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# 52012SC0336

**COMMISSION STAFF WORKING DOCUMENT TURKEY 2012 PROGRESS REPORT accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Enlargement Strategy and Main Challenges 2012-2013 /\* SWD/2012/0336 final \*/**

  

TABLE OF CONTENTS

1........... Introduction. 4

1.1........ Preface. 4

1.2........ Context 4

1.3........ Relations between the EU
and Turkey. 4

2........... Political criteria and
enhanced political dialogue. 6

2.1........ Democracy and the rule of
law.. 7

2.2........ Human rights and the
protection of minorities. 18

2.3........ Regional issues and
international obligations. 35

3........... Economic criteria. 37

3.1........ The existence of a
functioning market economy. 37

3.2........ The capacity to cope with
competitive pressure and market forces within the Union. 41

4........... Ability to take on the
obligations of membership. 43

4.1........ Chapter 1: Free movement
of goods. 43

4.2........ Chapter 2: Freedom of
movement for workers. 46

4.3........ Chapter 3: Right of
establishment and freedom to provide services. 46

4.4........ Chapter 4: Free movement
of capital 47

4.5........ Chapter 5: Public
procurement 48

4.6........ Chapter 6: Company law.. 50

4.7........ Chapter 7: Intellectual
property law.. 50

4.8........ Chapter 8: Competition
policy. 52

4.9........ Chapter 9: Financial
services. 52

4.10...... Chapter 10: Information
society and media. 53

4.11...... Chapter 11: Agriculture. 55

4.12...... Chapter 12: Food safety,
veterinary and phytosanitary policy. 56

4.13...... Chapter 13: Fisheries. 57

4.14...... Chapter 14: Transport
policy. 58

4.15...... Chapter 15: Energy. 60

4.16...... Chapter 16: Taxation. 62

4.17...... Chapter 17: Economic and
monetary policy. 63

4.18...... Chapter 18: Statistics. 64

4.19...... Chapter 19: Social policy
and employment 64

4.20...... Chapter 20: Enterprise and
industrial policy. 67

4.21...... Chapter 21: Trans European
Networks. 68

4.22...... Chapter 22: Regional policy
and coordination of structural instruments. 69

4.23...... Chapter 23: Judiciary and
fundamental rights. 70

4.24...... Chapter 24: Justice,
freedom and security. 75

4.25...... Chapter 25: Science and
research. 79

4.26...... Chapter 26: Education and
culture. 80

4.27...... Chapter 27: Environment and
climate change. 82

4.28...... Chapter 28: Consumer and
health protection. 84

4.29...... Chapter 29: Customs Union. 85

4.30...... Chapter 30: External
relations. 86

4.31...... Chapter 31: Foreign,
Security and Defence Policy. 87

4.32...... Chapter 32: Financial
control 89

4.33...... Chapter 33: Financial and
budgetary provisions. 91

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 take on
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 2011 to September 2012. 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 Turkey the status of candidate
country. 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

The Positive
Agenda endorsed by the Council in December 2011 was launched. It aims to
support and to complement the accession negotiations through enhanced cooperation in a number of areas of joint
interest: political reforms, alignment with the acquis, dialogue on
foreign policy, visas, mobility and migration, trade, energy, counter terrorism
and participation in Community programs. Eight working groups aimed at
encouraging alignment with the acquis were set up and six of them had
their first meeting. The Commission will assess whether Turkey has met the
benchmarks and inform Turkey and the Member States accordingly.

The Council
invited the Commission to take steps towards visa liberalisation as a gradual
and long-term perspective, in parallel with the signing of the readmission
agreement between Turkey and the EU which was initialled in June. It is now
crucial that Turkey signs the readmission agreement to allow for a proper
roadmap to be finalised, effectively starting the process.

With a view to
Turkey’s further development as a potential energy hub and given the common
challenges it shares with the EU, Turkey and the Commission also decided to
enhance their cooperation on a number of important energy issues.

To prepare for
accession negotiations, Turkey’s readiness to start negotiations on individual
chapters was assessed on the basis of screening reports. Out of a total of 33
screening reports, nine are pending in the Council while one has yet to be
delivered.

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. Political
dialogue meetings were held at ministerial level in March and June 2012 and at
political directors’ level in February 2012. 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 North Africa, the Middle East, Western Balkans,
Afghanistan/Pakistan and the Southern Caucasus, were also regularly discussed.
Turkey has become increasingly active in its wider neighbourhood and is a
leading regional player. The Council acknowledged the influential regional role
of Turkey in supporting reform, including with regard to recent developments in
North Africa. Turkey has also been vocal on Syria, condemning strongly and
repeatedly the regime’s violence against civilians and providing vital
humanitarian assistance to nearly 100,000 Syrians who fled the country. A
number of high-level visits to the European institutions took place during the
reporting period.

Turkey decided
to freeze its relations with the Presidency of the Council of the EU during the
second half of 2012 and not to
attend meetings chaired by the Cyprus EU Presidency. The European Council expressed
serious concerns with regard to Turkish statements and threats and called for
full respect for the role of the Presidency of the Council, which is a
fundamental institutional feature of the EU provided for in the Treaty.

Progress on the
reform priorities is encouraged and monitored by the bodies set up under the Association
Agreement. The Association Committee met in April 2012 and the Association
Council in June 2012. Eight sectoral sub-committee meetings have been held
since November 2011.

The multilateral
economic dialogue between the Commission, EU Member States and Candidate
Countries in the context of pre-accession fiscal surveillance continued,
including a meeting at ministerial level in May in Brussels.

The EU-Turkey Customs
Union continues to boost bilateral trade between the EU and Turkey, which
totalled € 120 billion in 2011. Turkey is the EU’s sixth biggest trading
partner while the EU is Turkey’s biggest. A bit less than half of Turkey’s
total trade is with the EU and almost 75% of foreign direct investment flows in
Turkey, with a strong high-technology component, 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 remain unfulfilled, in areas 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. The Commission is launching an external
evaluation to assess the strengths of the Customs Union as implemented so far,
its weaknesses (or limitations) and the opportunities arising from its possible
modernisation. 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.

As regards financial
assistance, € 856 million have been earmarked for Turkey from the
Instrument for Pre-accession Assistance (IPA) for 2012. In line with the
Multiannual Indicative Planning Document (MIPD) for 2011-2013 importance has
been given to further advance a sector-based approach which aims to better
focus assistance on political priorities. Support is focused 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.

IPA assistance
is subject to decentralised management, which means that it is managed by the
Turkish authorities following an accreditation process carried out by the
Commission. In 2012 progress was made with regard to strengthening the
institutional framework for IPA Components as the accreditation process has
been finalised for the Operating Structures in the areas of Regional
Competitiveness and Human Resources Development programmes. Nevertheless,
delays in the implementation of IPA assistance continued to occur and Turkey
needs to further strengthen its administrative capacity to address weaknesses in adopting the sector
approach in programming, to speed up the implementation process, to improve the
quality of programmes and projects and to avoid loss of funds.

Support to civil
society continues with the implementation of previously programmed EU
financial assistance for civil society capacity building and civil society
dialogue between Turkey and the EU, both under the national programme and the
Civil Society Facility.In parallel an impact assessment of EU-Turkey Civil
Society Dialogue was launched to draw conclusions for future assistance in this
area.

Turkey actively
participates in the following EU Programmes and Agencies: the Seventh
Research Framework Programme, Customs 2013, Fiscalis 2013, the European
Environment Agency, the Competitiveness and Innovation Framework Programme
(including the Entrepreneurship and Innovation Programme and the 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. Turkey has not yet
completed ratification for the agreement on its participation in the European
Monitoring Centre for Drugs and Drug Addiction.

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

Work on a new constitution started and a
democratic and participatory process was put in place. The rest of political
life was characterised by limited dialogue and frequent tensions.

Trials of the alleged deep-state criminal
network Ergenekon and the ‘Sledgehammer’ trial concerning an alleged
coup plan continued. In the ‘Sledgehammer’ trial a first instance court on 21
September sentenced a total of 324 suspects (out of 365), including three
former army commanders, to 13-20 years on charges of attempting to remove or
prevent the functioning of the government through force and violence. The Court
handed down mass verdicts. The judicial process is on-going. In the Ergenekon
case, according to official data, the number of defendants has risen to 279, of
whom 65 are under arrest. The landmark trial of the 1980 coup perpetrators,
made possible by amendments to the constitution in 2010, began in April 2012.
Investigations into military intervention in politics, including the 28
February ‘Postmodern Coup’ of 1997 followed. The armed forces’ former chief of
staff was arrested in January 2012 on charges of attempting to overthrow the
government and of membership of a terrorist organisation.

Concerns persisted over the rights of the
defence, lengthy pre-trial detention and excessively long and catch-all
indictments, leading to significantly enhanced public scrutiny of the
legitimacy of these trials. Offering a chance to strengthen confidence in the
proper functioning of Turkey’s democratic institutions and the rule of law,
these cases have been overshadowed by real concerns about their wide scope and
the shortcomings in judicial proceedings. Moreover, they tend to contribute to
the polarisation of Turkish politics.

Judicial proceedings need to be speeded up
to ensure the rights of the defence and to promote transparency in these cases.
Investigations tend to expand rapidly; the judiciary accepts mainly evidence
collected by the police only, or supplied by secret witnesses.

In July 2012,
404 active-duty military personnel were involved in on-going court cases as
suspects, 207 of whom were in detention, among whom a former Chief of General
Staff.

The Kurdish
issue remains a key challenge for Turkey’s democracy. A meeting was held
between the Prime Minister and the leader of the main opposition party CHP on
the initiative of the latter, looking for opportunities to make progress on the
Kurdish issue. There was no follow-up. The 2009 democratic opening, aimed at
addressing amongst others the Kurdish issue, was not followed through.

Turkey suffered
a significant increase in terrorist attacks by the PKK, which is on the EU list
of terrorist organisations. The attacks were strongly condemned by the EU.

The
investigation into the Union of Communities of Kurdistan (KCK), the alleged
urban wing of the PKK, significantly expanded. Increasing numbers of
BDP-affiliated Kurdish politicians, locally elected mayors and members of
municipal councils were detained, adversely affecting regional and local
democracy.

The killing of
34 civilians in Uludere (Şırnak) in a military air strike in December 2011, and
the absence of a transparent public inquiry into the events, also damaged
confidence. There has been no discussion of political responsibility.

Due attention
needs to be paid to upholding the rule of law in the anti-KCK investigation and
to ensuring that an effective and transparent public inquiry into the Uludere
air strike takes place. Revision of the constitution provides an opportunity to
address a number of long-standing problems in Turkey, in particular the Kurdish
issue.

Constitution

Work on a new constitution started with the
setting up of a Constitution Conciliation Committee, following
inter-party agreement on equal representation and a decision to avoid setting
preconditions for the substance of a new text. The committee is composed of
three members from each of the four political groups in parliament. Its working
principles reflect a commitment to inclusiveness and consultation and provide
for unanimity in decision-making and termination of the committee’s mandate if
any one party withdraws.

The Conciliation Committee held public
consultations with a broad range of stakeholders between November 2011 and
April 2012 to receive the views of political parties not represented in
parliament, of state bodies, professional associations, trade unions and
non-governmental organisations. For the first time ever, representatives of
non-Muslim minorities were officially received by parliament. Members of the
committee also took part in public events around Turkey organised by civil
society platforms. A website was set up to gather written opinions, returning
over 25,000 contributions. An abundance of local and national civic initiatives
also ensured lively debate among citizens and in the media.

However, it is unclear what the follow-up
of the committee’s work will be. The current Constitution (Article 175) only
provides for amendment of the existing text. There are some limits on
transparency, with submissions to the committee by civil society and others
removed from or not published on the internet.

Regarding the substance of the
constitution, the key challenges to consensus include views on the separation
of powers, state-society-religion relations and the Kurdish issue (citizenship,
use of the mother-tongue, and decentralisation). The BDP was the only political
party to take a firm position when it presented a detailed note on the
fundamental rights and freedoms chapter in July. The possibility of introducing
a presidential or semi-presidential system of government was debated.

Further progress in implementing the 2010
constitutional amendments has been limited. The law on civil servants’ trade
unions was amended to include provisions on their right to collective
bargaining, while laws on collective bargaining, strikes and lockouts for private
sector employees and the establishment and duties of the Ministry of Justice,
Protection of Personal Data and military justice are still pending.

Overall,
positive steps have been taken in terms of work on a new constitution. A
democratic and participatory process has been put in place, albeit with some
limitations on transparency. The new constitution should 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, in
particular the Kurdish issue. Maintaining a spirit of compromise and ensuring
the broadest possible consultation remain key for the legitimacy of a new
constitution. Further progress in implementing the 2010 constitutional amendments
has been limited.

Parliament

The new parliament convened on 1 October
2011 with all parties represented, following a protracted oath-taking crisis
over the courts’ refusal to release eight MPs-elect from pre-trial detention.
Work on political reforms and the parliament’s ability to perform its key
functions of law-making and oversight of the executive continues to be hampered
by the persistent lack of dialogue and spirit of compromise among political
parties.

The CHP proposed a legislative amendment to
the Code on Criminal Procedures to set the MPs-elect free; it was not supported
by the majority. An initiative of the Speaker of the parliament to seek
consensus among the four political groups on a possible legal solution to the
issue did not produce results. Courts rejected the petition of the MP’s elect
for release on probation pending trial, submitted further to the adoption of
the third judicial reform package in July.

The overall scope of parliamentary immunity
remains wide, except in cases concerning MPs freedom of expression, which are
subject to a restrictive interpretation of the Constitution (in particular
Article 14). This continues to be an issue of concern. A total of 740 requests
by prosecutors for the lifting of parliamentary immunity are pending,
concerning a total of 101 members of parliament, the majority concerning the
BDP-bloc. A BDP-affiliated MP-elect, whose conviction to two years imprisonment
for a speech pronounced 6 years ago was upheld by the Court of Cassation, risks
permanently losing his seat once the Parliament speaker sets in motion the
applicable procedures following such a ruling.

Insufficient preparation and consultation
prior to the adoption of key legislation triggered strong criticism. This
included the new education law, a law on caesarean section deliveries, a law
granting immunity from judicial scrutiny to intelligence officers and public
officials assigned specific tasks by the Prime Minister and the abolition of
the Serious Crimes Courts.

Regarding the legislative framework,
a law to facilitate out-of-country voting— targeting around 2.5 million Turkish
voters residing mainly in the EU — was adopted. No further important changes
were made to the electoral system. The 10% national threshold for obtaining
seats in parliament remains the highest among Council of Europe member states.
There has been no progress in aligning the law on the closure of political
parties or laws on the financing of political parties and election campaigns
with European standards.

Concerning the functioning of parliament,
the representation of all mainstream political views following the June 2011
elections and its lead role in work on a new constitution increased the profile
of the parliament. An ad hoc committee was set up by consensus among the four
main political groups to investigate all coups in the history of the Republic;
further parliamentary committees were created to probe the 28 February ‘Postmodern
Coup’ and the alleged state violence in Tunceli (Dersim) in 1937-38, and to inquire
into the Uludere incident in December 2011.

The Human Rights Inquiry Committee heard
numerous experts including prominent Kurds while examining human rights
violations linked to terrorism and the fight against terrorism (through the
Sub-Committee on Investigating Violations of Right to Life within the
Scope of Acts of Terrorism and Violence).

Several important pieces of legislation
were adopted, in particular laws on the protection of family and prevention of
violence against women, probation, collective bargaining for civil servants,
the Ombudsman Institution and the national human rights institution.
Nevertheless, in none of these cases did improvements fully bring the necessary
alignment with the acquis or with European standards. The EU Harmonisation
Committee remains an auxiliary committee with a limited mandate and ability to
scrutinise legislation.

The parliament’s role in addressing key
policy challenges continues to be limited. Further efforts are needed to
achieve systematic consultation with civil society and other stakeholders
throughout the process. There was no progress in improving the parliament’s
capacity to monitor performance and audit public expenditure, including defence
expenditure, despite the improvement in the overall legal framework with the
entry into force of the new Law on the Turkish Court of Accounts (TCA) in 2011.

The law on the administrative organisation
of parliament was amended in December 2011, partly to transfer responsibility
for the parliament’s security from the military to the police. A proposal to
set up a parliamentary legislative academy to strengthen expertise was
approved. However, more comprehensive reform of the rules and procedures was
abandoned, including key elements such as the introduction of planning for the
legislative agenda and strengthening the oversight role of the committee
system. Few of the capacity concerns identified by the 2010 Parliament/SIGMA
peer review have so far been addressed. [4]

Overall, the parliament’s involvement in addressing key policy challenges
improved on a few selective topics. However, proper functioning of the
parliament, including the parliamentary committees, based on dialogue among all
parties, has yet to be ensured. Despite improvements, capacity constraints
remain, in particular with regard to public financial management of military
expenditure. Due attention needs to be paid to reform of the legislative
framework, particularly the laws on elections and political parties and
parliament’s rules and procedures, to strengthen parliament’s ability to
perform its key tasks including oversight of the executive. Consultation of
civil society remains the exception rather than the rule.

President

The President stressed the need for a new
constitution and expressed concern over the arrest of journalists, maintaining
a conciliatory role across Turkey’s political spectrum in carrying out his
functions.

The January 2012 Law on Presidential
Elections and the June Constitutional Court ruling on the same issue ended a
long-time controversy over the mandate of President Gül. Accordingly, the
incumbent president’s term in office is seven years and he is eligible for
re-election. The term of office of the new President — to be directly elected
in 2014 — will be five years, renewable for one additional term.

Government

In its Annual Plan for 2012 and its
Medium-Term Programme for 2012-2013 the government committed itself to
further democratisation and political reforms through work on a new
constitution intended ‘to meet the aspirations and demands of a modern
democracy and represent the interests of all citizens of Turkey’. Judicial
reform and the normalisation of civilian-military relations remain priorities
of the government.

The government continued to reiterate its
commitment to EU accession and frequently criticised the political stalemate in
the accession negotiations. The ministerial Reform Monitoring Group met twice.

In a significant symbolic gesture in
November 2011, the Prime Minister expressed readiness to account for crimes
carried out by the state in the predominantly Kurdish Alevi region of Tunceli
(Dersim) in 1937-38.

However, there has been no discussion of
political responsibility regarding the Uludere incident and rhetoric on a new
government strategy for the Kurdish issue has not translated into progress
towards a political solution. (See Situation in the east and south-east)

Key legislation was adopted with
insufficient preparation and consultation, triggering strong criticism.

Members of the government reacted virulently
to criticism voiced by the media or civil society, and brought court cases on a
number of occasions, for instance when criticised for supposed nationalist
tendencies.

There was little progress on devolving
powers to local government. Administrative decentralisation has not been
addressed; in fact, decree-laws issued in 2011 provide for the
re-centralisation of some powers, mainly in the fields of land use planning and
urban renewal. City councils, designed to encourage
citizens’ participation in local government, functioned effectively in only a
limited number of cities.

There was no progress on removing
administrative tutelage and allowing the use of languages other than Turkish in
the provision of public services as recommended by the Council of Europe’s
Congress of Local and Regional Authorities, and the courts ruled inconsistently
on the use of more than one language by municipal authorities. Despite several
non-prosecution and acquittal decisions, judicial proceedings against mayors
and municipal councils for the use of languages other than Turkish in the
provision of services were reported. The Ministry of the Interior provisionally
suspended 55 local government representatives, including the elected mayors of
Van, Şırnak, Silopi, İdil, Uludere and Cizre, alongside several members of
municipal and provincial assemblies detained in anti-KCK operations. In one
case – Siirt – a mayor’s dismissal was suspended following the entry into force
of the third judicial reform package (See Situation in the east and
south-east)

Overall, the
government committed itself to further democratisation and political reforms
through work on a new constitution. However, key legislation was presented and
adopted with insufficient preparation and consultation. In incidents such as
the Uludere killings of civilians, calls on the authorities for effective and
swift investigation and a transparent public inquiry have not been met. Local
government in the south-east suffered from the detention of numerous local
politicians. Further efforts are needed on administrative decentralisation.

Public administration

After
consultation with the European and other Ombudsmen the Law on the Ombudsman
Institution was adopted on 14 June. The law provides
that the Institution is answerable to parliament and that no one shall issue
instructions to it. The Ombudsman Institution has a Head Ombudsman and a
maximum of five Ombudsmen, a secretary general and staff, and a separate
budget. Local offices throughout the country can be established. The Head
Ombudsman is elected by parliament in up to four rounds of voting; in the
fourth, he or she is elected by simple majority. Implementation of this
provision and, in particular, the choice of the first Head Ombudsman is crucial
for the credibility of the Institution. The Ombudsman Institution examines
complaints and makes suggestions concerning the functioning of the
administration with respect to the rule of law and human rights. However, it
does not have the right to conduct inquiries on its own initiative. Its mandate
covers administrative acts of the Turkish Armed Forces and excludes their
military acts. Implementation of this provision is crucial: This relates in
particular to who decides on what falls under the Institution’s remit, and on which basis. The law as it stands does not set out any decision-making process of
the Ombudsman Institution, but leaves the matter to a regulation to be adopted
by its Board. It is essential for the authority and independence of the
institution that this decision-making process leaves the final say with the
Head Ombudsman.

A comprehensive
civil service reform aiming to improve public human resources management and
ensuring merit-based advancement is still needed. A decree law of 2011 allows
temporary and contract staff to be granted civil service status at a similar
rank. It carries the risk of circumventing recruitment procedures, politicising
the civil service and weakening the merit system. The increased
ministerial powers introduced in August 2011 over the independent regulatory
authorities remained, and in at least one instance — in relation to the Energy
Directive — run counter to EU legislation.

Administrative
simplification and work on providing basic public services online
(e-government) continued. A large number of regulations on administrative
simplification were adopted in April 2012. However, no progress was made with
developing regulatory impact assessments with a view to increasing the quality
of legislation. In particular, no regulatory impact assessment was conducted
prior to the adoption of certain key legislation, including the education
reform of March 2012. There was an increasing tendency to draft and adopt
legislation without appropriate consultation of civil society and other
stakeholders.

Almost all
implementing legislation relating to the revised Turkish Court of Accounts
(TCA) Law was adopted. This strengthened external audit. However, further
efforts are needed to implement the TCA Law. In particular, parliament needs to
ensure follow-up of TCA audit reports. The July 2012 amendments to the law on
the TCA seriously curtailed the powers of the TCA and jeopardize the
independence and effectiveness of the TCA audit and control. Implementation of
the Law on Public Financial Management and Control continued, with the
introduction of strategic planning and performance budgeting. All line
ministries and major public agencies prepared performance programmes and
accountability reports. However, such planning activities need to be better
coordinated with the budget. Additional efforts are required to strengthen the
capacity of strategy development units and to implement strategy documents. The
internal audit system is not effective and continued to suffer from confusion
between the objectives, roles and responsibilities of internal audit and
inspectorate functions. Additional internal audit staff needs to be recruited.

Overall, progress has been made in legislative reforms with regard to public
administration. The establishment of an Ombudsman’s office is an important step
in safeguarding the rights of citizens and ensuring that public administration
is accountable. External audit and public financial management and control have
been strengthened, but recent amendments to the TCA law raise serious concerns regarding
the independence and effectiveness of the TCA audit and control. Administrative
simplification continued. However, comprehensive civil service reform will
require greater political support.

Civilian oversight of security forces

There was further consolidation of civilian
oversight of the security forces, and the General Staff generally abstained
from exerting direct or indirect pressure on political issues. In January 2012,
the national security course given by military officers was removed from the
secondary school curriculum. Nonetheless, in January the Chief of General Staff
criticised the use of the Kurdish language in public education.

Implementation of the law providing legal
remedies to earlier dismissals from the Armed Forces continued.

Ending a lengthy trial process marred by
disputes over jurisdiction, the Third High Criminal Court in Van sentenced two
non-commissioned officers and a PKK informant to 40 years in prison in the ‘Şemdinli
case’ relating to the bombing in 2005 of a bookstore allegedly owned by a
former PKK member.

