005, deposits of Central
Government are removed from M3 and other general government deposit items are
classified in M1 and M2 according to maturity.

8)             Averages of monthly
data, lending to enterprises more than one year.

9)             Averages of monthly
data, up to one year or longer.

10)           Indices were based on
1994 from 1995 to 2002, after 2002, based on 2003. The base year of the both
indices has been rearranged as 2000=100.

11)           Data for 2006-2008 based on NACE Rev.1.1, data for 2009-2010 based on
NACE Rev.2

12)           2002-2005, data based
on Household Budget Survey, 2006-2009, data based on Income and Living
Conditions Survey.

13)           Annual LFS results; the
variable "participation in non formal education or training
(COURATT)" was added into the calculation from 2004.

14)           From 2007 onwards, calculated
according to mid-year population estimates.

15)           Excluding buffaloes.

[1]               The rapporteur for Turkey is Mrs Oomen-Ruijten.

[2]               Enlargement Strategy and Main Challenges 2011-2012 -
COM(2011) 666.

[3]               The decision states that negotiations will not be
opened on eight chapters relevant to Turkey's restrictions regarding the
Republic of Cyprus and no chapter will be provisionally closed until the
Commission confirms that Turkey has fully implemented the Additional Protocol
to the Association Agreement.

[4]               Union of
Communities in Kurdistan

[5]               On 15 February, the main opposition party (CHP)
applied to the Constitutional Court for annulment of this law.

[6]               An April
2010 amendment to the Law on fundamental principles of elections and the
electoral registry deleted the explicit prohibition of
use of languages other than Turkish, thus allowing oral and written advertising
in languages other than Turkish during the election campaign.

[7]               HADEP was closed by the
Constitutional Court and 46 party activists were banned from politics on
accusations that the party was aiding and abetting the PKK. The ECtHR pointed
to lack of sufficient evidence in support of these claims.

[8]               In addition, the Congress of Local and Regional
Authorities adopted a report making recommendations on local and regional
democracy in Turkey on 24 March 2011. These recommendations include re-examining
Turkey's obligations under the Charter of Local Self-Government, with a view to
removing the reservations entered in respect of many of its terms, and taking
steps to sign and ratify the Framework Convention for the Protection of
National Minorities and the European Charter for Regional or Minority Languages

[9]               The defendants are accused of
the November 2005 bombing that killed one person and injured others in the town
of Şemdinli in South-East Turkey.

[10]             The number of full members of the High Council
increased from seven to twenty-two. In addition to representatives of the Court
of Cassation and the Council of State, the new members include representatives
of first-instance courts, the Justice Academy, law faculties and lawyers.

[11]             In April 2011 the High Council introduced a new
assessment system and criteria aimed at providing transparency of the process,
guaranteeing judicial independence and avoiding improper interference with the
judges' and prosecutors' private lives. There is yet no track record of
implementation of these new provisions.

[12]             The civilian prosecutor in this case published the
indictment in early 2006. It included accusations against high-ranking military
commanders. The General Staff criticised the indictment and urged those bearing
constitutional responsibility to take action. The then High Council took the
dismissal decision in April 2006.

[13]             There are three voting rounds in parliament. In the third,
the candidates are elected by simple majority.

[14]             As a rule, defendants and their
lawyers should have access to documents pointing to their innocence or guilt
early in the proceedings. Limitations to this right must be justified by the
need to protect a specific public interest and be allowed by a judge's
decision.

[15]             The government adopted a 2010-2014 strategy for
enhancing transparency and strengthening the fight against corruption in
February 2010.

[16]             The Executive Committee for Increasing Transparency and
Fighting Corruption is made up of representatives of public institutions, trade
unions and the Turkish Union of Chambers and Stock Exchanges (TOBB). Its task
is to form further anti-corruption strategies and monitor implementation. The
Prime Ministerial Inspection Board has been appointed with the task of
providing technical support and secretariat services to the Executive
Committee.

[17]             Protocols 4, 7 and 12.

[18]             Non-implementation of the Hulki
Güneş, Göçmen and Söylemez judgments has resulted in the defendants being
deprived of liberty for several years without due process of law. A legislative
amendment is required to remedy this situation. Furthermore, Turkey has not
adopted legal measures to prevent repetitive prosecution and conviction of
conscientious objectors. Other issues awaiting legislative measures by Turkey
concern control of the activities of security forces, effective remedies
against abuse, restrictions on freedom of expression and excessive length of
pre-trial detention.

[19]             http://www.cpt.coe.int/documents/tur/2011-13-inf-eng.htm.

[20]             Articles 256 (“excessive use of force”) or 86
(“intentional injury”) of the Turkish Penal Code are often used to issue
lighter sentences instead of Articles 94 (“torture”) or 95 (“aggravated torture
due to circumstances”) which stipulate heavier sentences.

[21]             In April the ECtHR found Turkey in violation of Article
5.1 of the ECHR in the Pulatlı vs. Turkey case. The ECtHR held,
unanimously, that there had been a violation of Article 5 § 1 of the ECHR and
that these incidents are systemic problems deriving from disciplinary sanctions
imposed by higher-ranking officers for breaches of military discipline, which
are not subject to judicial review.

[22]             The probation system dealt with 104,622 persons
nationwide in 2010 and the number of judgments including probation sentences
increased by 33% from 63,449 in April 2010 to 84,526 in April 2011.