The
Counter-Terrorism Coordination Board established under the Undersecretariat of
Public Order and Security was convened twice. An Intelligence Assessment Centre
was set up in March 2012 to strengthen intelligence sharing and cooperation
between civilian and military security institutions.

Progress was
made regarding external audits of security institutions under the Turkish Court
of Accounts Law, which provides for ex post auditing of military expenditure. A regulation adopted in August made publication of the TCA external
audit reports related to security, defence and intelligence institutions
subject to parliamentary approval. The regulation also introduces limitations
for the publication of these reports on grounds of confidentiality. The Parliamentary Petition Commission requested a special
commission of experts to inspect and audit the Turkish Armed Forces Assistance
Centre. The General Staff periodically published figures on staffing in the
armed forces.

In the ‘Sledgehammer’
trial, 323 retired and active duty military personnel, including three former
army commanders, were found guilty by a first instance court of attempting to
remove or prevent the functioning of the government through force and violence.
Judicial investigations into the 1980 coup and the 28 February ‘Postmodern Coup’
of 1997 were initiated. Eight political parties, including the AKP, CHP and
MHP, as well as the Council of Ministers, many non-governmental organisations
and nearly 340 individuals requested to become co-plaintiffs in the 1980 coup
case.

However, the
transparency and accountability of the security sector remained limited. The
defence budget was disclosed to the public in a highly aggregated manner with
significant off-budget military expenditure not detailed.

In August 2012,
the Supreme Military Council decided that 40 officers currently under arrest as
part of on-going investigations should retire.

The 2012
amendments to the Law on the National Intelligence Organisation introduced a
requirement that the Prime Minister authorise investigations involving members
of the intelligence services and public officials to whom the Prime Minister
has assigned ‘special tasks’. This provides arbitrary immunity for certain
public officials, is open to inconsistent interpretation and excludes legal
review.

The Law on
Provincial Administrations, used as the legal basis for military operations,
was not amended to give civilian authorities broader oversight of military
operations. Civilian oversight of the Gendarmerie’s law enforcement activities,
in particular, was insufficient. An Independent Law Enforcement Complaints
Agency has yet to be set up to investigate complaints of human rights abuses,
ill-treatment and wrongdoing by and in Turkish law-enforcement agencies.

The duality between the civilian and
military court systems continued. Military judges and prosecutors’ independence
was limited by the continued authority of military commanders over them. The
legal provisions on the composition and powers of the Supreme Military Council
need to be reformed, particularly the legal basis for promotions, to ensure
appropriate civilian control. The Chief of the General Staff continued to report
to the Prime Minister rather than the Minister of Defence. No change was made
to the Internal Service Law for the Turkish armed forces, which defines the
duties of the military and contains an article leaving the military significant
potential scope for intervention in politics.

Overall,
there was further consolidation of civilian oversight of the security forces.
The introduction of parliamentary oversight of the
defence budget was positive, although this, too, is
limited in practice. The
General Staff generally refrained from exerting direct or indirect pressure on
political issues. Several symbolic steps have been taken towards further
democratisation of civil-military relations. Further
reforms, particularly of the military justice system and civilian oversight of
the Gendarmerie, are needed.

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

There was some progress in the area of the
judiciary.

As regards the independence of the
judiciary, the High Council of Judges and Prosecutors established its Strategic
Plan 2012-2016. It also continued to fully carry out its functions, publishing
34 circulars related to the work of judges and prosecutors, and organised
in-service training and meetings with stakeholders, encouraging their participation
in discussions and workshops on the judiciary as a whole.

However, criticisms of the legislation on
the High Council, including of the role given to the Minister of Justice and to
the Under-secretary of the Ministry, have not been addressed. There was also
concern that decisions to suspend prosecutors in the Deniz Feneri case
reflected pressure from the executive.

Yargi Sen, a trade union of judges and
prosecutors was closed in a case launched by the Governorate of Ankara, on the
grounds that the union contravened domestic legislation. European standards
provide that judges should be free to form and join
professional organisations whose objectives are to safeguard their
independence, protect their interests and promote the rule of law.

With regard to impartiality, the
individual application procedure introduced by the 2010 constitutional
amendments and the Law on the Constitutional Court of 2011 entered into force
in September 2012. Anyone who claims that his or her
fundamental rights have been violated can apply to the Constitutional Court if
other domestic remedies have been exhausted.

The Ministry of Justice is drafting, in cooperation with the Council of Europe, a Human
Rights Action Plan, based on the case law of the
European Court of Human Rights and expected to address issues raised in
judgements of the Court where Turkey was found to violate provisions of the
European Convention on Human Rights. The Ministry and the High Council have
also conducted, and plan to continue to deliver, human rights training for
judges and prosecutors.

However, criticisms of existing legislation
on the Constitutional Court have not been addressed. There are still legal
provisions and practical arrangements for courthouses and during trials
regarding judges, prosecutors and the defence which do not guarantee ‘equality
of arms’. In December, members of the Court of Cassation decided to bring a
lawsuit against the leader of the main opposition party for his critical
remarks about the newly elected members of the court being under the control of
the executive. In April, the president of the Constitutional Court stated that
the establishment of a new ‘pro-tutelary’ judiciary should not be allowed.

Judges and prosecutors have failed to apply
international human rights agreements when they conflict with domestic law,
even though the Constitution clearly states that such agreements have
precedence. This failure was criticised by the Presidents of the High Courts.
In response, the High Council established new criteria for assessing judges and
prosecutors which will reward respect for the provisions of the European
Convention on Human Rights and the European Court of Human Rights judgments.

The Regulation on the Judicial Police
adopted in 2005 under Article 167 of the Criminal Procedure Code has not yet
been implemented in accordance with European standards and there are no
judicial police units attached to prosecution offices. Prosecutors rely on
police units working for the Ministry of the Interior and have to develop their
capacity to guide police investigations effectively and keep strict control of
police activity.

Access to Court of Cassation decisions is
limited, which hinders understanding and awareness of case law. Spokespersons
have been appointed at fifteen prosecution offices and courts; however, the
system is in its infancy and has yet to reach the point of providing adequate
information to the public.

With regard to the efficiency of the
judiciary, amendments to the Laws on the Court of Cassation and the Council of
State aiming at tackling their backlog of cases started to generate positive
results, although the backlog is still considerable. The
number of cases before the Court of Cassation was roughly 0.88 million in July
2012, down from 1.12 million in July 2011. As regards the Council of State, the
number of pending cases in June 2011 and June 2012 was approximately the same;
however, the number of finalised cases increased considerably during the same
period. As regards first-instance courts, there were
approximately 1.34 million criminal cases pending at the end of 2011, down from
1.40 million at the end of 2010. Similarly, there were 1.11 million civil cases
pending at the end of 2011, roughly the same as at the end of 2010, while
administrative courts had roughly 170,000 cases pending at the end of 2011, a
decrease of 30,000 as compared to those at the end of 2010.

A third judicial reform package was adopted
in July 2012. It includes amendments to a number of laws and aims amongst
others at accelerating judicial procedures. A Law on Mediation, which should ease the burden on the judiciary, entered into force in June 2012.

The 2012 budget for the judiciary amounted
to approximately € 2.69 billion, roughly 0.44% of Turkey’s GDP. The total
number of judges and prosecutors at the end of 2011 was 9,456[5]. Women constitute approximately 24% of the judiciary and are
underrepresented in prosecutorial and managerial positions. The number of
judges and prosecutors increased to 8.30 per 100,000 people, up from 7.66 in
1997. Judges seconded to the Ministry of Justice have been appointed to the
Council of Europe, the European Court of Human Rights and Turkey’s permanent
representations in Strasbourg and Brussels to represent the Turkish authorities
to these institutions.

However, the Ministry and the High Council
have yet to develop benchmarks to monitor and assess the performance of the courts,
the length of court proceedings and the efficiency and effectiveness of the
judicial system.

The third judicial reform package relates
also to the Turkish criminal justice system. The specially authorised courts
established under (former) Articles 250 – 252 of the Criminal Procedure Code
were abolished; instead, regional serious crimes courts were set up under
Article 10 of the Anti-Terror Law that will hear the same criminal cases. These
courts have specialised judges whose only task is to decide on preventive
measures during the investigation phase.

Under the new legislation it will no longer
be possible for courts to ban publications; put time limits on defendants and
prosecutors in the context of judicial processes; expel the accused or the
defence from any future or all hearings on the grounds of behaviour deemed to
disturb court order and discipline; limit to one the number of defence lawyers
while the suspect’s statement is being taken or during custody; issue
notifications through mass media depending on the urgency of the case. The
upper three-year limit for judicial control was lifted: under former practice,
only those accused for crimes carrying a maximum prison sentence of less than
three years could be put under judicial control rather than prison before or
during trial. New forms of judicial control were introduced.

Article 101 of the Criminal Procedure Code
now clearly provides that (a) a strong suspicion that the offence has been
committed; (b) the existence of grounds for arrest[6]; and (c) the proportionality of
the arrest with a warrant must all be explicitly documented and explained to
the accused. This clarifies the general obligation of judges to reason their
opinion. It is not clear, however, whether these provisions apply also to the
high-profile cases such as Ergenekon, Sledgehammer, Cage, Oda TV etc.,
the bulk of which fall under Article 100 of the Criminal Procedure Code.
Finally, investigations, criminal proceedings and execution of sentences for
offences committed before 31 December 2011 are postponed. This provision
applies to offences carrying a maximum prison sentence of five years and
relates to opinions expressed publicly provided the crime is not repeated in
three years. Overall, these are all steps in the right direction of
guaranteeing procedural rights.

The crimes falling under the scope of the
abolished legislation (former Article 250 of the Criminal Procedure Code), were
broadly investigated and tried without prior permission, irrespective of the
status of the accused as government official, ensuring thus equality before the
law. Under the revised Article 10 of the Anti-terror Law, however, prior
approval of the authorities for government officials is now needed including
for crimes committed in the framework of an organisation to gain illegal
economic advantage; launder money; or produce or traffic drugs.

A number of provisions have remained the
same in the third judicial reform package. This includes the permitted length
of pre-trial detention, which remains ten years, an excessively long period in
particular if pre-trial detention covers only the period up to the first
instance decision. There is conflicting interpretation of the Turkish Court of
Cassation on this issue, i.e. whether the pre-trial detention covers the period
up to the first instance decision or the final one, which needs to be
addressed.

Finally, and more importantly, the third
package fails to sufficiently revise problematic areas related to the
administration of justice and protection of fundamental rights; it does not
address issues related to definitions of criminal offences under either the
Criminal Code or the Anti-terror Law that are at the source of a number of
problems of the Turkish criminal justice system.

In practice, concerns
have been expressed as regards the criminal justice system. Some of these
concerns focused on the defence’s limited access to the prosecution file, which
did not allow allegations against the accused to be challenged effectively.
Other concerns related to decisions to arrest or continue to detain suspects on
grounds which were almost always considered to be inadequate because they only
repeated the wording of the Criminal Procedure Code. Pre-trial detention was
also longer than was strictly necessary in the public interest. Alternatives to
pre-trial detention were not considered. Turkey lacks an effective and
genuinely adversarial domestic remedy that could offer applicants the
opportunity to challenge the lawfulness of their pre-trial detention with
reasonable prospects of success. On many occasions there has been criticism of
the quality of the indictments and of the indictment process. Leaks of
information, evidence and statements continued to raise concerns. In some cases
there were reports that cross-examination in criminal trials was not carried
out properly. Judges and prosecutors have been given no training in
cross-examination. The practical impact of the third judicial reform package,
including on pre-trial detention, needs to be further assessed.

The regional courts of appeal which, by
law, should have been in operation by June 2007 have not been established yet.

Revision of the Justice Ministry’s 2009
Judicial Reform Strategy, whose objectives were achieved to a large extent,
continues, with the participation of all stakeholders, the Turkish legal
community and civil society.

Overall,
some progress has been made in the area of the judiciary. Legislation has been
amended to improve the efficiency of the judiciary and address the increasing
backlog of the courts. The third judicial reform package, adopted in July,
while failing to sufficiently address problematic areas in the administration
of the Turkish criminal justice system, constitutes a step in the right
direction. The 2009 Judicial
Reform Strategy is being revised. However, further efforts are needed with
regard to the independence, impartiality and efficiency of the judiciary,
including the criminal justice system and the large backlog of serious criminal
cases. The participation rate of women in the judiciary needs to be improved.

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

In line with
the National Anti-Corruption Strategy, the Executive Committee for Increasing
Transparency and Fighting Corruption continued to work on proposals to revise
anti-corruption rules. This contributed to changes in the area of incrimination
and the financing of presidential candidates. However, further legislative
changes are needed to complete the technical work of the Executive Committee.
The role of civil society also needs to be strengthened.

The third judicial reform package, adopted
in June 2012, includes amendments to provisions on corruption in the Criminal
Code, redefining and extending the scope of bribery as an offence, in line with
certain recommendations of the Group of States against Corruption (GRECO) on ‘Incrimination’.
However, other recommendations of the Third Round Evaluation Report on ‘Incrimination’
and ‘Transparency of Party Funding’ have been implemented only partially or not
at all. There has been no progress in limiting the immunity of Members of
Parliament (MPs) and senior public officials in corruption-related cases, nor
in establishing objective criteria for lifting their immunity.

There has been some progress on political
financing. The 2011 amendment to the law on the Constitutional Court, which
authorised the Court of Accounts to audit technical aspects of political
parties’ finances and to send its audit reports to the Constitutional Court for
final decision, reinforced auditing capacity with regard to political party
financing. The two biggest parties represented in Parliament published their
finances, declaring their income and expenditure in detail.

The Law on
Presidential Elections adopted in January 2012 introduced strict rules on
transparency of financing for presidential candidates during elections. It also
covers prohibited funding sources, donation ceilings, and candidates’
obligations to disclose their assets and to submit specified financial
information during the campaign period to the Supreme Election Board for
examination within specified timeframes.

However, remaining legal loopholes relating
to political financing continued to be a concern. The auditing of political
parties remained weak and there was no legal framework for auditing election
campaigns or the financing of individual candidates. There was no legislation
on campaign financing other than for political parties. Political party
candidates, independent candidates for election and elected representatives
were not subject to the regulations on financial transparency that apply to
political parties. There were not enough checks on assets declared by political
figures and public officials.

3707 civil servants working for central and
local government received training on ethics between October 2011 and May 2012.
However, no progress was made on extending codes of ethics to academics,
military personnel or the judiciary.

A track record of investigation, indictment
and conviction in corruption cases has not yet been established.

In April 2012,
the Ankara Serious Crimes Court accepted an indictment against 20 suspects in a
fraud case concerning the Deniz Feneri charity on charges of forgery, abuse of
authority and the participation of a public servant in forgery. There was no
charge of major organised criminal activity. The prosecutors removed from the
investigation in August 2011 were put on trial, accused of forgery of official
documents and misuse of authority. This raised concerns about judicial independence.

A corruption investigation involving 130
officials of the İzmir Metropolitan Municipality was started. In January 2012,
the İzmir Specially Authorised Chief Public Prosecutor demanded a sentence of
397 years in prison for İzmir’s mayor on 33 charges, including rigging state
tenders, abuse of office, bribery, forgery, and embezzlement. The indictment
also accused the mayor of forming and leading a criminal organisation, covering
up crimes and protecting criminals. Several other corruption cases against
municipalities are ongoing.

Overall, limited progress was made on fighting corruption, with some
developments on incrimination and transparency in the financing of political
parties. Effective implementation of the National Anti-Corruption Strategy requires
greater political engagement and broader civil society participation. Political
financing needs to be more transparent. The broad scope of parliamentary
immunity remains a shortcoming in this area. A track record of investigation,
indictment and conviction in corruption cases has not yet been established.
There are concerns about impartiality in the processing of anti-corruption
cases.

2.2.
Human rights and the protection of minorities (See also Chapter 23 – Judiciary and
fundamental rights)

Observance of international human rights law

With regard to international human
rights instruments Turkey ratified the Council of Europe’s Convention on
preventing and combating violence against women and domestic violence on 14
March 2012. Three additional Protocols to the European Convention on Human
Rights have not yet been ratified[7].

During the reporting period, the European
Court of Human Rights (ECtHR) delivered judgments on 160 applications
finding that Turkey had violated rights guaranteed by the ECHR. The number of
new applications to the ECtHR went up for the sixth consecutive year, with
8.010 new applications having been made since September 2011. Most concern the
right to a fair trial and protection of property rights. In September 2012,
16.641 applications regarding Turkey were pending. Turkey has abided by the
majority of rulings, but has not executed all the judgments. Based on the Kaplan v. Turkey ruling, a draft law
setting up a commission on long trials has been submitted to the parliament.
The draft law aims to provide a domestic remedy for cases in which the right to
be tried within a reasonable time is breached. In some
cases, rulings have been awaiting follow-up by Turkey for several years. The EU has called on Turkey to enhance its efforts to implement all
the judgements of the ECtHR.

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 Xenides-Arestis v. Turkey,
Demades v. Turkey, and Varnava and others v. Turkey, 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 in the Demopoulos v. Turkey case,
3275 applications from Greek Cypriot owners have been lodged with the Immovable
Property Commission (IPC), 1776 of them during the reporting period. So far,
around 270 cases have been concluded, mainly with friendly settlements and the
IPC paid GBP 81,292,225 in compensation (€ 101,706,400).

Regarding promotion and enforcement of
human rights, the training of public officials, judges, public prosecutors
and police officers continued. The Department of Human Rights in the Ministry
of Justice launched a website that provides translations of relevant judgments
of the ECtHR.

In line with its
amended mandate the parliament’s Human Rights Inquiry Committee can now take the lead on certain draft laws, proposals and bylaws
submitted to the parliament, such as the law on the National Human Rights
Institution. Following this amendment to its mandate, 23 legislative proposals
were referred to the Committee.

The Committee received nearly 4000
petitions in the reporting period, most of which concerned allegations of
unfair trial or ill-treatment. It adopted ten reports.

Legislation on
an Ombudsman Institution has been adopted (See Public administration).
Independent monitoring bodies have not yet been set up in line with the
Optional Protocol to the Convention Against Torture. Legislation establishing
an anti-discrimination and equality board has not been adopted.

Parliament
adopted a law setting up the Turkish National Human Rights Institution in June.
The law does not fully comply with the UN Paris principles, in particular as
regards the independence of the proposed body. Moreover, the text was not
discussed with stakeholders, nor does it sufficiently reflect the concerns and
proposals of national and international experts.

The number of high-profile cases,
individual criminal proceedings and investigations launched against human
rights defenders went up, mostly under terrorism-related
legislation. Serious concerns remain as regards the broad definition of
terrorism under the Anti-Terror Law. (See Situation in the east and
south-east and Freedom of expression)

Overall,
some progress was made on the observance of international human rights law,
notably through the efforts of the Ministry of Justice and the parliamentary
Human Rights Inquiry Committee. However, important reforms are needed to
strengthen human rights structures and the number of criminal proceedings
brought against human rights defenders is a matter of concern.

Civil and political rights

The government
pursued its efforts to ensure compliance with legal safeguards for the prevention
of torture and ill-treatment. The downward trend in the
incidence and severity of ill-treatment by law enforcement officials continued.
Forensic doctors’ reports or reports by universities or independent
institutions are now recognised as proof by some courts, in addition to the
reports of the Forensic Medicine Council under the Ministry of Justice.

However,
excessive use of force during arrest and outside official detention places, as
well as in official places of detention and prisons, continues to be a matter
of concern. There have been several reports of disproportionate use of force by
law enforcement bodies, including fatal shootings.

Turkey has
ratified the Optional Protocol to the Convention Against Torture, but has not
established a National Preventive Mechanism (NPM) in line with the requirements
of the Optional Protocol.

Treatment of migrant detainees in detention
centres needs to be further improved.

Regarding the fight
against impunity, the Council of State confirmed a court order to the
Ministry of the Interior to pay reparations to 16 youths detained in Manisa
Province on 26 December 1995 and tortured in the Manisa Security Directorate.

In general,
efforts to fight impunity for human rights violations have been insufficient.
Prompt, thorough, independent and effective investigation of allegations of
torture committed by security and law enforcement officers is often lacking.
Moreover, there is no exception from the statute of limitations for torture
cases.

Several trials
are ongoing concerning allegations of ill-treatment of conscientious objectors
in military prisons. The parliamentary Human Rights Inquiry Committee
criticised practices in military prisons and stated that the punishment of
soldiers should be decided by an independent judicial authority and not by a
senior military officer. An ECtHR judgement on this issue remains to be
executed.

Law enforcement
bodies regularly launched counter-cases against people who alleged torture or
ill-treatment. In many instances such cases were given priority by the courts.
The absence of prompt, thorough, independent and effective investigations by
courts leads to extended trials. Law enforcement officers found guilty of torture,
ill-treatment or fatal shootings continued to receive short or suspended
sentences.

Politicians
from all parties criticized the appointment of a police chief, who had faced
charges of torture and rape in the past, to a key position in the anti-terror
department in Istanbul. The public debate on this was extensive.

The lack of a
judicial police force leads to administrative investigations into allegations
of torture or ill-treatment being carried out by fellow police officers,
putting at risk the impartiality of the investigation.

There is no
comprehensive approach to missing persons, the exhumation of mass graves or
thorough and independent investigations into alleged cases of extrajudicial
killings by security and law enforcement officers. Mass graves discovered in
the south-east have not been adequately investigated.

Overall, there has been a downward trend in torture and ill-treatment in
places of detention; however, allegations of excessive use of force continue to
be a matter of concern, and there has been little progress on tackling
impunity. There is a significant backlog of judicial proceedings, with priority
given in several well-documented cases to counter-allegations lodged by the
security forces.

Reform of the prison
system continued. The case management model developed by the
Ministry of Justice to improve rehabilitation services is in operation in five
rehabilitation centres for convicts and detainees. The Ministry of Justice
started an investigation into allegations of ill-treatment in the Adana Pozantı
juveniles’ prison. Implementation of the tripartite protocol between the
Ministries of Health, Justice and the Interior began in November 2011, to
prevent law enforcement officers being present at medical examinations of
prisoners. Its implementation needs to be monitored closely to ensure that it
is in line with European standards.

The number of judgments including probation
sentences increased, and an amendment of the Law on Conditional Release
resulted in a significant number of prisoners being released.

Prison overcrowding remained a serious
concern, with 41% of the prison population awaiting final sentencing. The
prison system does not have adequate resources. Ill-treatment allegations
continue to cause concern, including the tape-recording of prisoners, excessive
use of solitary confinement, and excessive strip searches of inmates and
visitors.

The number and
quality of juvenile correctional facilities remains insufficient. Following the
allegations of ill-treatment in Adana Pozantı juveniles’ prison, minors were
transferred to a facility in Ankara far from their families. Children,
especially girls, are not held separately from adults in all prisons.

The standards for monitoring national
prisons are not in line with those of the UN. Prison monitoring boards are not
effective and various prisons have no dedicated boards. The boards have neither
the right nor the resources to monitor prisons effectively. Some provincial
boards carried out random visits, but their reports have not led to changes in
practice.

A general statement of principles on
prisoners’ rights, incorporating the principles of the European Convention of
Human Rights, is lacking. Excessive restrictions continued regarding the
availability of newspapers, magazines and books in prisons. The practice
adopted in relation to open and closed visits is of concern. Reports of
restrictions on the use of the Kurdish language during visits and exchanges of
letters persist. 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 Optional Protocol to the Convention Against Torture.

Many sick and terminally ill convicts lack
proper medical treatment. Complaints that conditions in F-type high-security
prisons cause physiological and psychological damage have been reported.

Overall, prison overcrowding remains problematic, with a serious impact on
sanitation and other physical conditions. A reform of the complaints system in
prisons is needed.

There has been limited improvement in access
to justice. A Ministry of Justice webpage provides information on legal
matters and brochures provide information on the procedures to follow. Bar
associations and other civil society organisations also contributed to citizens’
awareness of their rights in terms of access to justice.

However, there is no overall strategy for
legal aid. The financial resources allocated are not sufficient and the low
fees for legal aid lawyers are not comparable with fees paid by defendants in
ordinary cases. This can lead to a decrease in the quality of the services
provided. Due to the low fees and the lack of effective monitoring, lawyers
appointed by the bar associations do not always provide an effective defence
for the accused. The current system gives rise to concerns and needs to be
revised.

Public awareness of legal aid is limited in
rural areas and among disadvantaged groups. Legal aid is not accessible for a
large proportion of prison inmates, women and juveniles. Lack of effective
protection still prevents victims of domestic violence from obtaining justice.
Misguidedly, defendants continue to believe that requesting a lawyer implies
guilt.

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

As regards freedom of expression, a
number of journalists were released pending trial after excessively long
periods spent in pre-trial detention. The third judicial reform package
prohibits the seizure of written work before publication. It also eases
restrictions on media reporting of criminal investigations. There continues to
be room for debating some topics perceived as sensitive, such as the Armenian
issue or the role of the military, and opposition views are regularly
expressed.

However, these reforms fall short of a
significant improvement regarding freedom of expression. The increasing
incidence of violations of freedom of expression raise serious concerns, and
freedom of the media continued to be further restricted in practice. The
increasing tendency to imprison journalists, media workers and distributers
fuelled these concerns.[8]
The European Court of Human Rights received a large number of applications
concerning violations of freedom of expression by Turkey.

A large number of cases were brought
against writers, academics and journalists writing and working on the Kurdish
issue, but also scholars and researchers. Several left-wing and Kurdish
journalists were arrested on charges of engaging in propaganda for terrorism,
others remained in prison. (See Situation in the east and south-east)
More than 2.800 students are in detention, mostly for terrorism related
charges. The legal framework on organised crime and terrorism is still
imprecise and contains definitions which are open to abuse, leading to numerous
indictments and convictions. Moreover, its interpretation by prosecutors and courts
is uneven and is not in line with the European Convention on Human Rights or
the case-law of the European Court of Human Rights. Turkey needs to amend its
penal code and anti-terror legislation to make a clear distinction between the
incitement to violence and the expression of nonviolent ideas.

The application of Articles 6 and 7 of the
Anti-Terror Law in combination with Articles 220 and 314 of the Turkish
Criminal Code leads to abuses; in short, writing an article or making a speech
can still lead to a court case and a long prison sentence for membership or
leadership of a terrorist organisation.

High-level
government and state officials and the military repeatedly turn publicly
against the press and launch court cases. On a number of occasions journalists
have been fired after signing articles openly critical of the government.

All of this,
combined with a high concentration of the media in industrial conglomerates
with interests going far beyond the free circulation of information and ideas,
has a chilling effect and limits freedom of expression in practice, while
making self-censorship a common phenomenon in the Turkish media.

Though very few
cases have been initiated on the basis of Article 301 of the Turkish Criminal
Code, implementation of two ECtHR judgments on Article 301 are pending.

Website bans of disproportionate scope and
duration continued. Since May 2009 the Telecommunications Communication
Presidency (TİB) has published no statistics on banned sites. Court cases are
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. An Information
Technologies and Communication Board (ICTA) decision introducing optional
internet filters entered into force. It is essential that it is implemented in
line with European standards with regard to the right to receive and impart
information and ideas without interference by public authorities.

The Supreme Board of Radio and Television
(RTÜK) issued warnings to television stations and imposed fines on them, in
particular for representing superstitious beliefs, denigrating morals and
national values and the protection of the family, representing obscenity and
praising terrorism.

Overall, the
increase in violations of freedom of expression raises serious concerns, and
freedom of the media was further restricted in practice. The legal framework,
especially as regards organised crime and terrorism, and its interpretation by
the courts, leads to abuses. Together with pressure on the press by state
officials and the firing of critical journalists, this situation has led to
widespread self-censorship. Frequent website bans are a cause for serious
concern and there is a need to revise the law on the internet.

As regards freedom
of assembly, 1 May demonstrations took place in a peaceful
atmosphere throughout the country. Several activities including the ‘Armenian
Genocide Commemoration Day’ organised by several civil society groups and
intellectuals to commemorate the 1915 events also proceeded peacefully.

However, in
general there was a shortfall in the implementation of the constitutional right
to hold demonstrations and meetings. Excessive
administrative restrictions on freedom of assembly persist, such as substantial
prior notification requirements for demonstrations, and sometimes the
confinement of demonstrations to designated sites and dates that are unsuitable. The Newroz (New Year) ceremonies in the South East were restricted
to only one day. On several occasions there were scenes of violence, disruption of demonstrations and disproportionate use of force by security forces against
demonstrators — especially in rallies related to the
Kurdish issue, students’ rights, the environment, activities of the Higher
Education Board (YÖK) and trade union rights. Two students were sentenced to
eight years in prison for displaying a banner protesting against tuition fees
during a rally attended by the Prime Minister.

In some provinces, press statements by
non-governmental organisations and human rights defenders were subject to fines
for violating Law No 2911 on demonstrations. Others were fined repeatedly for
disobeying orders under the Law on Misdemeanours.

Allegations
that members of the security forces have used excessive force have not always
been prosecuted or investigated thoroughly. (See section on impunity)
Many court cases were launched against human rights defenders and civil society
representatives who exercised their right to peaceful assembly. Human rights
defenders also faced prosecution and legal proceedings on charges of terrorist
propaganda during demonstrations and protest meetings and following their
attendance at press conferences.

Freedom of
association legislation is broadly in line with EU
standards. However, the need to change the legal framework with regard to
political parties and trade unions was not met. There were examples of
restrictive interpretation of legislation vis-à-vis associations and harassment
of their leaders[9]. Freedom of association for trade unions is compromised in practice
by police raids, as happened in June with the arrests of more than 70 trade
union activists, including the President of KESK, a civil service
confederation.

Civil society
organisations (CSOs) continued to face fines, closure
proceedings, and administrative obstacles to their operation. A decree adopted
in November 2011 giving additional authority to the Ministry of Health and
creating a Board of Health Professions was criticised by the Turkish Medical Association
and the World Medical Association for reducing professional autonomy. Two
foreign civil society organisations were refused the right to establish in
Turkey.

The trade union
for civilian staff working for the military, SIME-SEN, is facing a court action
to close it down, as civil servants employed in the Ministry of Defence and
Turkish Armed Forces are not allowed to create or join trade unions.

Legislative and bureaucratic obstacles
impeding the financial sustainability of CSOs persisted. The collection of
domestic and international funds was difficult and bureaucratic procedures
cumbersome. There are numerous complaints of discrimination when applying for
public benefit status for associations and in getting permission to raise
funds.

Overall, regarding
freedom of assembly and association, the picture was mixed. Where
demonstrations were not authorised there were cases of violence and
disproportionate use of force by the security forces, especially but not only
in relation to the Kurdish issue. The constitutional right to freedom of
assembly and association appears to be interpreted at times in an overly
restrictive manner. There is a need to revise the law on demonstrations and
meetings, to investigate allegations against members of the security forces for
use of excessive force and to prosecute where appropriate. Fundraising rules
remains restrictive and discretionary. There were no developments regarding
legislation on 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 third time after almost nine decades, the Divine
Liturgy of the Dormition of Theotokos at the Sumela Monastery in the Black Sea
province of Trabzon. In September the third religious service since 1915 was
held at the Armenian Holy Cross Church on the Akhdamar island in lake Van. A number of crypto-Armenians have started to use their original
names and religion. Police protection has been provided to a number of church
leaders and several churches receive police protection during services. According
to the Turkish authorities the Ecumenical Patriarch is free to use the title ‘Ecumenical’.
However, the Patriarchate has received no indication from the authorities to
this effect and still uses the title ‘Fener Rum Patrikhanesi’ in its letterhead
in Turkish.

As regards conscientious objection, some progress was made on addressing repeated
prosecution and conviction, and towards introducing a civilian alternative to
military service under certain circumstances. Military courts started to issue
rulings in line with judgments of the European Court of Human Rights.

A court of first instance in Ankara
rejected a request to ban an association which helped build cem houses,
Alevi places of worship. However, this decision was reversed in June by the
Court of Cassation. The case has been brought to justice by the Ministry of the
Interior. New religious education textbooks containing information on the Alevi
faith have been prepared by the Ministry of National Education for the academic
year 2012-2013.

Implementation
of the August 2011 decree law and the October Regulation amending the February
2008 Law on Foundations continued. (See section on property rights).

However, the 2007 Zengin v. Turkey
ECtHR judgment on religious culture and ethics classes, which remain compulsory
in primary and secondary schools, has yet to be implemented. Children who did
not attend were subject, in several instances, to discrimination. No
alternatives were provided for students exempted from these classes.

Non-Muslim
communities — as organised structures of religious groups — continued to face
problems due to their lack of legal personality, with adverse effects on
property rights, access to justice, the ability to obtain work, residence
permits for foreign clergy and fundraising. The relevant 2010 Council of Europe
Venice Commission recommendations have yet to be implemented.

Restrictions on
the training of clergy remain. Neither the Turkish legislation nor the public
education system provide for private higher religious education for individual
communities. Despite announcements by the authorities, the Halki (Heybeliada)
Greek Orthodox seminary remained closed. The Armenian Patriarchate’s proposal
to open a university department for the Armenian language and clergy remained
pending for a fifth year. The Syriac Orthodox community can provide only
informal training outside any officially established schools.

As regards
participation in religious elections, in contradiction with European standards
Turkish and foreign nationals are not treated equally in terms of their ability
to exercise their right to freedom of religion by participating in the life of
organised religious communities.

Personal
documents such as identity cards include information on religion, leading to
some discriminatory practices or harassment by local officials of persons who
converted from Islam to another religion and thereafter sought to amend their
ID cards. The 2010 ECtHR ruling that indication of religious affiliation on
identity cards is in breach of the Convention has yet to be implemented.

Concrete follow-up of the opening made in
2009 to the Alevis is lacking. Cem houses were not officially recognised
and Alevis experienced difficulties in establishing new places of worship.
Alevis were concerned by the marking of many houses of Alevi citizens in a
number of provinces and by incidents against them. Complaints were submitted to
the prosecutors’ offices by Alevi associations; judicial and administrative
investigations are continuing. A demand to open a cem house in the
parliament was rejected on the grounds that Alevi MPs could go to the mosque.
Several commemoration ceremonies by Alevis were prevented by police, some
through the use of force as was a demonstration against the closure of the
Madimak court case. Some Alevis encountered job discrimination in the civil
service.

Non-Muslim
religious communities reported frequent discrimination, administrative uncertainty
and numerous obstacles to establishing or continuing to use their places of
worship. Implementation of zoning legislation by local authorities was
inconsistent, resulting in arbitrary refusals to issue construction and
renovation permits for places of worship. In November,
the DG for Foundations declared the Hagia Sophia Museum in Iznik a mosque.

Especially in south-eastern provinces,
renewal of foreign clergy permits was denied, without adequate explanation and
in an inconsistent manner. Clear criteria for refusals to renew residence
and/or work permits need to be established.

Alevis and
non-Muslim religious communities have to pay electricity and water bills,
whereas the State budget covers such expenses for mosques.

Non-Muslim
religious communities reported several instances of hate crimes. Anti-Semitism
and hate speech in the media, including in TV series and films, has not been
punished. There is a culture of intolerance of minorities. The court case
concerning the killing of three Protestants in Malatya in April 2007 continued;
allegations of links to the Ergenekon organisation are being reviewed by
the court following arrests in 2011. No clear conclusion has been reached yet
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 case is
continuing.

Missionaries are widely perceived as a
threat to the integrity of the country and to the Muslim religion. A classified
report by the MIT (National Intelligence Organisation) on missionary activities
in east and south-east Anatolia focusing on citizens of Kurdish origin, using
discriminatory language against Christian churches and missionaries, was
revealed in the media in November. A Diyanet five-year strategy plan also aims
to follow and evaluate missionary activities inside and outside the country.

Implementation of the May 2010 prime
ministerial circular instructing all relevant authorities to pay due attention
to the problems of non-Muslim Turkish citizens was not always consistent.

ECtHR judgments on Turkey regarding conscientious
objectors refusing to serve in the military on religious or other grounds
have yet to be implemented. Turkey
is the only country of the Council of Europe that does not recognise the right
to conscientious objection for conscripts.

Overall, there was limited progress on freedom of thought, conscience and
religion. There has been some progress on conscientious objection in terms of
application of the case law of the European Court of Human Rights. Dialogue
with the non-Muslim religious communities continued. However, people professing
faith in minority religions or indeed no faith continued to be discriminated
against, and were subject to threats from extremists. A legal framework in line
with the ECHR has yet to be established to ensure 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)

Steps have been taken to improve
legislation regarding respect for women’s rights and gender equality.
The Law on the Protection of Family and Prevention of Violence against
Women adopted in March aims to protect family members and those in
relationships outside marriage from violence. The procedures for urgent cases
are generally positive, as was the inclusive consultation exercise undertaken
by the authorities with civil society. A National Action Plan to combat
Violence against Women (2012-2015) was adopted by the Ministry for Family and
Social Policies. The plan focuses on five areas: legislation, awareness raising
and change of attitudes, empowerment of women and preventive services, health
care and cooperation among stakeholders.

The Ministry of Family and Social Policies
and the Gendarmerie signed a protocol providing for Gendarmerie staff to be
trained in the prevention of violence against women and gender equality issues
with a view to supporting victims of violence. The Capital Markets Board issued
a statement stipulating that at least one board member of publicly traded
companies should be female. The Ministry of Family and Social
Policies signed a protocol with the Ministry of Labour and Social Security
aimed at increasing female employment and labour participation rates, including
those of women subject to violence.

The Parliamentary Committee on Equal
Opportunities between Men and Women has issued 20 opinions on draft legislation
since being set up.

However, there is still room for the
Committee to be more involved in mainstreaming gender equality via the
legislative process, in monitoring the implementation of laws and circulars
issued on gender equality and in engaging with women’s organisations. Gender
equality, combating violence against women, including honour killings, and
early and forced marriages remain major challenges for Turkey.

Certain last-minute amendments to the Law
on the Protection of Family and Prevention of Violence against Women raised
concern. Also, substantial efforts are needed to turn this new law, and earlier
legislation, into political, social and economic reality. A law on caesarean
sections was adopted with insufficient preparation and consultation with civil
society, and in particular without hearing the views of women’s organisations.
In the debate that preceded this law and a similar debate on abortion,
government statements neglected the overall need for increased respect for
women’s rights in practical terms.

Women’s participation in the labour market
remains low overall, although it has increased slightly. Women are
mostly employed as unpaid family workers with no social protection apart from
that afforded by other family members. Provision of childcare facilities for
working women remained an issue; work on a regulation on parental leave did not
proceed. Efforts to increase labour market flexibility do not take into account
the need to avoid gender-based labour market segmentation.

The number of women in politics and at
senior level in the administration remained very small. Women were
underrepresented in the management of trade unions. Several female trade union
activists were detained and arrested prior to international women’s day.

The government did not respond to demands
by the women’s movement to revise the Law on Political Parties and the Law on
Elections so as to make the inclusion of women legally binding on political
parties.

Women’s negative portrayal in the media and
a male-dominated discourse continued to be a concern.

Detailed statistics on incidents of
violence against women, including murder, are not available. Certain court
judgments in cases of violence against women raised concern: the rulings
attempted to justify violence inflicted on women and sometimes on juveniles
with reference to the victim’s family background and attitude.

In some cases, police officers tried to
convince domestic violence victims to return to their alleged abusers rather
than help them pursue their complaints. There were a number of cases in which
the victim of violence sought help in vain from the authorities and ended up
being killed. Awareness-raising and training for members of the judiciary and
law enforcement officers on new legislation is needed. The capacity of family
courts has not increased. As regards domestic violence, the ECtHR judgment in
the Opuz v. Turkey case was not implemented. The issue of early and forced marriages remains a serious concern.

The government needs to proactively promote
changes in stereotypes and in the perception of gender roles in all spheres.
The sustainability of actions, policies and circulars on women’s rights
and gender equality supported through national and international resources is
critical.

Overall,
steps have been taken to improve legislation regarding respect for women’s
rights and gender equality. The Law on the Protection of Family and
Prevention of Violence against Women is an improvement on previous legislation,
protecting family members and those in relationships outside marriage from
violence. The procedures for urgent cases are particularly positive, as was the
inclusive consultation exercise undertaken by the authorities with civil
society, even if NGOs are critical of certain last-minute amendments to the
text. However, substantial efforts are needed to turn this new law, and earlier
legislation, into political, social and economic reality. Legislation needs to
be implemented consistently across the country. There is a need for greater
involvement of and participation by women in employment, policy-making and
politics. The issue of early and forced marriages remains a concern.

With respect to children’s rights,
the ratio of children enrolled in pre-school education reached 44% for the 4-5
years age group, up 1% on the previous reporting period. Efforts to develop a
national model for pre-school education services, with relevant quality
standards, continued. The number of pre-school teachers increased by around
15%.

Primary and secondary school enrolment
rates increased for the 2011-2012 educational year. The net school enrolment
rate for the 6-13 years age group was 99.3%. Secondary school enrolment rates
reached 67.4%, with the difference between enrolment rates for girls and boys
falling to 2.5%. Mobile education services for girls were provided in several
provinces, although coverage was limited. Optional courses are offered to
secondary education students on living languages and dialects spoken in Turkey
as of the academic year 2012-2013. The tendency towards de-institutionalisation
of care services for children continued, with the introduction of a support
scheme for family-based care.

The Ministry of Labour and Social Security
has taken steps to combat child labour, especially in seasonal migrant
agricultural work and hazelnut collection. An evaluation of the impact of such
measures and an updated survey of the situation of child labour is needed.

However, regional disparities in school
enrolment rates persisted, with low enrolment levels in certain provinces in
the east of the country. Drop-out and absenteeism rates continued to be high
among the children of seasonal agricultural migrant families and Roma families.
An effective monitoring and inspection mechanism, covering all types of
pre-school education and care services, has yet to be established.

Efforts to fight violence against children
do not include an effective mechanism for monitoring and prevention.
Awareness-raising efforts on the de-institutionalisation of care services for
children were limited. The conditions and administrative capacity of child care
institutions need to be improved.

There are little quantitative and
qualitative data on child labour. Child labour in seasonal agricultural migrant
families persisted despite efforts to improve the situation. There is a need to
strengthen administrative capacity in this field and put in place an effective
monitoring and inspection system covering the whole of the country.

Despite the June 2010 amendments to the
Anti-Terror Law and other criminal legal provisions, juveniles were arrested in
many instances on charges of membership of a terrorist organisation, facing
heavy penalties. This happened in particular when juveniles resisted law
enforcement officials or participated in demonstrations. Ill-treatment during
questioning and admission to prisons was reported.

At the end of the reporting period, the
total number of serious crimes courts for juveniles was 19, of which nine were
operational. The total number of juvenile courts was 86, of which 67 were
operational, despite the requirement of the Child Protection Law that courts
should be established in all 81 provinces. In provinces where such courts do
not exist, children were tried in serious crimes courts for adults.

As of end-July, 1,830 children aged between
12 and 18 were in prison. Of these, 190 were convicted whereas the rest were
detained pending, or during trial. There were serious allegations of
ill-treatment and sexual assault in Pozanti juvenile prison in Adana, which led
to the move of all detainees to Ankara Sincan prison.

Overall,
efforts are needed in all areas, including education, combating child labour,
health, administrative capacity and coordination. In general, more preventive
and rehabilitative measures need to be taken for juveniles.
Children are not held in appropriate conditions and
additional juvenile courts need to be created in line with current legislation.

Regarding the socially vulnerable and/or
persons with disabilities, implementation of the Strategy Paper on
Accessibility and the National Action Plan remained limited. A national
monitoring mechanism in line with the UN Convention on the Rights of Disabled
Persons and the corresponding optional protocol is still not in place. The
principle of positive discrimination for the disabled is not properly reflected
in concrete policy measures.

Home-based care services for the disabled
and the elderly were expanded. A protocol was signed to promote
entrepreneurship for people with disabilities. Efforts to increase employment
in the public sector continued. However, the employability of people with disabilities
in both the public and private sectors needs to be further promoted together
with alternative employment methods and incentives for employers, and their
access to finance needs to be increased.

Official and reliable data and research on
persons with disabilities and mentally ill persons is lacking, which impedes
informed policy-making. Difficulties in access to education, health, social and
public services continued. Physical barriers to access to public buildings and
all relevant facilities still exist. There is no comprehensive investment
strategy to overcome this problem. Deadlines for mandatory compliance for
public institutions to provide accessible services have been extended and
postponed. Inclusive education practices need to increase in coverage and
quality, in line with legislation. Private special education and rehabilitation
centres have an important role in the current system, but there are
deficiencies in the inspection, monitoring and evaluation system, raising
doubts as to the centres’ effectiveness. In almost all centres, many children
are enrolled (in order to receive government support), but do not actually
attend the course. Inspections lack depth and do not cover the content of the
services provided. Public awareness needs to be increased to fight prejudice
against people with disabilities.

There is still no independent body to
monitor and inspect mental health institutions.

Overall,
services were expanded for the disabled and the elderly, but important efforts
are still needed to protect socially vulnerable persons and persons with
disabilities.

Comprehensive anti-discrimination
legislation, including on the establishment of an anti-discrimination and
equality board, is still lacking. A draft law is before the parliament. The relevant
parliamentary committee amended the draft to remove references to
discrimination on grounds of sexual identity or sexual orientation. The current
legal framework is not in line with the EU acquis. There is
discrimination against individuals along ethnic, religious, sexual identity and
other lines.

Homosexuality
is not a criminal offence in Turkey. However lesbian, gay, bisexual and
transgender (LGBT) persons continued to suffer discrimination, intimidation and
were the victims of violent crime. LGBT employees and civil servants have been
fired on the grounds of sexual orientation. Other
reported spheres of discrimination against LGBT individuals include access to
housing and to health services (especially in the case of transgender persons). A number of court cases and judicial proceedings are in progress.

Violations of the right to life, torture,
ill-treatment and cases of sexual assault that occurred against LGBTs in Turkey
during 2011 have been reported. Shortcomings in the investigation and prosecution
of crimes against people with a different sexual orientation or gender identity
led to impunity for the perpetrators.

Articles of the
Turkish Criminal Code on ‘public exhibitionism’ and ‘offences against public
morality’ and also articles of the Law on Misdemeanours were widely used to
discriminate against and to impose fines on LGBT people. The repeated
application of the principle of ‘unjust provocation’ in favour of perpetrators
of crimes against transsexuals and transvestites is a major concern. Court
cases have been brought against LGBT human rights defenders who accused the
police of arbitrary arrests and violence.

High-profile public figures repeatedly used
negative stereotyping against LGBT persons. The internal rules of the Turkish
armed forces continue to define homosexuality as a ‘psychosexual’ illness and
to declare homosexuals unfit for military service.

Substantial government efforts are still
needed to effectively protect vulnerable groups, including women, children, and
lesbian, gay, bisexual and transgender individuals from societal abuse,
discrimination and violence.

As regards labour and trade unions
rights, legislation on trade unions and collective bargaining by civil
servants was amended, leading to the first collective bargaining exercise in
this sector. However, the new legislation is not fully in line with the EU acquis
and International Labour Organisation conventions, especially with regard to
the right to strike for public servants, the process of collective bargaining
and dispute settlement, as well as restrictions on large categories of public
servants to form and join trade unions. The draft law on collective labour
relations, amending the legal framework for trade unions in the private sector,
has not been adopted. In May the Law on Strikes was
amended to prohibit strikes in the aviation sector. This takes Turkey’s labour
legislation further from EU and ILO standards.

The limited labour rights granted by
existing legislation have not always been available to employees, with several
cases of dismissal apparently linked to union membership. There was continued
state interference in unions’ internal affairs. Industrial action and
demonstrations by trade unions were regularly restricted and on occasion broken
up by the security services using force. Many unions and union activists faced
police raids, criminal charges and imprisonment on allegations of ‘terrorist
activity’.