[23]             In April, there were 123,916
prisoners in penitentiaries; 69,648 of them had been convicted but there were
35,084 inmates whose cases were pending.

[24]             The number of children in prison
is 506.

[25]             One example is the Ürper and others v. Turkey case,
where the ECtHR ruled that Turkey should revise Article 6(5) of the
Anti-Terror Law.

[26]             In January 2011, the RTÜK warned Show TV for portraying
the country's Ottoman-era sultans as drinkers and womanisers in the popular TV
series the “Magnificent Century”.

[27]             In January 2011, Habertürk was
fined for “showing homosexuality as normal, thus violating the Turkish family
structure”.

[28]             In January 2011, ATV was warned for showing two men in
bed in a TV series, thus violating the Turkish family structure. In March, the
RTÜK launched an administrative procedure against Digitürk, which aired “Sex
and the City 2” on one of its coded channels, for showing a homosexual wedding
scene.

[29]          Under Article 69(9) of the Constitution, the Constitutional Court
banned 46 HADEP members
and leaders from becoming founder members, ordinary members, leaders or
auditors of any other political party for a period of five years. The
Constitutional Court also ordered the transfer of HADEP's
property to the Treasury. The decision of the Constitutional Court became final
following its publication in the Official Gazette on 19 July 2003.

[30]          On 2
July 1993 a mob besieged the Madimak Hotel in Sivas that was hosting a Pir
Sultan Abdal culture festival. The hotel was set on fire, resulting in the
death of 37 people – mostly Alevi writers, poets and artists participating in
the festival. In a symbolic gesture, in 2009 the Ministry of Culture started
discussions to establish a cultural centre in the Madimak Hotel in memory of
the victims of the 1993 events.

[31]             In October 2007 the ECtHR found that these classes did
not just give a general overview of religions but provided specific instruction
in the guiding principles of the Muslim faith, including its rites. The Court
requested Turkey to bring its education system and domestic legislation into
line with Article 2 of Protocol 1 to the ECHR.

[32]             In March 2010, the Venice Commission of the Council of
Europe concluded that the fundamental right to freedom of religion, as
protected by Article 9 read in conjunction with Article 11 of the ECHR,
includes the possibility for religious communities to obtain legal personality.

[33]             The Law on public works was
amended as part of the sixth reform package, followed by a circular in
September 2003 replacing the word “mosque” with the phrase “places of worship”.

[34]             Originally filed in October 2006, this case under
Article 301 of the Turkish Criminal Code accused two former Muslims who
converted to Christianity, of insulting Turkishness and the Muslim religion
while involved in evangelistic activities in Silivri, west of Istanbul.

[35]             The reports issued to date
cover early marriages, violence against women, bullying at work, pressure on
women due to the gender of the child and traditional forms of marriage. The
TGNA Committee's report on early marriages establishes a direct correlation
between poverty, lack of education and early marriages. It also addresses the
role of tradition and religious misperceptions.

[36]             According to the report by the
DG on Women's Status on the education sector, where the female employment rate
is relatively high, only around 9% of the 58,835 managerial positions in
schools are occupied by women. In higher education institutions, only around 5%
of rectors and 15% of deans are women.

[37]             Official figures indicate that
83 women were killed in 2003, 164 in 2004, 317 in 2005, 663 in 2006, 1,011 in
2007, 806 in 2008 and 953 during the first seven months of 2009. Although this
increase might also reflect improved collection of information, it nevertheless
illustrates the challenge Turkey is facing.

[38]             Application No 33401/02 concerning the Turkish
authorities' failure to protect the applicant and her mother from domestic
violence.

[39]             The February 2008 Law on foundations set an initial
deadline of 27 August 2009 for non-Muslim foundations to submit applications
for the restitution of properties registered under figurative or fictitious
names, or in the name of the Treasury or of the Directorate-General for Foundations.
A total of 108 foundations submitted 1,410 applications for restitution of
properties. The 27 August 2009 deadline was extended to give foundations time
to submit all the documents required.

[40]             As regards this case and the issue of just satisfaction,
the ECtHR judgment of 15 June 2010 found that Turkey had to re-register the
property in question in the land register in the applicant's name.

[41]             The Deputy Head of these
schools represents the Turkish Ministry of Education and has more powers than
the Head.

[42]             The Administrative Court emphasised that
"protective measures remained on paper and precautionary measures for
[Dink's] protection had not been put into action".

[43]             KCK stands for Koma Komalen
Kurdistan, which means Kurdistan Communities Union.

[44]             Under UNSCR 1244/1999.

[45]             Between January 2010 and May 2011, the number of public
servants with disabilities rose from 14,325 to 19,915. However, the target was
to reach 48,549, amounting to 3%of the total number of public servants.

[46]             The legislation increases the number of full members of
the High Council from seven to twenty-two. In addition to representatives of
the Court of Cassation and the Council of State, the new members include
representatives of first-instance courts, the Justice Academy, law faculties
and lawyers.

[47]             The government adopted a 2010-2014 strategy for
enhancing transparency and strengthening the fight against corruption in
February 2010.

[48]             The Executive Committee for Increasing Transparency and
Fighting Corruption is made up of representatives of public institutions, trade
unions and the Turkish Union of Chambers and Stock Exchanges (TOBB). Its task
is to form further anti-corruption strategies and monitor implementation. The
Prime Ministerial Inspection Board has been appointed with the task of
providing technical support and secretariat services to the Executive
Committee.