Overall,
there was limited progress in the areas of labour and trade union rights. The
legislation on civil servants’ trade unions rights has been amended but is
still not in line with EU and ILO standards. Collective actions by trade unions
suffer numerous restrictions.

As regards property rights, the implementing regulation for the decree law
revising the provisional Article 11 of the Foundations Law was published in
October 2011[10]. The regulation
sets out the conditions for applications for properties to be registered and
the conditions for payment of compensation. The deadline for applications to
register property in the name of the community foundation together with all
rights and obligations was 27 August 2012. According to official information,
108 community foundations applied by the deadline for the return of 1,568
properties. By 18 September 2012, the Foundations Council approved the return
of 58 properties, the payment of compensation for eight (8) properties, decided
that 53 applications were not eligible and continues the processing of the
remaining 1,449 applications.

The Izmir Jewish community, the Greek
primary girls’ school in Istanbul and the Armenian Tibrevank Lycée in Istanbul
were granted foundation status by administrative decisions.

However, the Syriac community continued to
face difficulties with property and land registration, especially in the
south-east. A number of court cases continued, concerning both individuals and
religious institutions. The Mor Gabriel Syriac Orthodox monastery court cases
regarding land ownership continued. The Court of Cassation, in a much
criticised decision, reversed a local court’s decision in favour of the
monastery. A forestry case against the monastery, which had been finalised at
the Court of Cassation, is now before the ECtHR pending a decision on
admissibility. These cases have been brought to justice against the monastery
by State bodies.

A large number
of properties of the Latin Catholic Church remain confiscated by the State. The
Catholic Church, like the other non-Muslim religious communities, has no legal
personality.

There was no
progress in implementing the March 2010 recommendations of the Council of
Europe Venice Commission on the protection of property rights. Council of
Europe Resolution 1625 (2008)
on Gökçeada (Imvros) and Bozcaada (Tenedos) still needs to be implemented.

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

Overall, there has been progress with the adoption of legislation amending
the 2008 Law on Foundations. Implementation continues. However, the legislation
still does not cover fused foundations (i.e. those whose management has been
taken over by the Directorate General for Foundations) or properties
confiscated from Alevi foundations. The ongoing cases against the Mor Gabriel
Syriac Orthodox monastery raise concerns. Turkey needs to ensure full respect
for the property rights of all non-Muslim religious communities and others.

Respect for and protection of minorities, cultural rights

Dialogue between
the government and representatives of minorities continued.

For the first
time, representatives of minorities, beyond those minorities recognised by
Turkey, were invited to parliament – to express their views on a new
Constitution.

The Ministry of National Education approved
a new regulation allowing children from Armenian, Greek and Jewish minorities
who are not Turkish citizens to be educated in minority schools. However, children who are not Turkish citizens do not receive
official graduation papers.

A legislative change enabling newspapers
run by non-Muslim minorities to publish official notices was published in the
Official Gazette on 28 February. Minority newspapers will have to apply in
writing to be able to publish official announcements.

However, Turkey’s
overall approach to minorities remained restrictive. Turkey maintained its
reservations to the UN International Covenant on civil and political rights
regarding the rights of minorities and to the UN Covenant on economic, social
and cultural rights regarding the right to education, which remained a cause
for concern. Turkey has not signed the Framework Convention for the Protection
of National Minorities or the Charter for Regional and Minority Languages.

No mechanisms
or specific body has been established to combat racism, xenophobia,
anti-Semitism and intolerance. There is no legal framework or legislation that
addresses discrimination issues; references in the constitution to the
principle of non-discrimination are often interpreted in a restrictive manner
by the courts.

There is no
effective prosecution of incitement to hatred, including by the media: Turkey
has not made progress to introduce legislation regarding hate speech and hate
crimes as recommended by the Council of Europe.

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 pending.

The five-year
court case on the murder of Armenian journalist Hrant Dink[11] ended on 17 January 2012. One person was convicted for
incitement to murder, but all defendants were acquitted of charges of links to
a terrorist organisation; the family of Hrant Dink demanded a new investigation
into the conduct of various members of the police force and Gendarmerie who
seemed to be implicated in the crime according to an inquiry conducted by the Presidential
State Inspection Board (DDK). Full execution of the ECtHR judgment
of 14 September 2010 on the Dink case is crucial for Turkey in order to
fight impunity and to hold all involved accountable before the law.

The commemoration
of the twentieth anniversary of the Khojaly massacre
(in Azerbaijan) on 26 February in Istanbul’s Taksim square was marred by
racist and anti-Armenian slogans and degenerated into an attempted march on the
Armenian Agos newspaper.

Rhetoric against missionaries or minorities
remains in a number of compulsory schoolbooks.

Several important buildings in the Armenian
cemetery in Malatya were demolished by the Malatya municipality on 2 February.

Overall, dialogue between the government and minorities continued. Representatives
of minorities presented their views on a new constitution to the Parliamentary
Conciliation Committee. However, Turkey’s approach to minorities remained
restrictive. Full respect for and protection of language, culture and
fundamental rights in accordance with European standards have yet to be
achieved. A comprehensive approach and further efforts are needed to enhance
tolerance, security and promote inclusiveness vis-à-vis minorities. There is a
need for revision of existing legislation, the introduction of comprehensive
legislation to combat discrimination and the introduction of protection
mechanisms or specific bodies to combat racism, xenophobia, anti-Semitism and
intolerance. Relevant Covenants and Conventions should be applied.

As regards cultural
rights, debates on mother-tongue education continued. Diverse Kurdish
groups, other linguistic groups and civil society organisations submitted
requests to the Parliamentary Conciliation Committee working on a new
constitution, including requests to lift all restrictions on use of the mother
tongue.

In December the Council of Higher Education
(YOK) approved an application by Tunceli University for the foundation of a
Department of Eastern Languages and Literatures, including Zaza and Kurmanjî
Kurdish. Recruitment of further academic staff is needed to make the department
fully operational.

In June, the Ministry of National Education
issued a new curriculum for primary schools, including the obligation for a
school to add a course on living languages such as Kurdish or Circassian and
dialects if at least 10 pupils apply for it.

Mardin Artuklu University continued
post-graduate education in Zaza and Kurmanjî
Kurdish. The Kurdish Language and Literature Department in Muş Alparslan
University continued its undergraduate elective Kurdish language course. No
postgraduate course was offered due to a lack of teaching staff.

The first Syriac monthly newspaper in
Turkey started publication in March.

The parliament’s Human Rights Inquiry
Committee reported fewer restrictions on the use of Kurdish in prisons during
visits and exchanges of letters. However, some legislation still restricts the
use of languages other than Turkish, including the Constitution and the Law on
Political Parties. In a number of court cases against politicians and human
rights defenders the use of other languages than Turkish was not allowed.

The Council of Europe Congress of Local and
Regional Authorities’ Recommendation 229 (2007) to permit municipal councils to
use languages other than Turkish in the provision of public services when
appropriate and to reform the Municipality Law accordingly has not been
implemented.

Court cases regarding the demolition of the
statue of humanity devoted to Turkish-Armenian reconciliation in Kars have
ended at the administrative courts. The case was declared admissible by the
ECtHR in February.

Overall,
Turkey has made some progress on cultural rights, and fewer restrictions on the
use of Kurdish in prisons during visits and exchanges of letters were reported.
However, some legislation still restricts the use of languages other than
Turkish, including the Constitution and the Law on Political Parties. Also, the judiciary took a number of
restrictive decisions on the use of languages other than Turkish, including the
use of Kurdish in court cases concerning Kurdish politicians and human rights
defenders.

Some progress was made regarding Roma. Ad
hoc contacts between Roma NGOs and relevant ministries have taken place. There
have been efforts by the Labour Ministry and İŞKUR to promote the employment of
Roma in temporary jobs of public benefit. Vocational training has also been
provided.

An administrative court annulled the
preliminary project to transform the historical Roma Sulukule district in
Istanbul. Legal procedures are continuing before the Council of State.

However, there was criticism of the
temporary nature of the courses and employment offered and the lack of
information about the programme. Medium- and long-term planning to increase the
employability of Roma citizens is needed. The Roma population had little access
to regular, recorded jobs and continued to be subject to prejudice and
discrimination.

Roma children
were reported to have high drop-out and absenteeism rates even in primary
school.

Teachers
working in schools attended mainly by Roma children appear to be frequently
transferred and assigned to other duties, which may have an impact on the
quality of education.

Roma continued to have difficulties with
access to health services and problems of poor housing conditions, in some
cases because they did not have identity cards.

Urban renewal needs to be managed in a
transparent manner and wherever possible without displacing communities; it
should go hand in hand with employment efforts.

Overall,
there has been some progress but a systematic approach is needed to tackle the
problems of Roma. A comprehensive strategy needs to be established and the
issue needs to be reflected and mainstreamed in main policy areas. There is
lack of quantitative data on the situation of Roma, which prevents informed
policy-making.

Situation in the east and south-east

An incentives package was announced in
April 2012, focusing partly on increasing investment in the least developed
regions and reducing regional disparities. The South-East Anatolia Project
(GAP), aimed at improving the socio-economic development of the region, has
been extended for another five years. Dam projects continued, but were
criticised for threatening sustainable development by destroying the living
conditions of the local population, including historical heritage, natural
habitats, species and agricultural land.

In January the case of the 2005 bombing of
a bookstore in the south-eastern district of Şemdinli came to an end after a
lengthy trial marred by disputes over jurisdiction. The Court handed down
nearly 40-year sentences to each of the three defendants.

The clearance of landmines continues.

The Kurdish issue and options for a
solution were widely discussed; however, the 2009 democratic opening aimed at addressing amongst others the
Kurdish issue was not followed through.

Terrorist
attacks by the PKK, which is on the EU list of terrorist organisations,
multiplied and intensified and claimed many victims. The attacks were strongly
condemned by the EU.

There has been
a worrying increase in kidnappings of security personnel and civilians,
including elected politicians.

The high number of arrests and detentions
in the context of operations against the Union of Communities of Kurdistan
(KCK), the alleged urban wing of the PKK, led to serious tension.

The government
announced that the state had abandoned confidential talks with the PKK, but
expressed the intention to continue dialogue with political parties not
associated with the PKK.

Anti-KCK
operations widened, not only targeting Kurdish politicians, locally elected
mayors and members of municipal councils, but also media representatives, human
rights defenders, trade unionists, prominent academics and lawyers,. According to official statistics, 31 mayors and 226 local
representatives are currently detained in connection with the anti-KCK case.
The situation seriously affects local government and administration. Democratic Society Congress (DTK) Co-Chair and Van MP Aysel Tuğluk
was sentenced to 14.5 years in prison on charges of ‘spreading propaganda for a
terrorist organisation’ and ‘committing crime on behalf of an illegal
organisation despite not being a member of it’ following speeches she made. The trial of defendants for alleged membership of the KCK
continued before the Sixth Serious Crimes Court in Diyarbakır. There were
several similar anti-KCK cases in other provinces.

The JİTEM (the
Gendarmerie’s intelligence organisation) and Colonel Temizöz cases regarding
extrajudicial killings and persons missing since the 1990s continued before the
Diyarbakır Serious Crimes Court. Numerous files on missing persons and
extrajudicial killings dating from the 1990s are approaching the statute of
limitations.

34 civilians
were killed in Uludere by the Turkish armed forces on 28 December. The
authorities prevented a number of NGOs from visiting the site of the airstrike.
In February, a sub-committee of the parliamentary Human Rights Inquiry
Committee was set up to inquire into the killing of Uludere villagers. Judicial
and administrative investigations are ongoing. However,
there are concerns about their transparency and effectiveness. Allegations of
intelligence failure and operational negligence have not been cleared up. At the end of February, the Şırnak Prosecutor sent the file on
Uludere to the Diyarbakır Prosecutor with Special Authority noting that the
incident did not fall within their competence. There has been no direct
apology, from either the military or civilian authorities.

Newroz (New Year) ceremonies were restricted to only one day. In many
provinces, there were violent incidents and clashes with security forces. (See
Freedom of assembly)

No steps were
taken to dismantle the village guard system, a paramilitary force of more than
45,000 paid and armed by the state, and there is no comprehensive plan to do
so.

Overall, there was no progress towards a solution as regards the Kurdish
issue. Terrorist attacks intensified, as did military operations. The detention
of elected politicians and human rights defenders gives rise to serious
concerns. In incidents such as the Uludere killings of civilians, calls on the
authorities for effective and swift investigation and a transparent public
inquiry have not been met. 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. The statute of limitations deadline will soon bring an
end to judicial investigations on past crimes, without result. Landmines and
the village guard system are still causes for concern.

Refugees and internally displaced persons (IDPs)

The period of implementation of the law on
compensation of losses resulting from terrorism and the fight against terrorism
has been extended by one year in April. Up to September, 361,391 applications
were submitted to the Damage Assessment Commissions. Of these, 305,758 were
assessed, with compensation paid in 166,158 cases and 139,600 applications
rejected. By September, the Damage Assessment Commissions had awarded
compensation totalling almost € 1,230,000,000 to claimants who signed
negotiated/amicable settlements. However, delays in payments have continued.
Various claims were rejected by the administrative courts. Several cases are
pending before the ECtHR. There is a need to thoroughly assess the
effectiveness of legislation and the process of granting compensation.

The number of
internally displaced persons (IDPs) has increased as a result of two
earthquakes in Van in October and November 2011. The Tuzla IDP camp in Mersin,
which has been in place for 15 years, needs upgrading in terms of service
provision and accommodation. IDPs often live in sub-standard conditions, in
camps and elsewhere. Many still find it difficult to return to their previous
place of residence mainly for reasons of security, the continuing village guard
system, the presence of landmines, a lack of basic infrastructure and capital,
and limited job opportunities. The authorities have not yet shared information
on the urban reconstruction and redevelopment plan for Van.

Concerning refugees and asylum-seekers,
law enforcement officials and central and local administrations have improved
their practices. There were improvements in treatment and detention conditions
in the removal centres. Turkey maintained an open border policy with Syria.
Turkey is providing humanitarian assistance to nearly 100,000 Syrians who fled
the country, hosted in camps located in four southern provinces. General living conditions in the camps have been praised by
international observers. (See also Chapter 24 – Justice, freedom and
security) However, pending the adoption and
implementation of the Law on Foreigners and International Protection, gaps in
legislation and in immigration-related detention and deportation practices
remained a concern. Unaccompanied minors found themselves at risk of detention
together with adults and without access to State child protection services. There
were reported cases of access to UNHCR services and asylum procedures being
blocked. Individuals going through asylum procedures experienced difficulties
with access to adequate accommodation, work, health services, education and
integration support. Asylum-seekers who did not qualify for contribution-free
general health insurance under the new Social Security Law were charged monthly
contribution fees which were unaffordable for those without employment.

Overall, the
process of compensating IDPs has continued but the effectiveness of the system
has to be assessed. Some improvements were made to detention conditions in the
removal centres. Turkey has successfully provided humanitarian assistance to
the Syrian refugees. However, there is still no national strategy to address
IDPs’ needs better and no comprehensive legal framework for refugees and
asylum-seekers. Further improvements in detention and deportation practices are
needed.

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 a fair, comprehensive and viable
solution to the Cyprus problem. This support was reiterated on several occasions
by the authorities in the context of the Greentree Conferences in October 2011
and January 2012, and during the EU-Turkey Association Council in June. The UN
Secretary-General indicated in his latest report on the UN operation in Cyprus
of June 2012 that until the sides reach an agreement on how to proceed with the
substantive settlement negotiations, the focus will be on continuing the work
of the bi-communal technical committees.

As emphasised in the negotiating framework
and in Council declarations, Turkey is expected to actively support the
negotiations aimed at 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 EU is founded.
Turkey’s commitment and contribution in concrete terms to such a comprehensive
settlement is crucial. Regrettably, on several occasions, statements at senior
political level spoke of alternatives to a comprehensive settlement under UN
auspices.

Turkey continued to issue statements
objecting to drilling operations carried out by the Republic of Cyprus and
threatening retaliation against oil companies that would participate in Cypriot
exploration, following Cyprus’s announcement that it would launch a second
round of off-shore exploratory licences. The EU stressed the sovereign rights
of EU Member States which include, inter alia, entering into bilateral
agreements, and to explore and exploit their natural resources in accordance
with the EU acquis and international law, including the UN Convention on
the Law of the Sea. Turkey and representatives of the Turkish Cypriot Community
signed a ‘Continental shelf delimitation agreement’ and Turkish company TPAO
supported on-shore exploratory drilling activities in an area near Famagusta.

Despite repeated calls by the Council and
the Commission, Turkey has still not complied with its obligations as outlined
in the declaration by the European Community and its Member States of 21
September 2005 and in Council conclusions, including those of December 2006 and
December 2011. 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 with Cyprus, including
restrictions on direct transport links. There was no progress on normalising
bilateral relations with the Republic of Cyprus. Moreover, Turkey stated that
it would not attend any meeting chaired by the Cyprus EU Council Presidency. A
government circular instructed all Turkish civil servants to abstain from
meetings and contacts with the Cypriot Presidency of the Council of the EU. The
European Council expressed serious concerns with regard to Turkish statements and
threats and called for full respect for the role of the Presidency of the
Council, which is a fundamental institutional feature of the EU provided for in
the Treaty.

Turkey has not
lifted its veto of Cyprus’s membership of several international organisations.

Peaceful settlement of border disputes

After the last
round of exploratory talks in July 2011, discussions are on-going between
Greece and Turkey to set a date for the next round.

In April,
Greece strongly objected to Turkey’s launch of a tender for offshore oil and
gas exploration including part of the continental shelf off the Greek island of
Castellorizo.

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 has underlined 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 expresses serious concerns and 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 and
Cyprus made formal complaints about violations of their territorial waters and
airspace by Turkey, including flights over Greek islands.

Regional cooperation

Turkey remains
involved in regional initiatives, including the South-East European Cooperation
Process (SEECP) and the Regional Cooperation Council (RCC). Turkey supports the
European integration of all countries in the region.

The enhanced
political dialogue on foreign policy stemming from the positive agenda provides
an ideal platform to exchange views and to fine-tune positions.

High-level
bilateral meetings were held with all countries in the region, reflecting
Turkey’s firm commitment to promoting peace and stability. Turkey increased its
presence in the region also in terms of financial and technical assistance, by
delivering projects through its development agency TIKA.

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 the EU-led police mission in Bosnia
and Herzegovina (EUPM) and to the EULEX mission in Kosovo\*.

Relations with Bulgaria
remained positive. The Bulgarian Prime Minister visited Turkey in March.

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

3.
Economic criteria

In examining 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

The
Pre-Accession Economic Programme (PEP) submitted to the Commission in January
2012 reflects commitments to a rebalancing process away from debt fuelling
consumption towards exports. Although such adjustment process is positive for
economic stability, Turkey has large external imbalances, and remains
vulnerable to further global financial shocks, in particular capital flow
reversals. As more ministries and governing structures have been created, the
fragmentation of responsibilities between government bodies appears to be
increasingly complicating coordination for budgeting and medium-term economic
policy making. Decisions are sometimes taken on an ad hoc basis and impact
assessments are either lacking or based on partial information. However, there
have been no major instances of internal conflicts and tensions in economic
policies in recent times. Overall, the consensus
on economic policy essentials has been preserved.

Macroeconomic stability

In 2011, the
Turkish economy grew by 8.5%, only slightly down from 9.2% in 2010. Growth was
largely driven by the private sector, with consumer spending up 7.7% on the
year and private sector investment up 22.8%. The strength of domestic demand
led to import volumes increasing 10.6% on the year, while the level of export
volumes was 6.5% higher than in 2010, partly as a result of the depreciation of
the Turkish lira (by 20% vis-à-vis the euro in 2011). Since mid-2011, however,
the pace of growth has been slowing down gradually in line with the slowdown in
domestic demand, accompanied by an improvement in the trade and current account
balances. A major growth deceleration was observed in the first half of 2012,
to 3.1% year-on-year. Private
domestic consumption (residents households), which accounts for over 70% of
GDP, was down by 0.2% year-on-year in the first six months of 2012, while fixed
investment decreased by 3.2%, compared with a 18.3% increase in 2011. The only
domestic demand component that posted above-average growth was government
consumption, which increased by 4.9%. A further deceleration is already
being witnessed to some extent in leading indicator data. Surveys of
manufacturing business confidence and capacity utilisation have recently fallen
back to their weakest levels in two years. However, industrial production and
credit growth accelerated in mid-2012 after a couple of weak quarters. In 2011,
the per capita GDP of Turkey (PPP adjusted) amounted to 52% of the EU average. Overall,
economic growth is slowing down, from high levels, due to weaker domestic
demand.

The current account deficit rose from 6.6%
of GDP in 2010 to 10% in 2011. The increase was entirely due to the
deterioration of the merchandise trade deficit. In 2012, Turkey continued to
run a large current account deficit, which leaves the Turkish currency
vulnerable to a sudden loss of investor confidence. However, the deficit has
been narrowing, to about 8.5% of GDP by mid-2012, mainly as a result of an
improvement in the merchandise trade deficit owing to weaker domestic demand,
lower oil prices and strong export growth. Given the slowing of the economy and
falling energy and food prices, the current account deficit is expected to fall
further in the months ahead, although an expected deterioration in external
economic conditions may make the increase in export earnings difficult to
sustain. Capital inflows (including net foreign direct investment, foreign
purchases of government bonds in the international and local markets and
foreign lending to Turkish banks and companies) largely offset the current
account deficit during 2011 and the first half year of 2012, although they were
significantly lower than a year earlier. In 2011, a large positive balance was
recorded for the net errors and omissions item of the balance of payments,
which is thought to reflect informal repatriation of funds held abroad. At the
same time, foreign direct investment remains low proportionally to the size of
the current account deficit, at only 13% of total capital inflows over the first
six months of 2012. Turkey’s large dependence on shorter-term capital makes it
highly susceptible to the current global uncertainties. The Central Bank’s official
reserves decreased from € 61 billion in 2010 to € 56 billion in 2011,
but these losses have already been mitigated by mid-2012. At the same time,
gross external debt decreased from 39.9% of GDP to 39.7% of GDP. In early May
2012, the parliament passed a bill easing restrictions on property purchases by
foreigners, which is likely to increase capital inflows for this purpose. Overall,
the external imbalances have remained significant.

Unemployment was
9.8% in 2011, down from 11.9% in 2010. In the half year of 2012, unemployment fell further to 8.9%. The employment rate stood at
45.3% in the first semester of 2012, up from the 44.9% observed in December
2011 and 43% in 2010, while non-farm unemployment fell to 10.1% in May 2012
from 11.6% the year before. While the labour participation rate is 71.4% for
men, it is as low as 30% for women, in spite of an increase of more than 4
percentage points from a year earlier. Despite the low proportion of the female
population actively looking for work, the female unemployment rate is 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. This reduces the percentage of women of working age
who are employed and receive an income to less than 15% of the total. Lack of
affordable child care is among key barriers for women’s entry into the labour
market. The labour market needs to absorb the
unemployed and about one million new entrants every year. Overly strict
employment protection laws discourage employers from hiring. The prevalence of
undeclared work remains a major challenge. Overall, robust economic
development allowed strong employment growth and a drop in unemployment.

Inflation was
10.5% in 2011, almost doubling from 6.4% in 2010 and the official target of
5.5%. Annual core inflation amounted to 9.8% in 2011. By August 2012, however,
consumer prices have dropped, in spite of highly volatile energy and food
prices, to 8.9% year-on-year. Core inflation amounted to 7.8% in August. Partly
in view of the recent increase in food prices, the Central Bank’s year-end
inflation target of 5%, with a 2 percentage points tolerance band, appears to
be within reach, helped by favourable base effects. By end-September 2012,
market expectations amounted to 6.8%. Overall, inflation has been high,
but came down in mid-2012 in spite of rapidly rising food prices.

Concerns about the level of inflation and
the vulnerability of the lira to heightened global risk aversion, owing to
Turkey’s still large current account deficit, have continued to pose obstacles
to a significant easing of monetary policy. Since late 2011, the Central Bank
has operated rather complex policies, based on an interest rate corridor and
various targeted macro-prudential measures, which have allowed it to adjust
banks’ funding costs on a day-to-day basis. The Central Bank has been compelled
to sustain a tightening bias over the past half year, in spite of some softening in recent months. Since July 2012, the
average bank funding rate fell from about 10% to below 7%, still more than two
percentage points higher than the one week repo rate of 5.75%. Given the
inflation volatility and the current weakness of the lira (alongside most
emerging market currencies) on the back of renewed financial stresses in the
eurozone, tight monetary policy needs to persist in order to safeguard Turkish
financial stability. The tightening appears to be increasingly successful in
shifting the drivers of growth away from domestic demand. However, more support
from the fiscal side, besides the specific and targeted macro-prudential
measures that are put in place, including by the banking regulator, may help
engineer a rebalancing and soft landing of the economy and ease the burden
placed on monetary policy. Overall, monetary policy has been
increasingly successful, as it was able to curb the growth of credit and
contribute to easing the current account deficit
at the same time.

The budget
performed better than expected in 2011, especially due to the robust recovery
in domestic demand, which provided significant support to indirect tax
revenues. The primary surplus rose from 0.5% of GDP in 2010 to 1.3% of GDP in
2011, and the overall central government budget deficit fell from 3.6% of GDP
in 2010 to 1.2% of GDP in 2011, compared with a budget target of 1% of GDP. The
social security deficit decreased from 2.4% of GDP in 2010 to 1.3% of GDP in
2011. The recent public receivables restructuring programme had a positive
impact on the social security system balances, generating extra revenues of
€ 3.3 billion, or 0.6% of GDP. In the first half of 2012, weaker demand
adversely affected the budget performance, and real tax revenues were roughly
at the same level as in 2011, as indirect taxes — which make up two thirds of
the total — were curtailed by the slowdown in consumer and import demand. According to the medium-term fiscal plan, the government
expects a budget deficit of 1% of GDP in 2012. This target has not been
adjusted for economic growth and revenues that were higher than anticipated in
2011. Therefore, fiscal policy may have more scope to support the monetary
policy efforts aimed at curbing domestic demand and thus the current account
deficit. The public debt stock fell further in 2011, and it amounted to
39.4% of GDP by the end of 2011. Overall, fiscal performance was satisfactory.

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. Consolidated general government accounts according to international
accounting standards are still not regularly published. This makes it difficult
for citizens to hold the government accountable for its management of public money.
Full implementation of the new Law on State Aid has been postponed. The
unification of all tax administration functions under the Revenue
Administration has been announced. The aim of this unification was to
strengthen the audit capacity and facilitate greater use of standard risk-based
audit techniques, thereby enhancing transparency. Overall, no efforts
were made to increase fiscal transparency.

Turkey’s fiscal and monetary policy mix
proved relatively successful in the aftermath of the crisis. The earlier fiscal
consolidation and structural reforms have contributed to robust growth.
However, making more progress with fiscal transparency,
adjusting the fiscal policy stance, doing more to target inflation and
preserving financial stability will be important ways to engineer a soft
landing of the economy and ensure sustainable growth. In particular, a sudden reduction or reversal of capital flows could put pressure
on the lira, resulting in higher inflation. The adoption of a strong fiscal
rule may not only enhance fiscal transparency, but also provide a strong fiscal
anchor and enhance credibility. Overall, the soft landing of the
Turkish economy remains vulnerable to bouts of financial uncertainty and the
global risk sentiment and more could be done to better coordinate and optimise
the policy mix.

Interplay of market forces

The share of administered prices in the
Consumer Price Index (CPI) basket remained at only 4.5%. At the same time, food
and alcohol prices – more than 25% of the consumer basket are highly sensible
to policy and administrative decisions. 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
officially linked to a cost-based methodology. However, the government
increasingly interferes and independently sets prices, thereby suspending
automatic mechanisms including in the transport sector.

There has been limited progress in the
restructuring and transparency of state-owned enterprises. The pace of privatisation slowed down significantly, chiefly due to
investors’ difficulties in gaining access to long-term external financing. As a
result, tenders for two electricity distribution companies remained inconclusive.
Deadlines and procedures for various tenders, including the natural gas tender,
were extended. Total privatisation receipts decreased from € 2.2 billion
in 2010 (0.4% of GDP) to € 971 million (0.2% of GDP) in 2011. Major deals
completed in 2011 were the port of İskenderun (€ 266 million) and the
Trakya electricity distribution company (€ 411 million). Planned
privatisations for 2012 include major electricity generation assets, highways
and bridges, and several ports. Remaining shares in Turkish Airlines, Turk
Telekom, Petkim, and state-owned banks Halkbank and Vakıfbank may also be the
subject of new privatisation deals. There is no plan for the privatisation of
Ziraatbank and the national lottery yet. Overall, the government has
been increasingly interfering in the price-setting mechanism and difficulties
in gaining access to external financing have slowed down privatisation.

Market entry and exit

In 2011, the
implementation of the business registration process was fine-tuned. However,
starting a business in Turkey remains costly and corresponds to 11.2% of per
capita income. Some fees are still not transparent,
such as those for the official registration of a
company’s articles and accounts. Trade registry fees are significant. Progress
in removing exit barriers remains weak. Closing a business is still expensive
and time-consuming. Insolvency procedures take about 3.3 years and recovery
rates — at 22% on average — remain very low. Registering a property in Turkey
costs 3.3% of its value, requires six separate procedures and takes six days.
Obtaining a construction permit is expensive and time-consuming: on average, it
takes 24 procedures and 189 days. Costs correspond to almost 200% of the
average per capita income. Overall, market entry
is satisfactory, while market exit remains costly and long, and insolvency
proceedings are still heavy and inefficient.

Legal system

A reasonably well functioning legal system,
including in the area of property rights, has been in place for several years.
Enforcement of commercial contracts is still a rather lengthy process,
involving 36 procedures and taking an average of 420 days. Commercial court
judges lack 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
seldom used. The judicial system and administrative capacity can be further
improved. Overall, the legal system continues to function relatively
well, but no progress has been observed.

Financial sector development

In 2011, the financial sector continued to
perform well, and total financial sector assets increased by almost a third.
Risk ratios in the financial sector remained robust. Banks continued to
dominate the sector, as their share of total financial sector assets remained
about 80%. Banking assets values are about 100% of GDP. The share of
state-owned banks in total banking sector assets decreased from 30% in 2010 to
26% in 2011, while domestic private banks had a 32% share. Foreign banks’ share
reached 21.9% (41.6%, if ownership through the stock exchange is also
included). There was no progress in the privatisation of state-owned banks
planned a long time ago. The share of the insurance sector remained small and
underdeveloped, with 3% of the total financial sector. Largely in tandem with
the growth performance, credit expansion slowed down gradually, from about 40%
year-on-year in mid-2010, to about 12% by mid-2012. Both the banking sector
loan stock and its deposits’ stock amounted to about 50% of GDP by mid-2012.
The loans to deposits’ ratio increased gradually from 83% in 2010 to 99% in the
second quarter of 2012. The value of outstanding debt instruments traded in the
bond market amounted to about 40% of GDP. Private debt issues increased
significantly, from 1.3% of the total equity market in 2011 to 4.1% in
mid-2012. The share of non-performing loans in total banking sector loans
decreased from 3.7 in 2010 to 2.7% by the end of 2011. The capital adequacy
ratio decreased further, from 19% in December 2010 to 16.5% in June 2012, still
significantly above the statutory minimum of 12%. The authorities established a
financial stability committee under the chairmanship of the deputy prime
minister in charge of the economy. The committee aims to monitor systemic risks
and their management and identifies policy measures to be undertaken. The
committee met eight times since its establishment in June 2011. Overall,
the financial sector has continued to show dynamism and strength thanks to
earlier in-depth reforms.

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

Existence of a functioning market economy

Turkey’s robust
growth in a context of major global volatility confirms the economy’s improved
fundamentals and enhanced resilience to shocks. However, the rapid expansion of
the current account deficit and strong inflationary pressures point to the
return of significant imbalances in the Turkish economy. Overall, the
functioning of market mechanisms has remained intact.

Human and physical capital

The educational reform programme, which is
a key component of the National Development Plan 2007-2013, is coming to an
end. It sets two key priorities for education modernisation and reform: namely
increasing the responsiveness of education to demand and enhancing the quality
of the education system. By 2011, some progress has been made. Illiteracy rates
for the population aged 15 or above decreased from 7% in 2010 to 5.7% in 2011
and from 11.4% to 9.4% for women. The ratio of university graduates in the
population aged 15 or above increased from 9.2% in 2010 to 10.8% in 2011. The
net schooling ratio in primary education (eight-year cycle) increased slightly,
while the net schooling ratio in secondary education also increased
significantly, from 65% to 69% during the same period. However, challenges have
remained substantial. Participation in higher education remains low by
international standards and, although there has been some progress and the top
students in Turkey are performing well, the vast majority of Turkish students
display low proficiency levels in basic skills and problem-solving. As from the
school year 2012-2013, compulsory education has been extended from 8 to 12
years. This decision has been taken without proper impact-assessment. It may
imply a significant fiscal cost and affect the overall education quality.
Turkey increased funds for active labour market policy significantly. Overall,
reforms and increased spending on education have so far generated a positive
impact on educational attainment and schooling rates, but significant problems
remain with regard to the quality of education.

Investment rose from 18.9% of GDP in 2010
to 21.9% in 2011, entirely thanks to private sector investments, which increased
from 15% of GDP to 18.1% of GDP. Gross FDI inflows to
Turkey increased from € 6.8 billion to € 9 billion. Although the official aim of the government is to increase
expenditures on research and development to meet the target of 2% of GDP, the
actual outcomes remain much lower, given that R&D expenditure amounted to
just 0.84% of GDP in 2010 (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. Modest progress was made in the
upgrading of infrastructure. Overall, improvements in the country’s
physical capital have been modest.

Sectoral and enterprise structure

The share in employment of agriculture and
construction stabilised at 25.5% and 7% respectively in 2011. Fewer jobs were
created in services and industry, whose share in total employment went down to
48% and 19.5% respectively in 2011. Growth has been particularly job-rich as
overall employment grew by 6.7% in 2011, slightly up from 6.2% in 2010. At the
same time, the relative output of the service sector fell by one percentage
point to about 63%, while the share of agriculture and industry went up
marginally to 8% and 26% of GDP respectively in 2011.

Progress in liberalising the utilities
sectors has been uneven. The draft Electricity Market Law, which is to repeal
the existing one, was discussed with stakeholders and sent for the approval of
the Prime Ministry. However, no tangible progress can be reported on reducing
BOTAS’ (gas) monopolistic market share while attempts to replace the terminated
contract with the Russian Federation by contracts with the private sector
remained unsuccessful. Regarding the telecommunications market, steps to
increase the level of competition in the market continued. The wholesale line
rental (WLR) implementations which started in February 2012 further enhanced
competition, in particular in the broadband and fixed telephony markets. Overall, the
liberalisation of network industries gathered pace.

State
influence on competitiveness

Only very limited progress was made in the
area of State aid. The legislation implementing the State Aid Law was
originally scheduled to be enacted by the end of September 2011. However, a
decree-law issued in November 2011 stipulated that this legislation would only
enter into force by the end of June 2013. The implementing legislation
concerning the State Aid Authority is not in place yet. However, a significant
incentives package, superseding the 2009 stimulus package, was presented by the
Turkish authorities in early April 2012 and adopted in June 2012. The State Aid
Authority is still expected to formally establish a comprehensive State aid
inventory and an action plan for aligning all State aid schemes with the acquis. The legal framework for public procurement continued to comprise
various exemptions and is still not in line with the EU acquis. Overall, there has been very limited
progress in enhancing the transparency 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
increased significantly from 48% in 2010 to 56.5% in 2011. At the same time,
the EU’s share of Turkey’s total trade decreased from 41.7% in 2010 to 40.8% in
2011. Between 2010 and 2011, the EU share of Turkey’s exports remained stable
at 46%, while its import share decreased from 42.6% to 41.7%. However, first
half of 2012 data indicate that shares have been falling due to a weakening of
EU demand. The EU continued to be the main source of FDI inflows to Turkey,
albeit with a falling share: 76% in 2010, and 71% in 2011, as FDI from non-EU
countries increased more than from the EU. In nominal terms, foreign capital
investment inflows originating from the EU countries — excluding real estate —
more than doubled in one year, increasing from € 3.5 billion to € 8
billion. 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 slightly
faster pace than labour productivity in 2011 and the first half year of 2012.
Labour costs went up in 2011 by 10.2% for the whole economy, by 9.1% in
manufacturing, and by 14.1% in the construction sector. Conversely, the
non-wage labour cost index, which shows social security contributions and
severance payments per hour, increased by 9.1%. The Turkish lira depreciated
vis-à-vis the euro by 20% and against the US dollar by 23.3% in 2011. The real
effective exchange rate (against a basket of 50% US dollar and 50% euro) also
decreased in 2011 by about 15% (the CPI-based REER index decreased from 125.7
in 2010 to 109.5 in 2011). High inflation and some appreciation in 2012 caused
the REER index to climb to 115 in mid-2012. Overall, Turkey’s
international competitiveness has increased, primarily due to a depreciation of
the currency in 2011.

4.
Ability to take on the obligations of membership

This section examines
Turkey’s ability to take on 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

Some progress can be reported regarding
alignment with general principles. The pilot implementation of the
risk-based import control system TAREKS was extended to new product categories.
The importers of these products need to register on TAREKS. For products that
hold an ATR certificate, and are thus in free circulation in the EU, a TAREKS
reference number authorising imports is directly issued by the system with no
further checks. Hence, the EU origin condition is finally abolished for these
product categories. Third-country products in
free circulation in the EU which fall under other New Approach directives in
the electro-technical field, pressure equipment and gas appliances are still
subject to conformity assessment checks on documentation and if necessary to
physical checks at customs. This delays their access to the Turkish market. Textiles and clothing goods originating in
a third country and in free circulation in the EU are subject to additional
duties when they enter the Turkish market. This measure, in place since 22 June
2011, is in breach of the basic principles of the Customs Union. Turkey decided
on 1 June 2012 that the additional duties shall not be levied on goods
originating in countries with which Turkey has signed an FTA and which are
included in the system of diagonal cumulation provided that a proof of
preferential status of the goods is submitted. For goods originating in other
third countries, the measure continues to be in place.

Technical barriers to trade continue to
exist and prevent free movement of goods in certain areas such as
pharmaceuticals. Good manufacturing practice (GMP) certificates issued by EU
Member States, which form part of the marketing authorisation for
pharmaceutical products for human use, are still not accepted and the products
require a GMP certificate issued by the Turkish authorities. This causes long
delays in the registration process and results in de facto discrimination
against EU imports to the advantage of domestic producers. The online
registration requirements for imports of textile and clothing remain in effect
although some flexibility has been introduced regarding the type of information
to be given, in order not to require companies to disclose information of
commercial value. Licences are still required for old or second-hand goods such
as construction equipment and for goods considered as renovated or faulty. For
alcoholic beverages, a pre-notification system replaced the previous control
certificate system, bringing some improvement. Exports of aluminium, paper and
copper scrap and imports of certain processed agricultural products are subject
to restrictions that constitute a de facto breach of the Customs Union rules.
Some other goods are subject to prior registration.

As a major step in alignment, Turkey
adopted a long-awaited regulation on mutual recognition in the non-harmonised
area. The regulation will enter into force on 1 January 2013. It is expected
that this will remove a number of technical barriers to the free movement of
goods.

Although Turkey has reached an advanced
level of alignment in this chapter, Turkey still needs to fully incorporate
into its internal legal order the remaining EU instruments relating to the
removal of technical barriers to trade in the area of Customs Union enumerated
in Annex II to Decision 2/97 of the EU-Turkey Association Council. Turkey has
agreed to incorporate the updated list of Annex II into its internal legal
order.

As regards horizontal measures,
further progress can be reported in the area of standardisation. The
Turkish Standards Institute (TSE) became a full member of the European
Committee for Standardisation (CEN) and the European Committee for
Electrotechnical Standardisation (CENELEC) in January 2012. The Turkish
standardisation system is now fully integrated into the European system. The founding
law of the TSE was revised in November 2011, all references to mandatory
standards were removed and all its publications were made subject to
intellectual property rights law. The adoption of European standards by the TSE
continued. The TSE has so far adopted a total of 17,422 CEN and CENELEC
standards. Turkey has so far harmonised with a total of 391 standards of the
European Telecommunication Standards Institute (ETSI). The overall rate of
harmonisation with European standards stands at around 96%. The TSE is running
82 operational committees. However, the TSE needs to apply a more participatory
approach in its standardisation work, especially as regards SMEs and consumer
organisations.

In terms of conformity assessment,
further progress was achieved in the area of notified bodies. There are now 23
Turkish notified bodies compared with 18 in 2011. There are two approval bodies
in the area of construction products.

Some progress can be noted regarding accreditation.
The Turkish Accreditation Agency, TURKAK, is a member of the European
Cooperation for Accreditation (EA) and a signatory of seven multilateral
agreements of the EA. The number of TURKAK accreditations increased by 13%
since last year and reached 647. TURKAK is the Monitoring Authority in the area
of Good Laboratory Practice (GLP). However, it has not yet established any GLP
monitoring programme. TURKAK was affiliated to the Ministry of EU Affairs
instead of the Ministry of Science, Industry and Technology in April 2012. This
was a positive step towards increased transparency and a reduced risk of
conflicts of interest. Following this a revised law aimed at further
harmonising TURKAK’s structure with the European accreditation system was
adopted. Although the law does not address all issues regarding TURKAK’s
financial and administrative autonomy, it brings improvements to the system in
the right direction.

Some progress can be reported in the area
of legal metrology. New and amending legislation was issued on the
servicing, inspection and verification of tachographs, as well as on the
certification of persons to be authorised to repair and adjust measuring
instruments. A national strategy on metrology was prepared and agreed.

There was some progress on market
surveillance. A Prime Ministry circular was issued in September 2011 on
Market Surveillance and the Product Safety Evaluation Board, drawing the
attention of all relevant public authorities to the importance of actively
participating in Board activities. The Market Surveillance and Product Safety
Evaluation Board adopted the new National Market Surveillance Strategy
2012-2014 document. The Ministry of Customs and Trade published a communiqué on
the safety risks of some consumer products falling under the non-harmonised
area and set down minimum essential safety requirements. It is expected that
market surveillance activities in these product groups will be enhanced. The
database linking accidents and injuries to products has been started up on a
pilot basis. Notifications of unsafe products to the Ministry of Economic
Affairs by market surveillance authorities have continued. However,
insufficient coordination within and between surveillance agencies, scarce
allocation of financial and human resources, and infrequent use of risk
assessment and sampling methods still need to be addressed. Market surveillance
actions are not systematically evaluated. The visibility of market surveillance
remains low. Stakeholder involvement in surveillance remains weak.

Turkey is partially aligned with the 2001
General Product Safety Directive, and with the Regulation on accreditation and
market surveillance. Full alignment and effective implementation of market
surveillance have yet to be achieved.

There was some
progress on the ‘Old Approach’ product legislation. Turkey adopted
amending legislation on the type approval of the braking systems of two- or
three-wheeled motor vehicles, and of motor vehicles and agricultural and
forestry tractors with respect to emissions and on radio interference of motor
vehicles. New regulations on the general safety of motor vehicles and their
trailers, labelling of tyres, towing devices, wheel guards, statutory plates,
windscreen wiper and washer systems and space for rear registration plates were
also published. Turkey issued legislation on energy labelling in order to
encourage energy efficiency. An amending regulation on the pricing of
pharmaceuticals for human use changed the pricing system once again. An
amending regulation concerning the packaging and labelling of pharmaceuticals
was adopted. Turkey established a new Medical Devices and Pharmaceuticals
Agency to deal with the regulation, licensing, pricing and monitoring of
pharmaceuticals for human use, and the regulation and market surveillance of
medical devices. Certain provisions of the Turkish legislation do not provide
legal certainty with regard to data exclusivity for any combination
pharmaceutical product registered in the Customs Union after 1 January 2005.
The cumbersome and lengthy procedure for issuing GMP certificates continues to
affect the marketing authorisation of pharmaceutical products in Turkey and it
can in some cases have an indirect impact on regulatory data exclusivity.
Turkey adopted legislation on veterinary pharmaceuticals aimed at aligning with
the acquis.

Some further progress can be reported in
the already advanced area of ‘New and Global Approach’ product legislation.
Turkey adopted legislation on the publication of technical specifications and
national and EU technical approvals, on conformity verification systems and on
reaction-to-fire aspects of construction products. A categorisation guide was
issued for personal protective equipment in order to facilitate the CE marking
of these products. Lists of harmonised standards were updated and published on
recreational crafts, radio and telecommunication terminal equipment and
personal protective equipment. A communiqué regarding A-type inspection bodies
was adopted in order to further operationalize the legislation on lifts. The
eco-design requirements for several energy-using products were published.

Some progress can be reported regarding procedural
measures. The Turkish legislation is now partially aligned with the acquis
in this area. There was no progress regarding cultural goods and firearms.

‘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 in Cyprus, Turkey will not be in a
position to fully implement the acquis relating to this chapter.

Conclusion

Some progress can be reported in the area
of free movement of goods. However, technical barriers to trade continue to
prevent free movement of goods in violation of Turkey’s obligations under the
Customs Union. The delays in issuing GMP certificates and the problem of data
protection for pharmaceutical products need to be solved. The remaining import
and export licences and the restrictions on imports of used goods need to be
abolished. Overall, the preparations in this area are advanced.

4.2.
Chapter 2: Freedom of movement for workers

There have been no developments in the area
of access to the labour market.

There has been some progress as regards
future participation in the EURES (European Employment Services)
network. The Turkish Employment Agency (ISKUR) has improved its IT
infrastructure and capacity.

Some progress can be reported in the area
of coordination of social security systems. The capacity of the Social
Security Institution has been further strengthened.

There have been no developments with
respect to the European Health Insurance Card.

Conclusion

There has been little progress in the area
of freedom of movement for workers. Turkey increased its capacity with a view
to future participation in EURES and coordination of social security systems.
Preparations in this area have been launched.

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

No progress was recorded on the right of
establishment and freedom to provide cross-border services.
A detailed alignment strategy has not been produced yet. As regards the
right of establishment, disproportionate requirements remain. In the field of
freedom to provide cross-border services, no progress was observed.
Registration, licensing or authorisation requirements are still in place for
service providers established in an EU Member State who apply for work and
residence permits in Turkey and there is no mechanism to prevent further
requirements from being introduced, something which happened during the
reporting period. Alignment with the Services Directive has not yet been
achieved, and no Point of Single Contact exists.

There is no progress to report on postal
services. The draft postal law has still to be adopted. The legal monopoly
remains in place. In view of the legislative reform gradual market opening is
envisaged. Regarding administrative capacity, an independent regulatory
authority, whose establishment would ensure clear separation between regulatory
and (postal) operational functions, still needs to be established.

Limited progress can be reported on mutual
recognition of professional qualifications. A decree-law and its
implementing regulation removed legal obstacles to the employment of foreign
doctors and nurses in Turkish private hospitals. Nevertheless, the nationality
condition still remains in force for the public sector. The requirements
include Turkish language proficiency, residence permits, and recognition of the
equivalence of degrees and/or expertise. There is still no differentiation
between the recognition of professional and academic qualifications.
Furthermore, reciprocal recognition still applies to some regulated
professions, and nationality and excessive language requirements subsist.

‘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

Apart from the removal of legal obstacles
to the employment of foreign doctors and nurses in Turkish private hospitals,
very little progress can be reported in this chapter and, overall, alignment is
at an early stage.

4.4.
Chapter 4: Free movement of capital

No progress can
be reported on capital movements and payments. The study on the
potential impact of gradual liberalisation for the legal framework on real
estate acquisition by foreigners is ongoing. Turkey abolished the reciprocity
principle for physical persons and extended the number of eligible countries to
183 taking into account national interests and bilateral relations. Although
the eligibility list is not public, it seems that restrictions remain for Greek
citizens in coastal regions and in Istanbul, for Bulgarian citizens in the
Turkish Bulgarian border provinces as well as for Cypriot citizens. Turkey’s
legislative framework in this area is not in line with Article 63 of the Treaty
on the Functioning of the European Union. Turkey still needs to adopt an action
plan for gradually liberalising the acquisition of real estate by foreigners in
line with the acquis and to demonstrate progress in the implementation
of gradual liberalisation.

Restrictions on
foreign ownership persist in radio and TV broadcasting, transport, education,
and the privatisation of electricity distribution and generation assets.
Considerable efforts are needed to align the current legal framework on capital
movements and payments with the acquis. No progress can be reported in payment
systems.

Limited progress has been made on alignment
with the acquis in the fight against money laundering. A draft
law on the prevention of the financing of terrorism was submitted to the
parliament but has not been adopted yet. The Financial Action Task Force (FATF)
therefore decided to keep Turkey on the list of jurisdictions with strategic
Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT)
deficiencies. Particular deficiencies identified by the FATF are the lack of
criminalisation of financing of terrorism and the inadequate legal framework
for identifying and freezing terrorist assets. In its public statement in June
2012 the FATF noted that despite Turkey’s high political commitment to work
with the FATF to address its strategic CFT deficiencies, Turkey has not made
sufficient progress in implementing its action plan and certain strategic CFT
deficiencies remain. The FATF urged Turkey to address these deficiencies and
announced that it would call upon its members to apply counter-measures
proportionate to the risks associated with Turkey if it does not take
significant action by October 2012.

In 2011 the Turkish Financial Crimes
Investigation Board (MASAK), which serves as the Turkish Financial Intelligence
Unit (FIU), has signed Memoranda of Understanding on exchange of information
with counterparts in 6 countries (the United Kingdom, Canada, Belarus, Finland,
Australia and Monaco). In 2012 MASAK signed Memoranda also with the United
States, Belgium, Netherlands, Poland, Malaysia and Kosovo.

The number of suspicious transaction
reports notified to MASAK in 2011 was 8,739, significantly less than in 2010
and 2009, while the number of reports notified to MASAK up to 9 April 2012 was
4,001. The reports originated mostly from the banking sector. The number of
suspicious transaction reports with regard to financing of terrorism increased
to 219 in 2011, against 186 in 2010. Results with regard to convictions,
confiscations, seizures and freezing of assets remain limited.

MASAK continued providing training to
examiners, judges, prosecutors and obliged parties. However, MASAK’s own
capacity needs to be further improved. Cooperation between MASAK, law
enforcement bodies and the judiciary has still 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.

In July 2012 the Parliament abolished the
system of Specially Authorised Courts. They will be replaced by Serious Crimes
Courts under the Anti-Terror Law. These new courts will also deal with cases of
laundering of criminal assets.

Conclusion

Limited progress has been made in the area
of free movement of capital. Restrictions on capital movements remain in place
in a number of sectors, including on direct investments originating from the
EU. Enforcement capacity against money laundering and
financing of terrorism needs to be improved. The legal framework to combat
financing of terrorism remains incomplete and further, urgent efforts are
needed as regards alignment with the acquis and the relevant FATF
recommendations. Overall, preparations in this area remain at an early stage.

4.5.
Chapter 5: Public procurement

There is no progress to be reported on general
principles. No significant changes were made in the legislative framework.
Exemptions and domestic preferences still need to be addressed. The National
Strategy and Action Plan for Public Procurement, in draft status for two years,
has not yet been adopted. Utilisation of the domestic price advantage clause
(15%) continued to increase significantly in 2011. It was applied for 40% of
the overall value of contracts above the threshold (23% in the first semester
2011) and for 16% (8%) of the number of contracts. However, while exemptions from
the Public Procurement Law continued and distorted consistency and
effectiveness of the Law, the value contracts rewarded outside the Public
Procurement Law dropped significantly from 19% to 8%. Aligning the scope of the
Public Procurement Law with the acquis is needed to ensure consistency
of the legislative framework.

Some progress can be reported with regard
to the award of public contracts. The Public Procurement Authority
further improved the electronic public procurement platform (EKAP), which currently
covers public procurement processes such as notification, tendering, selection
and evaluation. An E-procurement Research and Development Centre was
established at a university in Ankara. The EKAP call centre has continued to
provide advisory services to the procuring entities. The Public Procurement
Authority actively provided training. The Authority also received professional
assistance for training through the cooperation agreements with prominent
Turkish universities. The scope of training in public procurement needs to be
extended so that it can fully meet the needs of both contracting authorities
and economic operators.

The Ministry of Finance is responsible for
coordinating policy formulation and implementation. Shortcomings in its
staffing and operational capacity relevant for the area of public procurement
have been addressed. The Public Procurement Authority and the Ministry of
Development also have the necessary capacity to carry out their mandate. Market
functionality and competition with regard to other stakeholders such as
contracting entities and economic operators in most sectors are satisfactory.
The level of preparedness is high in this area.

The Turkish public procurement legislation
is not in line with the acquis in a number of respects. Both the
classical and utilities sectors are subject to the same law and procedures,
thus making the legislation for the utilities sector more restrictive than
envisaged by the EU Utilities Directive. Turkey needs to establish a more
coherent legal framework for concessions and public-private partnerships to
enhance transparency and efficiency. The 2012 thresholds and financial limits
for public procurement continue to be higher than those in the EU. A draft
alignment strategy for public procurement setting out milestones for full
alignment with the acquis has yet to be adopted.

No progress can be reported on alignment
with the Remedies Directives. In comparison to the previous year, the
number of complaints lodged by dissatisfied tenderers increased by 9%, from
4,281 to 4,670, whilst the overall number of tenders grew by 23%. The ratio of
complaints to the number of tenders was 3%, which suggests that the public
procurement system in Turkey is stabilising. However, the decree-laws adopted
in August and November 2011 raise concerns about the independence of the Public
Procurement Board from political interference and about its functional
autonomy. The implementation of these decree-laws needs to be closely
scrutinised. Turkey needs to align further its legislation on review mechanisms
with the acquis.

Conclusion

Limited progress can be reported in the
area of public procurement. The institutions are in place and administrative
capacity has improved. However, the draft alignment strategy, comprising a time-bound
action plan, needs to be adopted. Turkey needs to repeal derogations that are
not in line with the acquis and align further its legislation,
particularly on utilities, concessions and public-private partnerships. The
organisation of the remedies system remains to be reviewed. The preparations in
this area are moderately advanced.

4.6.
Chapter 6: Company law

Some progress can be reported on company
law. After its adoption in February 2011, the new Turkish Commercial Code (TCC) entered
into force in July 2012. However, an amendment to the new Code was adopted
before its entry into force, addressing mainly the relations between the
shareholders and the company, transparency and the accounting system. Certain
amending provisions are not in line with the acquis. Some implementing
legislation on the TCC has been adopted. Preparations for online company registration continued, including
preparations to extend its pilot application to all chambers
of commerce.

Further corporate governance principles
have been issued by the Capital Markets Board (CMB) and the principles have
been made applicable to a larger number of companies. Rules on the remuneration
policy of brokerage houses have been amended in order to comply with principles
on independent directors and directors’ remuneration. Principles regarding
merger proceedings have also been amended. However, the new corporate
governance principles increase the state involvement in the corporate
governance by giving more power to the CMB to control companies. The new TCC is
assigning a number of new tasks to commercial courts with regard to enforcement
of new company law rules, whilst the capacity of these courts still remains
insufficient. Professional business organisations, including chambers of
commerce, also need strengthening.

Some progress can be reported in the area
of corporate accounting. The legal framework for
financial reporting is in place. Turkey adopted 40 Turkish Accounting and
Financial Reporting Standards (TAS/TFRSs), 22 interpretations of the Standards
and TFRSs for SMEs. They are fully aligned with the corresponding International
Financial Reporting Standards. TFRSs are applied by listed companies, banks,
leasing, factoring and financing companies, insurance, reinsurance and pension
companies. The new TCC also requires other large capital companies to apply
TFRSs and these companies are to be audited by statutory auditors as of January
2013.

A newly established Public Oversight,
Accounting and Auditing Standards Authority took over all tasks and assets of
the dissolved Turkish Accounting Standards Board.

Turkey made significant progress in
auditing. The Public Oversight, Accounting and Auditing Standards Authority
was established in November 2011 and became operational in December 2011. The
new authority is responsible for setting standards for auditing, drafting code
of conduct, and approving, registering and monitoring statutory auditors and
audit firms. It employs 50 staff, including inspectors working directly on
public oversight of auditing. This capacity needs to be further strengthened.

Conclusion

Good progress was made in the area of
company law following the establishment of the Turkish Accounting and Auditing
Standards Authority. However, the capacity of the commercial judiciary and
business organisations needs strengthening in order to deal with the changes
made by the new legislation. Overall, Turkey is advanced in this area.

4.7.
Chapter 7: Intellectual property law

Some progress can be reported in the area
of intellectual property law. Political will to effectively enforce industrial
property rights remains weak. The second meeting of
the IPR Working Group between the EU and Turkey was held in January 2012.

Concerning copyright and neighbouring
rights, adoption of the draft Law on Intellectual and Artistic Works is
still pending. The re-structured Directorate-General for Copyright in the
Ministry of Culture and Tourism was put in charge of copyright issues. Eighteen
new junior copyright experts were recruited. Stakeholder dialogue was further
improved with regard to copyright protection. The number
of provincial inspection commissions was increased from 46 to 81 in 2011. These
commissions received IPR training. Provincial
inspection commissions are working efficiently and specialised IPR
police units conducted 3,229 operations in 2011. The number of suspects reached
3,678 and a total of 16,120 pirated items were seized in these operations.

Some progress can be reported with regard
to the implementation of industrial property rights. The draft law on
industrial property rights was opened for public consultation in January 2012.
Examination guidelines for trademarks, patents and industrial designs were made
public. The guidelines are expected to improve the consistency and coherence of
decisions while increasing the transparency and predictability of the services
provided by the Turkish Patent Institute (TPI) in terms of administrative
protection of IPRs.

The TPI has strengthened its institutional
capacity and contributed to the strengthening of the administrative capacity of
other enforcement bodies through tailor-made general and specific training
courses, study visits, consultation meetings and awareness-raising activities. It also recruited 30 new junior trademark and patent examiners and a
lawyer. Consistency between the TPI’s final decisions and those of the IPR
judiciary has further improved. The TPI signed in January 2012 a memorandum of
understanding with the Ministry of Culture and Tourism to establish an IPR Law
Academy. The Academy will be operational in 2013 and it will run the TPI’s
performance and training management system. The system aims to introduce
standard and professional vocational training for junior examiners.

There is still no regulatory framework for
the supervision of the conduct of trademark and patent agents.

No progress can be reported on enforcement
issues. Turkey does not have criminal enforcement measures for industrial
property rights other than trademarks. Adoption of a law on IPR enforcement
procedures in line with the EU Enforcement Directive is needed. In 2,920 police
operations, 3,238 individuals were suspected of industrial property rights
infringements following complaints by the right holders. Overall in 2011, over
6 million counterfeit items were seized. The issues of return of counterfeit
goods to the offenders, storage of the confiscated materials by right holders,
and difficulties in obtaining preliminary injunctions remain unresolved.

The average time
needed for decisions to be taken by civil and criminal IPR courts decreased
remarkably. IPR statistics were more accurately produced in 2011.
However, judicial enforcement needs further strengthening and the issue of
expert witnesses needs to be addressed.

Concerning IPR enforcement at customs, the
centralised customs database and IT management system are not effectively used
at the customs points to prevent counterfeit goods from entering the market.
Online applications for customs seizures by right holders are not possible yet
and a risk analysis system is not being used for potential IPR infringements.
Seizures upon complaints by right holders increased whereas ex officio
customs controls remained low, particularly as regards large shipments. Turkey
continues to be one of the main countries from which goods suspected of IPR
infringements enter the EU. IPR enforcement capacity at customs needs to be
strengthened, particularly with regard to export controls.

The Turkish national police carried out
awareness-raising activities across the country on the usage of unlicensed
software, and several seminars and workshops on intellectual property offences
were held since December 2011. Such initiatives need to be encouraged and
addressed to a wider public. Overall, there is a need for more effective
general awareness-raising campaigns on the risks of IPR infringements and the
benefits of a better functioning IPR system throughout the country.

Conclusion

Some progress can be reported in the area
of intellectual property law. Updated laws regulating intellectual and
industrial property rights and a law on IPR enforcement procedures in line with
the acquis need to be adopted. Increasing the capacity of the judiciary
and of the customs administration with a view to more effective IPR enforcement
is crucial. Combating counterfeit goods also needs to be improved. Closer
coordination and cooperation among IPR stakeholders and public bodies is
essential, as are general awareness campaigns on the risks of IPR
infringements. Turkey only partly addresses the priorities in this area.

4.8.
Chapter 8: Competition policy

There has been limited progress in the area
of anti-trust and mergers. The Competition Authority strengthened its
enforcement record by adopting a number of decisions, e.g. in the banking
sector. In March 2012 it published its first Competition Report, highlighting
regulatory and other barriers to competition in 11 industry sectors. The
Authority’s overall administrative capacity remains high. It continued to
uphold a satisfactory level of administrative and operational independence and
a commitment to high-level training for its staff. However, a decree-law issued
in late 2011 changed the rules for the appointment of its Chairman and Deputy
Chairman, which adds to concerns about the Authority’s ability to preserve its
independence, triggered in 2011 by a decree authorising the competent minister
to monitor and inspect the activities of the Competition Authority.

Banking mergers and acquisitions resulting
in a combined sectoral market share of below 20% are still excluded from the Competition
Act. Turkey still needs to align with the acquis on horizontal
cooperation agreements and de minimis rules, as well as with rules on
public undertakings and undertakings enjoying exclusive and special rights.
Turkey is at an advanced level of alignment in the field of anti-trust and
mergers.

No progress took place in the area of State
aid. The State Aid Authority has continued to develop its capacity. The
legislation implementing the State Aid Law has been prepared, and was
originally scheduled to be enacted by the end of September 2011. However, a
decree-law issued in November 2011 extended this deadline to the end of June
2013. Moreover, a significant incentives package, superseding the 2009 stimulus
package, was published on 19 June 2012. This new package, together with the
free zones regime, remains one of several schemes in need of alignment with
Customs Union rules. The State Aid Authority still needs to establish a formal State
aid inventory and an action plan for aligning all State aid schemes with the acquis.

Conclusion

Limited progress can be reported in this
chapter. Turkey enforced anti-trust and merger rules effectively. However,
recent legal developments raise concerns as to the Competition Authority’s
ability to continue carrying out its operations independently. No progress has
been made in the area of State aid, while a number of existing State aid
practices conflict with Customs Union rules. The State Aid Law remains
ineffective in the absence of implementing legislation. Alignment is advanced
in the area of mergers. In the field of State aid, the country is not yet
sufficiently prepared.

4.9.
Chapter 9: Financial services

There has been
some progress in the areas of banks and financial conglomerates. Basel
II standards have become compulsory for the banking sector as of 1 July 2012.
According to the latest Quantitative Impact Study conducted by the Banking
Regulatory and Supervisory Authority (BRSA), full implementation of Basel II is
expected to result in a 1.5 percentage points decline in the banking sector’s
capital adequacy ratio. Turkey aligned its rules on the secrecy of information
shared by foreign supervisory authorities. This facilitated discussions with
the EU authorities to agree on a new Memorandum of Understanding (MoU) to improve
cooperation. The number of MoUs signed reached 33.

Limited
progress can be reported on insurances and occupational pensions. With
48 insurance companies as members, the out-of-court dispute settlement system
now serves 94% of the sector. No progress can be reported in the establishment
of an independent regulatory authority for the sector. Minimum amounts of cover
in third-party liability insurance for motor vehicles are still low vis-à-vis
the EU.

Turkey enjoys a
high level of alignment with the acquis on financial market
infrastructure.

There has been
limited progress in the areas of securities markets and investment services.
Activities to improve financial literacy continued.
More efforts are needed in the areas of undertakings
for collective investment in transferable securities (UCITS), market abuse and
the investor compensation scheme.

‘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 have become
obligatory for the banking sector. More efforts are needed, particularly in the
areas of securities markets and investment services, and in the insurance
sector. Overall, preparations in the area of financial services are well on
track.

4.10.
Chapter 10: Information society and media

Some progress can be reported in the field
of electronic communications and information and communications technologies
(ICT), while further efforts are needed to bring the legislation
into line with the acquis, in particular regarding the provisions on
market access and interconnection, regulation of retail tariffs, spectrum
management and universal service obligations.

Good progress continued as regards adopting
regulations to improve competition and transparency in the market and
implementing competitive safeguards. The Information and Communication
Technologies Authority (ICTA) has commenced its third round of market analysis.
A communiqué was published in February 2012 to improve the service quality of
internet service providers. Fixed number portability and wholesale line rental
became operational in early 2012. Tariff rebalancing is advanced. There has
been progress on enabling national roaming and access for mobile virtual
network operators, and an implementing regulation on authorisation of broadband
wireless access services operators has been adopted. As for regulation of the
next generation access networks, in October 2011 ICTA excluded fibre from
market analysis for the next five years or until the percentage of fibre-based
subscriptions reaches 25% of all fixed broadband subscriptions. The incumbent’s
reference offer, as approved by ICTA, includes the terms and conditions of
facility sharing, and it has committed to provide wholesale and bitstream
services over its fibre network on a non-discriminatory basis. At the same
time, the fees collected from operators to finance ICTA’s activities are
disproportionately high compared to its expenses, and the surplus funds are
directed to purposes other than covering the costs of regulation.

There are three competing mobile operators
in the country, whereas the fixed telephony and fixed broadband sectors remain
dominated by the incumbent. While the fixed broadband penetration rate per
population increased only very slightly (reaching 10.7% at the end of 2011),
the mobile broadband penetration increased significantly (reaching 6.7%). The
communications taxes imposed on mobile services remain high compared to the
taxes on fixed telephony. Operators also face difficulties in acquiring
rights-of-way to deploy mobile/wireless networks.

No progress can be reported in information
society services. Turkey has not signed the European Convention on the
legal protection of services based on conditional access. The discrepancies
between the law on electronic signature and the EU Directive remain to be
aligned. The draft laws on data protection and e-commerce are still pending.
The law on internet content and providers needs to be brought into line with
international standards protecting freedom of expression. Starting from
November 2011, ICTA imposed an obligation on internet service providers to
offer customers, upon request, a free-of-charge internet filtering service
(with child and family profiles).

Good progress
can be reported in audiovisual policy. A number of implementing
regulations were adopted following the entry into force of the 2011 Supreme
Board of Radio and Television (RTÜK) Law aiming at alignment with the
Audiovisual Media Services Directive. But the Broadcasting Law does not address
the issue of jurisdiction, with RTÜK still having the authority to regulate foreign
broadcasters and failing to align with the definition of European works. Frequency
planning studies for radio frequencies and TV channels continued. The target
date to finalise the frequency tender for digital television multiplex capacity
is set for March 2013. The switch-off date for analogue broadcasting is March
2015. The switchover to digital broadcasting is scheduled for June 2015.

Regarding
broadcasts in languages and dialects other than Turkish, private broadcasters
continued their broadcasts without restrictions on
content, time limits or subtitling/consecutive translation requirements. The
number of broadcasters in languages other than Turkish increased to 25. The
languages used are Kurdish and Arabic. Commercial considerations, technical
difficulties and lack of human resources are the main obstacles to broadcasts
at national level.

In order to ensure transparency of the
Council’s decisions, RTÜK makes them public. Sanctions were issued against
broadcasters for violating the rules on the protection of minors and rules on
commercial communication. Certain decisions of RTÜK continue to raise concerns
as to the broad interpretation of certain legal provisions, especially as
regards obscenity and the principle of the protection of family, national and
moral values. (See section on Freedom of expression)

Conclusion

Progress can be
reported in the area of information society and media. However, alignment with
the EU framework on electronic communications remains limited, in particular on
authorisation and market access. Continued efforts are required for further
alignment of legislation on information society services. The provisions of
internet content that might potentially limit the freedom of expression and a
too broad interpretation of certain legal provisions, especially as regards
sanctions against broadcasters, raise concerns. Preparations in this area are
moderately advanced.

4.11.
Chapter 11: Agriculture

Limited progress can be reported on horizontal
issues. The Ministry of Food, Agriculture and Livestock has significantly
increased the number of staff dealing with EU-related issues, to develop the
relevant administrative capacity necessary to align with the Common
Agricultural Policy (CAP), including in the area of agricultural statistics and
the Farm Accountancy Data Network (FADN). However, legislative alignment with
the CAP remains limited. Turkey continues working on its strategy for
agricultural statistics, which has still to be adopted.

Regarding direct support to producers,
Turkey has not yet prepared a strategy for adjusting its agricultural support
policy to the CAP. The agricultural budget for 2012 represents
a continuation of the recent trend. The overall budget has increased,
including rises in area and headage payments coupled to production, whilst
deficiency payments have fallen. Limited progress has been observed in
preparation of the Integrated Administration and Control System (IACS) despite
some efforts to develop the Land Parcel Identification System (LPIS).

There was some progress on the import ban
on live cattle, beef meat and derivative products,
leading to a significant increase in the volume of EU exports. However, a de
facto ban remains for certain EU Member States. Further efforts need to be made
by Turkey in order to fully implement its bilateral obligations under the trade
agreement for agricultural products.

Regarding common market organisation,
some progress can be reported in the fruit and vegetable sector, with the
adoption of significant legislation regulating producer associations and trade
in wholesale markets. However, no progress has been noted for the other
sectors. Some progress has been observed regarding rural development.
Turkey achieved conferral of management of EU funds under the Instrument for
Pre-Accession Assistance in Rural Development (IPARD) for a further three
provinces, taking the total to 20. The implementation rate is slow and Turkey
set up a plan for improving the absorption of IPARD funds. The IPARD Agency has
recruited an additional 988 personnel for the additional 22 provinces, which
brings the total to more than 1,950 staff. The number of staff of the Managing
Authority has increased but the position of the Authority in the Ministry’s
hierarchy needs to be strengthened to increase its access to decision-makers
and to improve its effectiveness. There is no
progress to report on quality policy and very limited progress on organic
farming, where some implementing legislation was adopted.

‘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

Limited progress has been made on alignment
in the area of agriculture and rural development. The capacities relating to
agricultural statistics and FADN have increased. Implementation of the
pre-accession rural development programme has improved but intensive efforts
are required to ensure adequate absorption of the funds. The de facto import
ban on live cattle, beef meat and derivative products has not been fully lifted
and there remain no strategies in place for the reorientation of agricultural
support, nor for agricultural statistics. Preparations in the area of
agriculture and rural development are not very advanced.

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

Some progress has been
observed on general food safety issues, in particular on alignment with
and implementation of the acquis. A large number of regulations
implementing the framework law on veterinary services, plant health, food and
feed have been put into effect, some of which introduced transitional periods
until their entry into force.

Concerning veterinary
policy, progress has been made on alignment with and implementation of the acquis.
A number of regulations have been adopted in the area of control systems for
imports, which is an important step in the alignment in this area. However, further efforts are needed for full implementation in line
with the acquis. No progress has been observed on achieving the full
functionality of three land and two seaport border
inspection posts (BIPs), as well as the BIP at Sabiha Gokcen Airport in
Istanbul. Veterinary and phytosanitary controls need to be stepped up at the
BIPs.

Turkey made further
efforts on identification and registration of animals and control of their
movements. It has put into force a regulation governing the methods and
principles of work and inspection of live animal traders, a regulation on
internal movements of live animals and animal products, and a regulation
on rules and procedures for the authorisation and inspection of livestock
markets. Efforts continued in the area of identification and registration of
bovines and their movements. However, full functioning of the system in line
with the acquis still needs to be ensured. Implementation of the
identification and registration of ovine and caprine animals has continued and
the regulation concerning identification, registration and monitoring of ovine
and caprine animals has come into force.

Turkey has kept up its
fight against animal diseases. Several implementing regulations on combating
diseases have come into force. The combat against foot-and-mouth disease (FMD)
has continued. Turkey continued an intensive vaccination programme along with
strict animal movement controls between Thrace and Anatolia. However, the
status of an FMD-free zone with vaccination in the Thrace region was
temporarily suspended. An increased number of FMD outbreaks in Anatolia due to
insufficient control of internal animal movements is a matter of serious
concern. Limited steps have been taken as regards transmissible spongiform
encephalopathies (TSEs). A regulation concerning the protection and fight
against TSEs has been adopted, but significant efforts are still needed for
full alignment with and implementation of the acquis in this area.
Turkey continued to notify animal diseases.

A regulation concerning
the animal health requirements applicable to non-commercial movements of pet
animals has entered into force. However, overall progress in this area has
remained limited. Progress has been observed as regards the implementation and
follow-up of the national residue monitoring plan and the control of veterinary
medicinal products. The scope of testing has been extended. A regulation
concerning the measures to be taken to monitor certain materials and their
residues in live animals and animal products has come into force.

(See Chapter 11 —
Agriculture and Rural Development for the de facto import ban on live cattle,
beef meat and derivative products)

Turkey adopted a number
of regulations in the area of zootechnics. Some progress has been made on
alignment with the animal welfare acquis, relating to animal welfare
during transport and on farm. However, further structural and administrative
efforts are required for the full implementation of the acquis in this
area.

Progress has been
observed as regards placing on the market of food, feed and animal
by-products. Turkey carried out intensive training and continued
implementing annual inspection and monitoring programmes. Some progress has
been made in developing a national upgrading plan for agri-food establishments.
The implementation of the new rules for the registration and approval of food
establishments requires significant efforts. In legal terms, progress was also
made on alignment with the hygiene package. However, implementation requires
strengthened administrative capacity, to carry out more effective official
controls, including those for animal products. The recent establishment of a
risk assessment unit, scientific committees and commissions within the
responsible ministry aims to support and strengthen a scientific risk-based
advisory system.

Regarding rules for
animal by-products, a regulation on animal by-products not intended for human
consumption has been adopted. However, further efforts are required to adapt
the sector and achieve full implementation. No progress is observed as regards
funding of checks.

Progress has been made
on food safety rules. Legislative alignment and implementation have
advanced on a range of issues, such as labelling, additives and purity criteria
or flavourings. Further studies are needed in the area of food contact
materials. Alignment in the area of food supplements, food enzymes and novel
food has not yet been completed. Regarding specific rules for feed,
progress has been observed on alignment with the acquis. Regulations on
the placing on the market and use of feed, and on methods of sampling and
analysis for the official control of feed have been brought into force.

Some progress has been
made on alignment with the acquis in phytosanitary policy. A
new regulation on plant quarantine and implementing legislation on certain
harmful organisms have been adopted. A new regulation on the registration and
monitoring of plant protection products (PPPs) used in plant production bans
159 active substances whose use is not allowed in the EU. Implementation of a
plant passport system and registration of the operators has started for all
species. Progress in the area of seed and propagating materials remained very
limited. However, a circular on the implementation of seed imports has created
trade disruptions. Limited progress can be reported on genetically modified
organisms (GMOs). Laboratory capacity in this area has been
improved.

Conclusion

Some progress has been
made in the field of food safety, veterinary and phytosanitary policy. However,
further efforts are required to advance towards full alignment with the acquis.
Significant efforts are needed on upgrading agri-food establishments to EU
standards, control of animal movements, animal health, especially the fight
against foot-and-mouth disease, and animal by-products. Overall, preparations
in this area are at an early stage.

4.13.
Chapter 13: Fisheries

Some progress can be reported in terms of administrative
capacity following the restructuring of the Ministry of Food, Agriculture and
Livestock and the establishment of a separate Directorate-General for Aquaculture and Fisheries. The number of staff has increased and
their internal training has continued. However, there has been no progress on
alignment with the fisheries acquis.

Some progress can be reported as regards resource and
fleet management. A communiqué on support to the fishing vessel owners who
withdraw their vessels from fishing has been published. The functionality and
scope of the Fisheries Information System (FIS) has been further enhanced to
cover registration of recreational fishers, issuing of special fishing permits
and inspection forms, input of biological data collected for anchovy, and
collection of fisheries and aquaculture statistics. This data is shared with EU
scientists in the framework of the Scientific Technical and Economic Committee
for Fisheries Expert’s Working Group for the Black Sea. Implementation of the
action plan on anchovy has progressed. Preparation of national action plans for
fisheries and aquaculture and their effective implementation are crucial for
sound, integrated and sustainable fisheries management. There has been an
improvement in aquaculture production.

One fisheries port office has been built and equipped,
increasing the total number to 41. A Fisheries Communiqué on commercial and
recreational fishing, which lays down the provisions on fisheries prohibitions,
restrictions and obligations, has been published. The communiqué, covering the
period 2012-2016, aims to ensure sustainable exploitation of fishing resources.

There has been some progress in the area of inspection
and control. As regards the fisheries control policy within the context of
the International Commission for the Conservation of Atlantic Tunas (ICCAT),
the cooperation between Turkey and the European Commission has been enhanced
through the Fisheries Dialogue Group. There has been a slight increase in
the number of inspections. However, further efforts are required to ensure
sustainability of the fish stocks. The Fisheries Dialogue Group also discussed the adoption of
common positions in the Framework of the General Fisheries Commission for the
Mediterranean (GFCM).

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

Concerning international agreements, progress has
remained limited. Some recommendations of ICCAT on bluefin tuna (BFT) and
swordfish have been transposed into national legislation and their
implementation is progressing. The number of authorised BFT vessels has been
reduced from 17 to 11. However, additional actions, e.g. to improve monitoring
and ensure sustainability, are needed for full compliance with ICCAT
requirements. Turkey signed bilateral fisheries agreements with Morocco and
Ukraine. Turkey has also become a member of the Central Asian and Caucasus
Regional Fisheries and Aquaculture Commission. As the United Convention on the
Law of the Sea (UNCLOS) provisions are implemented in a number of Community
policies, including the Common Fishery 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 fully implement the acquis relating
to this chapter.

Conclusion

Overall, some progress has been made in the
field of fisheries, not least on administrative capacity, resource and fleet
management, inspection and control, and international agreements.
However, additional efforts are needed on legislative
alignment, structural action, market policy and State aid. Overall, the
alignment in this area is not very advanced.

4.14.
Chapter 14: Transport policy

The Ministry of
Transport was restructured in November 2011 to become the Ministry of Transport,
Maritime Affairs and Telecommunications (MoTMC). The restructuring strengthens
the regulatory character of the Ministry.

There has been
some progress in the area of road transport. A new Directorate-General
for Road Transport Regulation has been established. Preparatory work towards
alignment of driver licences with EU standards is almost finished in view of
adopting a new law. Implementation of the digital tachograph system works
efficiently and is in compliance with the European Agreement concerning the
work of Crews of Vehicles engaged in International Road Transport (AETR).

Regulations on
work and rest periods, driver training and roadside technical checks on
commercial vehicles have been adequately implemented, but institutional and
technical capacities are key issues for ensuring smooth implementation. Concerning
road safety, important efforts have been made to scrap commercial
vehicles manufactured before 1986, almost doubling last year’s amounts.
However, Turkey needs to align with the acquis
on admission criteria for road transport operators and access to the road
haulage market.

There has been
little progress in rail transport. A new
Directorate-General for Railways Regulation (DGRR) has been established. Rail
transport reform still requires the adoption of a more comprehensive railway
law. In particular, regarding the railways reform agenda, important strategic
decisions are pending at ministerial level. The Turkish State Railways (TCDD) did not start cost-based accounting and there is no public
service obligation system in place. The financial situation might also be under
pressure due to lack of monitoring of operational costs and the ambitious high-speed train investment
programme. A safety management system for the TCDD and also national safety
rules are under preparation. A safety authority and an accident investigation
body have not been established yet. Legal alignment
requires further efforts.

No progress can be ascertained concerning inland
waterways transport, although Turkey has commercial operations on the lake
Van and Ataturk dam, and therefore it needs to comply with the relevant acquis.
Turkey is a candidate to join the Belgrade Convention regarding navigation on
the Danube, which would also require Turkey’s acquis compliance.

There is little
progress in combined transport, although a new Directorate-General for Combined
Transport and Dangerous Goods has been established.

In the area of air
transport progress can be reported in aligning with the acquis. A dialogue has been established addressing Turkey’s wish to fully
integrate into the EU aviation system, with a special attention to safety
including participation in the work of the European Aviation Safety Agency
(EASA) and joining the Single European Sky. However, the signature of the horizontal aviation agreement between
the EU and Turkey is still pending.

The Civil
Aviation Authority (DGCA) approved regulations on passenger rights, reservation
systems, continuing airworthiness, oversight at air traffic management,
management system and risk assessment and mitigation by air navigation service
providers, performance based navigation approach operations, and minimum health
requirements of cabin crew. The DGCA has also increased its capacity to cope
with the traffic growth.

It must be recalled
that 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. Currently there are no developments concerning the
exchange of flight data and requirements for the application of a flight
message transfer protocol between air traffic control units. A technical
solution needs to be sought to resolve the safety issues. Air traffic
management is still suffering from a lack of regional cooperation. An
operational solution needs to be found urgently.

Good progress
can be reported in the field of maritime transport. The Undersecretariat
for Maritime Affairs issued regulations on protection and insurance of
hazardous and noxious substances (HNS). Turkey has become a party to numerous
agreements, the most relevant regarding EU legislation being AFS 2001
(International Convention on the Control of Harmful Anti-fouling Systems on
Ships), FAL 1965 (Convention on Facilitation of International Maritime
Traffic), Hong Kong SRC 2009 (International Convention for the Safe and
Environmental Sound Recycling of Ships) and MARPOL Annex VI (International
Convention for the prevention of pollution from ships). Establishment of vessel
traffic management systems (VTMS) for the ports of Kocaeli, Mersin, İzmir and
İskenderun is still ongoing. Emergency response preparedness and handling of
dangerous goods are areas that call for increased attention.

No special acquis alignment is required for satellite
navigation, as regulations will take direct effect upon accession. There is a good level of cooperation with Turkey in the EU
global navigation satellite system programmes.

‘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 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

There is some
progress in alignment of the transport sector. Turkey needs to align to the
recent EU legislative packages in maritime and rail transport. Further efforts
are needed in the areas of human resources and technical capacity to apply the acquis,
especially in the fields of dangerous goods and emergency response
preparedness in maritime transport. The lack of communication between air
traffic control centres in Turkey and the Republic of Cyprus is seriously
compromising air safety. Overall, preparedness in the transport chapter is
moderately advanced.

4.15.
Chapter 15: Energy

Some progress can be reported regarding security
of supply. Turkey and Azerbaijan signed an
intergovernmental agreement on the sale and transit of natural gas through
Turkey to Europe in October 2011. A Memorandum of
Understanding followed in December 2011, establishing a consortium to build and
operate the ‘Trans-Anatolian Pipeline’ (TANAP), which aims to carry 16 billion
cubic metres (bcm) of Azeri gas from the Shah Deniz II field between the
easternmost and westernmost provinces of Turkey. In June 2012 both countries
signed an agreement establishing the rights and
obligations of both parties to implement TANAP. The
Turkish Petroleum Pipeline Corporation (BOTAS) and
China’s Tianchen Engineering (TCC) signed a contract in November 2011 with a
view to building a 1 bcm underground natural gas storage facility in Central
Anatolia. Turkey and the Russian Federation signed a
set of energy agreements in December 2011, including approval of the
construction of the South Stream Natural Gas Pipeline under the Black Sea
through the Turkish economic exclusive zone and the extension of the Russian
West line contract for one additional year.

Studies on and construction of electricity
interconnections with neighbouring countries continued. No development can be
reported on a fair and non-discriminatory rule for gas transit. Instead of
establishing an Oil Stock Agency (as previously planned), a new department
responsible for oil stocks was established within the framework of the General
Directorate of Petroleum Affairs. Turkey has the
potential to play a pivotal role in diversifying resources and routes for oil
and gas transit from neighbouring countries to the EU.

Regarding the internal energy market,
some progress can be reported on electricity. The Turkish Energy Market
Regulatory Authority (EMRA) published implementing regulations to improve
competition and market supervision. An implementing regulation on auditing and
inspection of the electricity generation and distribution companies was
published in October 2011. The regulation on unlicensed generation of
electricity in the electricity market, which is designed to promote investments
by small-scale consumers, was amended and a new communiqué to enhance
investments was published in March 2012. The threshold for eligible consumers
was further reduced to 25,000 kWh for 2012, which corresponds to a theoretical
market opening of 77%. Day-ahead
market operations were initiated in December 2011. The
privatisation of the electricity distribution assets slowed down due to bidders’
payment difficulties, which also caused delays in privatising generation
plants. One of the five
distribution companies was privatised. However, the Privatisation Administration
re-launched tenders for the three distribution companies and a major gas power
generation plant in August 2012.

Limited progress can be reported in the
elimination of cross-subsidies between consumers, in particular on the
wholesale and retail electricity market. Although an automatic, cost-based pricing mechanism for end-users is in place, changes in actual costs are not always reflected in
prices charged to end-users. The
independence and the institutional capacity of the regulatory authority need
strengthening. Further efforts are necessary throughout the sector to align
with the acquis and to ensure effective implementation and enforcement
of the legislation.

There has been
some progress in the gas market. The Ministry of Energy and Natural Resources
(MENR) initiated studies for amending the natural gas market law. EMRA
published an implementing regulation on the selection criteria for underground
gas storages. The eligibility threshold was further reduced to 300,000 m3
for 2012. EMRA’s natural gas consumption forecast for 2012 is 48.5 bcm,
representing a 9% increase compared to 2011. The tendering process for gas
distribution continued and the network was extended to 69 provinces out of 81.
The privatisation tender for the Ankara region continued. EMRA published the
tariff methodology for the tendered distribution regions in December 2011. No
progress can be reported on reducing BOTAS’ monopolistic market share, as the
intended replacement of BOTAS’ terminated contract with the Russian Federation
by private sector companies were unsuccessful and the contracts were prolonged
by a year. EMRA is evaluating the applications for import licences to import by
the private sector of 6 bcm of natural gas, replacing the Russian Federation
contract upon its termination, and 3 bcm of additional gas from Iraq.

Progress can be reported in the area of renewable
energy. The new Directorate-General for Renewable
Energy (YEGM) within the MENR is responsible for renewable energy, energy
efficiency and managing energy information and technology. EMRA published
an implementing regulation identifying measurement
standards for wind and solar licence applications in February 2012 The
regulation concerning the domestic manufacturing of components used at plants
generating electricity from renewable energy resources was amended in July
2012. It specified the minimum domestic content requirements in equipment and
its components needed to obtain the incentives established in the Renewables
Law. The compliance with WTO or Customs Union trade rules of the incentive
mechanism for domestically produced equipment is questionable. EMRA also published two
communiqués to promote the use of renewable fuels produced from domestic
agricultural products as an additive for marketed gasoline and diesel fuels.
However, the share of renewable energy sources in electricity generation
remained slightly lower than in the previous year.

Good progress can be reported in energy
efficiency. An energy efficiency strategy was published in February 2012,
identifying a set of policies and implementing actions to reduce Turkey’s
energy intensity by at least 20% by 2023. The implementing regulation on
improving the efficiency of energy resource use was amended in October 2011,
enhancing incentives for the industry and regulating the authorisation of
energy efficiency consulting companies. The implementing regulation for labelling
and standard product information on the consumption of energy and other
resources by energy-related products was published in December 2011. A set of
new communiqués entered into force on eco-design implementations. Developments
on authorisations for energy efficiency services and energy management
programmes continued. A total of 8,000 energy performance certificates were
issued in 2011.

Uneven progress
can be reported on nuclear safety and radiation protection.
The Turkish Atomic Energy Authority (TAEK) proposed a project to enhance the
effectiveness and efficiency of nuclear regulatory infrastructure, with a view
to improving alignment with the EU nuclear acquis. Turkey signed four
memoranda of understanding with South Korea, Japan, China and Canada for
nuclear cooperation. Turkey has not yet acceded to the ‘Joint Convention on the
Safety of Spent Fuel Management and on the Safety of Radioactive Waste
Management’. No development can be reported on the adoption of a framework
nuclear law, which would ensure a level of nuclear safety in full compliance
with EU standards; existing applicable national legislation mainly covers
protection against ionizing radiation and the licensing of nuclear
installations. Moreover, Turkey has not yet joined the European Community
Urgent Radiological Information Exchange (ECURIE) Agreement. Alignment with the
acquis of the existing regulations based on International Atomic Energy
Agency (IAEA) standards needs to be ascertained. Turkey needs to align as well
with the recent directives on nuclear safety of nuclear installations and on
the responsible and safe management of spent fuel and radioactive waste,

Conclusion

Some progress
can be reported in the energy sector, especially as regards renewable energy
and energy efficiency. Further efforts are needed in the areas of natural gas,
nuclear safety and radiation protection, including responsible and safe
management of spent fuel and radioactive waste. Competition remains limited in
the gas sector. The functioning of the cost-based pricing mechanism in the
electricity market needs to be improved whereas it remains to be established in
the gas markets. The independence and institutional capacity of the regulatory
authority need strengthening. Overall, in the area of energy, Turkey is at a
moderately advanced stage of alignment.

4.16.
Chapter 16: Taxation

No progress can
be reported in the area of indirect taxation. Regarding value-added
tax, Turkey re-introduced the super-reduced rate of 1% on a number of goods
and services. Introduction of the third VAT rate is a regressive move in terms
of alignment of the tax structure with the acquis. There is a need for
further alignment with the acquis, particularly regarding structure,
exemptions, special schemes, and the application of reduced rates.

There has been some progress in the area of
excise duties. In December 2011, Turkey further reduced the Tobacco Fund
levy on imported tobacco, in line with the 2009 Action Plan for eventual
elimination of discriminatory practices in taxation. However, Turkey’s June
2012 amendments to the Excise Tax Law are not fully in line with the acquis,
as there are still discrepancies in terms of the structure of the excise duty
on tobacco and the calculation system to determine taxed amounts. Also, the government
has the possibility to set different specific amounts in respect of certain
characteristics of the tobacco or its packaging that could be discriminatory
and therefore non-compliant.

Concerning the
taxation of alcoholic beverages, no progress can be reported. The excise duties
remain higher for imported products than for comparable domestic ones. In fact,
Turkey has taken measures that run counter to the excise duty provisions of the
2009 Action Plan.

Gradual
elimination of discriminatory practices in taxation in line with the Action
Plan is the key to further progress under this chapter.

Structural
discrepancies continue to exist between Turkish excise duty legislation and the
acquis. Further efforts are necessary for alignment in this respect.
Turkey needs to introduce a duty-suspension regime for domestic movements and
fiscal warehouses prior to membership.

There is no progress to be reported in the
area of direct taxation.

There has been
good progress in the field of administrative cooperation and mutual
assistance. A regulation in October 2011 set out the operational structure
of the Tax Inspectors Board. The merger of the tax audit functions within the
Ministry of Finance is a positive step for ensuring consistency in tax audit
planning and practices.

In the field of operational capacity and
computerisation, good progress can be reported. The Revenue Administration
continued to reinforce the taxpayer services so as to enhance voluntary
compliance. In line with the Action Plan for Combating the Unregistered Economy
in Turkey, electronic registration of taxpayers started in April 2012. The
Revenue Administration carried out a self-assessment, which will guide the
administration in introducing a quality management system in its operations and
relations with taxpayers.

Conclusion

There has been
limited progress on legislative alignment under this chapter, especially on
eliminating discriminatory practices in the taxation of tobacco and on
administrative cooperation and operational capacity. However, discrepancies
with the acquis continue to exist. Further efforts are needed regarding
excise duties on spirits to comply with the Action Plan in reducing the
differentials between imported and domestic products. Gradual elimination of
discriminatory practices is the key to further progress. No progress can be
reported on direct taxation. Overall alignment in this chapter is moderately
advanced.

4.17.
Chapter 17: Economic and monetary policy

Some progress
can be reported on monetary policy. Turkey’s level of alignment is
advanced, although incomplete. The Central Bank missed the inflation target of
5.5% by a wide margin, as consumer price inflation climbed to 10.45% by the end
of 2011. The Central Bank actively used a wide range of policy instruments such
as the interest rate corridor, reserve requirements and foreign currency
auctions and interventions. Portfolio outflows and excessive depreciation of
the lira led the Central Bank to widen the interest rate corridor, reduce
reserve requirements and sell foreign currency, calming the markets in due
course.

The inflation
target is jointly decided by the Central Bank and the government. The statute
of the Central Bank does not fully ensure its independence. Provisions on the
investor protection fund and discriminatory withholding tax rates applicable to
public and private sector debt instruments are not in line with the principle
of the prohibition of privileged access by the public sector to financial
institutions.

There has been
some progress on economic policy. The Medium Term Programme 2012–2014
focuses on fiscal discipline and reducing Turkey’s large current account
deficit. In January 2012 Turkey submitted its 2012 Pre-Accession Economic
Programme, which is supported by a sufficiently
comprehensive and broadly consistent macroeconomic framework. However, it is
somewhat optimistic, in particular with respect to the balance-of-payments and
inflation scenarios. The
programme’s structural and institutional reform agenda covers a broad range of
issues, but is fragmented and insufficiently linked to the fiscal scenario, and
only partly aligned with the reform requirements in view of the country’s EU
accession perspective. The capacity for economic policy
formulation and coordination is adequate. In the area of economic policy,
Turkey’s overall level of preparedness is advanced.

Conclusion

There has been
some progress on economic and monetary policy. The Central Bank actively
employed different instruments to ensure price and financial stability, albeit
with mixed results. Alignment with the acquis remains incomplete,
particularly regarding the full independence of the Central Bank and the
prohibition of privileged access of the public sector to financial
institutions. The capacity for economic policy formulation and coordination is
adequate. Overall, Turkey’s level of preparedness is advanced.

4.18.
Chapter 18: Statistics

Good progress
can be reported on statistical infrastructure. TurkStat published the
Official Statistics Programme for the period 2012–2016 and has embarked on a process
of streamlining statistical production in line with the ESS vision. Based on
recommendations from the peer review of May 2011 TurkStat developed
instructions for access to micro-data, which is an important step towards
better usability of statistical information. The government overhauled the
institutional structure of TurkStat, which included establishing 500 new posts
at the operational level, with a view to strengthening institutional capacity.
Preparations in this area are already well advanced.

There has been
progress in classifications and registers.
TurkStat finalised the adaptation work for all classifications and published
data according to the new NACE rev2. A detailed description for setting up the
farm register and the methodology and organisational set-up for the collection
of agriculture statistics is missing. Preparations in this area are advanced.

Good progress
has been made on sectoral statistics. Studies on the revision of
national accounts on the new base year and implementation studies for ESA2010
continued. Joint studies with the Ministry of Finance on excessive deficit
procedure notification tables and government finance tables, and with the
Central Bank and the Treasury on government securities flows were completed.
TurkStat signed a protocol with stakeholders to improve agricultural statistics
on crops. TurkStat carried out a population and housing census in 2011 using
for the first time a combination of register based and survey data thus
applying modern ways of data collection reducing burden on respondents. Initial
results from the census have been published in January 2012 very soon after the
census. Turkey still needs to submit key national account indicators together with documentation
on the methodology used. Preparations in this area are moderately advanced.

Conclusion

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

4.19.
Chapter 19: Social policy and employment

There has been no progress in alignment
with the acquis in the field of labour law. In general, the high
prevalence of undeclared work, particularly in small enterprises and in
agriculture, continues to impede the effective application of the labour
legislation in place.

The recruitment of staff to increase the
administrative capacity of the Ministry of Labour and Social Security (MoLSS)
has continued. The Ministry has also taken steps to combat child labour (See
also Political Criteria).

In terms of legislative developments, there
has been good progress in the field of health and safety at work. In
June 2012 the Parliament approved legislation aiming to align with the EU
Framework Directive on health and safety at work. However, the enforcement of
the legislation remains a key challenge. Despite some capacity building
efforts, the lack of engagement of social partners, the lack of awareness of
employees and the negligence of employers result in poor health and safety
conditions, particularly in the informal sector. The number and capacity of
inspectors covering health and safety issues need to be stepped up. The
official statistics, which do not take into account the informal sector, reveal
that there were 62,903 occupational accidents in 2010, marginally less than in
the previous year. Those in the construction sector score the highest in terms
of fatal accidents and the total number of fatal accidents is well above the EU
average. The data collection system for occupational accidents and diseases
needs to become fully operational. Training and guidance activities targeting
SMEs need to be intensified and expanded to all risky sectors nationwide.

There has been limited progress in the area
of social dialogue. A new law on trade unions in the civil service was
adopted in April 2012, leading to the first collective bargaining exercise in
this sector. The final decision was taken through mandatory arbitration amid
strong criticism of the public servants’ trade union confederations. The law
falls short of meeting EU and ILO standards.

The law on collective labour relations
regulating the private sector is still pending parliamentary approval. High
thresholds for entering into collective bargaining continue to significantly
restrict the possibility of collective agreements and consequently impede the
full exercise of the right to bargain collectively. Moreover, the lack of
release of data on the number of workers in each sector by the authorities has
prevented the conclusion of any new collective agreements for several months.
Turkey excessively restricts the right to strike. In May 2012 the government
adopted a law excluding also workers in the civil aviation sector from the
right to strike. Following their protest against losing this fundamental right
more than 300 airline workers were fired. Increasing the number of activities
in which workers are deprived of this right takes Turkey a further step away
from respecting full trade union rights in line with EU and ILO standards.
Turkey also excessively restricts the right to establish or join trade unions
as they cannot be set up along professional categories or in certain sectors,
for example for civilian staff working for the Ministry of Defence.

As a result of the restrictive legislative
provisions and difficulties in exercising trade union rights, the level of
unionisation and the coverage of collective agreements remain very low,
estimated at 8% of the registered waged workers. The Turkish Economic and Social
Council has not convened since 2009.

There has been some progress on employment
policy. The unemployment rate declined to 9% in 2011, and is in a downward
trend following the vigorous recovery from the global crisis. Youth
unemployment has fallen significantly over the past year, whereas the quality
of employment still continues to be an issue. Overall employment and labour
force participation have increased. However, regional disparities persist with
regard to employment and participation rates, to the disadvantage of the
southeast region. Women’s low participation rate (28.8% in 2011), with marginal
increases over the years, is still a concern.

ISKUR, Turkey’s Public Employment Service,
has continued to improve its staffing levels, particularly through recruiting
job counsellors to provide individualised public employment services. In 2011,
about 16% of the registered unemployed participated in activation measures.
However, there are concerns that services are not reaching the most vulnerable
groups. The limited coverage of and restrictive eligibility conditions for
unemployment insurance remain to be addressed. (See also Economic criteria)

Turkey has adopted a second Action Plan to Fight the Informal Economy (2011–2013). The Social
Security Institution increased its efforts to promote registered employment and
to identify undeclared work through various means. The
ratio of undeclared workers to the total of all employed as measured by the
Turkish Statistical Institute decreased by 3.3%, but it is still close to 40%.
Monitoring and evaluation of the impacts of strategic measures is weak.

There is a need to provide independent
evaluations on labour market policies, as well as on mechanisms such as the
unemployment insurance and the wage guarantee fund. Policy debate between the
EU and Turkey on employment policies has continued but needs to be more clearly
structured and further enhanced.

Some progress
can be reported as regards preparations for the European Social Fund (ESF).
The MoLSS, the Operating Structure responsible for the management of the IPA
Human Resources Development Operational Programme, has been accredited for tendering,
contracting and financial management of relevant EU-funded operations. In 2011,
no funds were lost through the automatic de-commitment rule. However,
establishing an operations pipeline remains a challenge, increasing the risk of
non-absorption of funds for the future. A more effective and sustainable
monitoring and evaluation system needs to be established. Evaluation of completed
operations in the fields of employment and education needs particular
attention, taking into account the programme level indicators.

There has been
little progress in the field of social inclusion. Efforts by the
Ministry of Family and Social Policies to provide more efficient social
services under a single roof have continued. However, a clear policy framework
for social assistance and poverty alleviation has not yet emerged. The
population continues to be exposed to a high risk of poverty, especially the
rural population and children. In-work poverty also remains problematic. The
linkages between social services and the public employment service need to be
strengthened. The protocol of cooperation signed between relevant ministries is
a positive step in this direction. Home-based care services for the disabled
and the elderly are expanding. Increasing the employability of people with
disabilities remains a challenge. Capacity to shape, implement, monitor and
evaluate policies, including targeted policies to reach the most vulnerable,
needs to improve. Policy debate between the EU and Turkey on social inclusion
and social protection policies has continued but needs to be more clearly structured and further
enhanced.

There has been
some progress in the field of social protection. The number of people
actively insured rose by more than 9% between May 2011 and May 2012. The
coverage of the social security system rose from 84% to 86% in the same period.
The mandatory General Health Insurance System fully entered
into force as of January 2012. The new system extends the coverage of health
insurance to the whole population, with contributions to be paid by the
individual or the state, based on results of a means test. The ‘green card’
system, which was meant to cover citizens in poverty but prompted debates
concerning fair distribution, is consequently abolished. However, the social security system has reported increasing deficits due,
largely, to increased health expenditures. Efforts to register undeclared workers,
to prevent under-declaration of salaries, and to boost the efficiency of the
system, including through active ageing policies, need to be stepped up in
order to tackle the deficit of the pension system. In general, Turkey achieved
progress on the adequacy and sustainability of health insurance. Efforts should
continue in this area and they need to be stepped up for the other pillars of
social protection.

No progress can be reported with regard to
anti-discrimination. The draft legislation does not address all grounds of
discrimination covered by the acquis.

There has been little progress in the field
of equal opportunities between women and men. The Turkish labour law is
not applicable to situations prior to the labour contract, increasing the risk
of discrimination during recruitment, coupled with the lack of a complaint
mechanism. There is a remarkable difference between the figures for men and
women with regard to employment as an unpaid family worker, which is mostly
prevalent in the agriculture sector. The female employment target in the draft
national employment strategy (35%) is less than ambitious. Measures on
improving the work-life balance are not fully in place, and the existing ones
mainly focus on women rather than a gender mainstreaming approach. Full
enforcement of the principle of equal pay for equal value of work needs to be
stepped up, also in those sectors not covered by the labour law. The gender gap
in trade union activity and in economic and political decision-making persists.
More efforts are needed to combat honour killings, domestic violence and forced
marriages. A full gender mainstreaming approach in policy and law-making has
yet to be developed across the public administration. The equality body
required by the acquis has not been created. Preparations in this area
are at an early stage.

Conclusion

Some progress, albeit uneven, has been
achieved in the field of social policy and employment. Administrative capacity
improved, social security coverage was extended and new legislation on health
and safety at work and trade union legislation for public servants was adopted.
However, trade union rights for workers and public servants still fall short of
meeting the EU and ILO standards. Further efforts are needed to put in place a
clear policy framework on poverty reduction, reduce labour market segmentation,
combat undeclared work and increase employment rates of women and people with
disabilities. Overall, legal alignment is moderately advanced.

4.20.
Chapter 20: Enterprise and industrial policy

Turkey made some progress with regard to enterprise
and industrial policy principles. An Industrial Strategy and Action Plan
(2011-2014) was adopted in 2011, thus meeting the key requirement for alignment
in this area. Turkey reported an 85% success rate in implementing the actions
planned in the strategy for the first year. This rate is based on the
completion of activities but no impact assessment has so far been carried out.

In August 2012, the Coordination Council
for Improvement of the Investment Environment (YOIKK) issued an Action Plan for
2012-2013. Turkey continued implementing the SME Strategy and Action Plan
approved for 2011-2013. A large number of regulations were adopted in April
2012 in order to cut red tape in business start-ups. An amending law on land
registry, published in May 2012, abolished the country-based reciprocity
principle for natural persons. The list of eligible countries whose citizens
can purchase real estate in Turkey remains to be decided by the government.
After revisions, the draft Turkish Commercial Code entered into force on 1 July
2012. Turkey completed the assessment process for the Small Business Act
together with the Western Balkans and the EU, with successful results
particularly on small entrepreneurship and responsive administration. In order to promote entrepreneurship
culture in society, Turkey established an Entrepreneurship Council consisting
of business NGOs and Ministries.

Some progress was made with respect to enterprise
and industrial policy instruments. In order to facilitate SMEs’ access to
finance, the capital structure of the Guarantee Fund Corporation was improved
and its branches expanded. The number of technology development zones increased
to 43 in 2011, of which 32 are currently operational. These zones host a total
of 1,730 companies with more than a thousand new R&D projects carried out
in 2011. However, no new patent registration has been facilitated within these
zones. The Ministry of Science, Industry and Technology continued its Industrial
thesis (SAN-TEZ) and Techno-initiative capital support programmes. The
Scientific and Technological Research Council of Turkey (TÜBİTAK) is now
affiliated to the Ministry of Science, Industry and Technology and is expected
to further bridge the gap between scientific research and industrial
development. Turkey provided support totalling € 153 million to Turkish
enterprises in 2011 and 2012 for R&D and innovation projects. The Supreme
Council on Science and Technology issued 8 new decrees in December 2011 setting
targets and priorities for the national innovation system, the development of
innovation and R&D tools for entrepreneurs, the integration of
entrepreneurial training into the whole education system starting from basic
education, supporting the start-up of R&D-intensive companies and
increasing national patent applications.

KOSGEB, the SME Development Organisation,
continued supporting Turkish SMEs under five different programmes according to
a project-based approach. KOSGEB disbursed a total of about € 80 million
in 2011 for these programmes, excluding
interest-rate subsidy operations. Its budget has been considerably increased
for 2012 so that it can have a greater outreach. In addition, Turkey continued
providing loan programmes for SMEs via various banks with interest rate subsidy
support from KOSGEB and via Halkbank. The total portfolio disbursed in 2011
under these loan programmes was about € 8.8 billion. Turkey continued to
participate in the EU Entrepreneurship and Innovation Programme and is an
active member of the Enterprise Europe Network. Turkey won a prize at the
Enterprise Europe Award with a project on promoting the entrepreneurial spirit.
Turkey performs well by developing measures to promote opportunities for SMEs
in the framework of the Competitiveness and Innovation programme.

Some progress has been made in sector
policies. The Ministry of Science, Industry and Technology adopted sector
strategies on chemicals, ceramics, iron and steel and non-ferrous metals. Turkey adopted an Export Strategy and
Action Plan in June 2012.

Conclusion

Turkey has made progress in the area of
enterprise and industrial policy principles and instruments and in the adoption
of sectoral strategies. Turkey has a sufficient level of alignment in this
area.

4.21.
Chapter 21: Trans European Networks

There has been some progress in the area of
transport networks. The Trans-European Transport Network (TEN-T) in
Turkey has been defined according to the new TEN-T rules and was included in
the revised EC proposal on TEN-T guidelines. Furthermore, priority projects and
data on infrastructure have been included in the TENtec information system
TEN-T guidelines.

Some progress
can be noted in the area of energy networks. In gas, negotiations
between the Nabucco Company and the Azeri Shah Deniz II Consortium continued
for the Nabucco West project, while technical work on the Poseidon gas pipeline
linking the Turkey-Greece gas pipeline to Italy was also in progress. In June
2012 the Turkish and Azerbaijani partners signed a contract to set up a project
company to build the Trans-Anatolian natural gas pipeline (TANAP). Subsequently
an intergovernmental agreement was signed by the authorities from both
countries, followed by a contract between TANAP Co and the Turkish government
on the rights and obligations of the parties to implement the project. These agreements provide the project
company with the legal basis to build the pipeline.

As regards electricity networks, links are
in operation with Bulgaria, Greece, Syria, Iran, Azerbaijan and Georgia. Two
new 400 kV transmission lines between Turkey and Georgia and between Turkey and
Iran are under construction. Additional new lines between Turkey and Georgia,
Iran, Syria and Iraq are in the planning phase. Preparations for Turkey’s
synchronisation with the European Network of Transmission System Operators for
Electricity (ENTSO-E)’s Continental European Synchronous Area are at an
advanced stage, targeting completion in autumn 2012.

Conclusion

Turkey has made
some progress in the area of trans-European networks. Some progress can be
reported on transport and electricity energy networks. However, continued
efforts are needed for gas interconnections and the implementation of the
Southern Gas Corridor. Overall, the alignment is advanced in this area.

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

Some progress was made with regard to the legislative
framework. As part of the general
reorganisation of the public administration, several
by-laws were adopted on restructuring the Ministry of Transport (MoT), the
Ministry of Environment and Forestry (MoEF), the Ministry of Industry and Trade
(MoIT) and the Ministry of Labour and Social Security (MoLSS). These by-laws provide the legal basis for establishing the units for
coordination and programming, budgeting, tendering, contracting, execution,
financial management and supervision of EU co-funded project activities.
Following this restructuring the Prime Minister’s circular on IPA coordination
was amended accordingly.

Some progress was made with regard to
strengthening the institutional framework. The restructuring of the public administration
also had an effect on several of the Operating Structures (OSs). In the case of
MoEF and MoIT, as a result of
restructuring, the responsibilities of the Operating Structure were taken over
by the newly established ministries: the Ministry of Environment and
Urbanisation (MoEU) and the Ministry of Science, Industry and Technology
(MoSIT) respectively. Following the restructuring, the National Authorising
Officer and the Audit Authority provided confirmation that the accreditation
criteria for proper functioning of the management and control system were still
fulfilled.

Some progress was made as regards administrative
capacity in all IPA institutions responsible for the IPA Regional
Development and Human Resources Development components (IPA Components III and
IV respectively). During the restructuring of the public administration, a
by-law concerning improvement of the remuneration system for the staff employed in IPA projects was adopted.

In January and February 2012, MoLSS and
MoSIT respectively qualified through a Commission decision for taking over
procurement and contracting functions from the Central Finance and Contact Unit
(CFCU) for the Human Resources Development Operational Programme (HRDOP) and
for the Regional Competitiveness Operational Programme (RCOP). Preparations at
the Ministry of Transport, Maritime Affairs and Communication for taking over
procurement and contracting functions were also speeded up for the Operating
Structure in the area of Transport under IPA Component III.

Training and the
provision of technical assistance to strengthen all institutions involved in
the implementation of IPA has continued. Further increasing the institutional capacity of the Operating
Structures is necessary to ensure better quality and better performance of
supported interventions as well as speedier implementation.

With regard to programming and
programme implementation, some progress was made in the
identification, preparation and appraisal of projects under IPA Components III and IV. A pipeline
of quality and mature projects has been presented in the transport and the
environment sector under IPA Component III. Some progress was made in the preparation of tender documents,
publication of tenders and contracting; however, risks for the absorption of
funds remain.

The preparations continued on the National Strategy for Regional Development (NSRD), which aims to
create a general framework and guidance for the regional and local plans and
strategies. The Regional Plans
have been prepared for all 26 NUTS II regions under the coordination of all
Development Agencies.

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 Monitoring Information System has been
further developed and is now partly operational. The Sectoral Monitoring
Committees of IPA Components II, III and IV have continued to meet as
scheduled. A number of interim evaluations were carried out in 2011. However,
evaluation capacity needs to be further strengthened within IPA bodies, among
other things to ensure that evaluations ultimately serve both accountability
and programme management purposes.

In the area of financial management,
control and audit, some progress was made. The
Central Finance and Contract Unit (CFCU) has delivered training in the area of
rejection rate tracking and reporting, and shared its methodology with the
ministries designated as Operating Structures for IPA Components III and IV. A by-law was adopted in 2011
which ensures that the Audit Authority also has a legal basis for auditing
EU-funded projects in particular in line with the Framework Agreement and
Financing Agreements and with the international audit standards. However,
implementation of the action plan addressing the weaknesses in the management and control systems
needs to be more effective.

Conclusion

Some progress was made in the field of
regional policy and coordination of structural instruments. Although the
institutional framework for implementing IPA Regional
Development and Human Resources Development components
has been strengthened and the Operating Structures for the Regional
Competitiveness, Environment and Human Resources Development Operational
Programmes have obtained accreditation for the tendering, contracting and
financial management functions, there is still a need for further strengthening
of the administrative capacity of the IPA institutions in order to speed up the
programme implementation process, improve its quality and avoid loss of funds.
Preparations in this area are not very advanced.

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

Some progress has been made in the reform
of the judiciary. The 2009 Judicial Reform Strategy, whose objectives
were achieved to a large degree, is being revised. It is expected to focus on
efforts to speed up judicial procedures, further reform of the military justice
system, alternative dispute resolution, disadvantaged groups, and international
relations in judiciary matters with the emphasis on the case law of the
European Court of Human Rights and related training. The review of the strategy
was carried out with the participation of all stakeholders, the Turkish legal
community and civil society.

As regards the independence of the
judiciary, the High Council of Judges and Prosecutors published 34 circulars
related to the work of judges and prosecutors and organised in-service training
and meetings with stakeholders, encouraging their participation in discussions
and workshops on the judiciary as a whole.

However, criticisms of the legislation on
the High Council of Judges and Prosecutors referred to in last year’s progress
report, e.g. the role given to the Minister of Justice, have not been
addressed. There was concern that decisions to suspend prosecutors in the Deniz
Feneri case reflected pressure from the executive. The polarised political
atmosphere was reflected in opposition accusations that the government was
controlling the judiciary.

With regard to impartiality, the
individual application procedure introduced by the 2010 constitutional amendments
and the Law on the Constitutional Court of 2011 enter into force in September
2012. The Ministry of Justice is drafting a Human Rights Action Plan. A draft
law providing for the establishment of a commission on long trials is on
parliament’s agenda.

Criticisms of the legislation on the
Constitutional Court referred to in last year’s progress report have not been
addressed. Prosecutors do not have their offices in parts of courthouses
separate from judges, they are not required to enter and leave the courtroom by
a different entrance from judges and in court they do not sit at the same level
as lawyers. This continues to cloud perceptions of the impartiality of judges.

With regard to the efficiency of the
judiciary, amendments to the Laws on the Court of Cassation and the Council of
State aiming at tackling their backlog of cases started to generate positive
results. Legislation adopted on speeding up judicial services resulted in
improvements at first-instance courts’ level, as well. A third judicial reform
package was adopted in July. It includes amendments to a number of laws and
aims to speed up judicial procedures further.

However, the Ministry and the High Council
have yet to develop benchmarks to monitor and assess the performance of the
courts, the length of court proceedings and the efficiency and effectiveness of
the judicial system. Further efforts are needed to comply with ECtHR case-law
on access to a lawyer and to improve the system of legal aid.

The Regulation on the Judicial Police adopted
in 2005 under Article 167 of the Criminal Procedure Code has not been
implemented according to European standards so there are no judicial police
units attached to prosecution offices. Prosecutors rely on police units working
for the Ministry of the Interior and have yet to develop their capacity to
guide police investigations effectively and keep strict control over police
activity.

The third judicial reform package relates
also to the Turkish criminal justice system. Overall, it includes steps in the
right direction of guaranteeing procedural rights. However, it neither
sufficiently revises problematic areas related to the administration of justice
and protection of fundamental rights nor does it address issues related to
definitions of criminal offences in the law.

In practice, concerns have been expressed
as regards the criminal justice system and, in particular, the Serious Crimes
Courts. These focused on the defence’s limited access to the prosecution file,
on decisions to arrest or continue to detain suspects, and on the length of
pre-trial detention. Alternatives to pre-trial detention are not sufficiently
applied. Turkey lacks an effective domestic remedy to ensure that applicants
are heard and to offer them the opportunity to challenge the lawfulness of
their pre-trial detention with reasonable prospects of success. There have been
concerns over the quality of the indictments and of the indictment process.
Leaks of information, evidence and statements continued to give rise to
concerns. In some cases there have been concerns that cross-examination in
criminal trials is not carried out properly. Judges and prosecutors have been
given no training in cross-examination.

The regional courts of appeal which, by
law, should have been in operation by June 2007 have not been established yet.

Limited progress was made on anti-corruption
policy, with some developments on incrimination and improved transparency
in the financing of political parties. The third judicial reform package
includes amendments to provisions on corruption in the Criminal Code,
redefining and extending the scope of bribery as an offence, in line with
recommendations by the Group of States against Corruption (GRECO). The Law on
Presidential Elections of January introduced strict rules on the transparency
of election financing for presidential candidates. A 2011 amendment reinforced
capacity for auditing political financing.

However, legal loopholes related to the
financing of politics continued to be a concern. The auditing of political parties
remained weak and there was no legal framework for auditing election campaigns
or the financing of individual candidates other than in the case of
presidential elections. There were not enough checks on assets declared by
political figures and public officials. No progress was made on limiting the
immunity of Members of Parliament and senior public officials in
corruption-related offences. GRECO recommendations are yet to be fully
implemented. The implementation of the National Anti-Corruption Strategy
requires greater political engagement and broader civil society participation.
A track record of investigation, indictment and conviction related to
corruption cases has not yet been established.

There has been
very limited progress as regards fundamental rights.

The establishment of an
Ombudsman institution is an important step in
safeguarding the rights of citizens and ensuring accountability of the public
administration. A law establishing the Turkish
National Human Rights Institution was adopted by parliament. The law does not
comply fully with the UN Paris principles on human rights institutions, in
particular as regards the independence of the proposed body. It was not
discussed with stakeholders, nor does it in any way reflect the concerns and proposals
of national and international experts. Some progress was made on the
observance of international human rights law, notably through the efforts of
the Ministry of Justice and the parliament’s Human Rights Inquiry Committee. A
number of reforms to strengthen human rights structures are still awaited.

As regards prevention
of torture and ill-treatment, despite the
positive downward trend in reports of torture and ill-treatment in places of
detention, law enforcement officers continued
to resort to force and, particularly in unofficial places of detention, this is
cause for concern. There was little progress on tackling impunity.
Mass graves discovered in the south-east have not been adequately investigated.
There is a significant backlog of judicial proceedings concerning allegations
of excessive force or procedural errors, with priority seemingly given to
counter-allegations lodged by the security forces.

The overcrowding of prisons remains
problematic, with a serious impact on sanitation and
other physical conditions. An overhaul of the complaints system in prisons is
overdue. Medical treatment and the conditions in which juveniles are held
require special efforts.

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

An increase in
violations of freedom of expression has given rise to serious concerns,
and freedom of the media continued to be further restricted in practice. The
legal framework, especially as regards organised crime and terrorism, and its
interpretation by the courts leads to abuses. Together with pressure on the
press by state officials and the laying off of critical journalists this has
led to widespread self-censorship. Frequent website bans are cause for serious
concern and there is a need to revise the law on the internet.

Little progress
was made on freedom of assembly and freedom of association. Where demonstrations
took place without official consent there were cases of violence and
disproportionate use of force by the security forces, especially where the
demonstrations related to the Kurdish issue. There is a need to revise the law
on demonstrations and meetings. There is also a need to revise legislation on
fundraising for civil society organisations to help strengthen civil society.
Legislation on civil servants’ trade unions and collective bargaining was
amended. However, the new legislation is not fully in line with EU standards
and International Labour Organisation conventions, especially with regard to
collective bargaining, dispute settlement, and the right to strike, in relation
to public servants. There is no sustainable mechanism for the participation of
civil society in policy making. There were no developments regarding
legislation on political parties.

Limited progress was made
on freedom of thought, conscience and religion. There has been some
progress on conscientious objection in terms of applying the case law of the
European Court of Human Rights. Dialogue with the non-Muslim religious
communities continued. However, members of minority religions and indeed those
of no faith were subject to threats from extremists. A legal framework in line
with the European Convention on Human Rights has yet to be established, so that
all non-Muslim religious communities and the Alevi community can function
without undue constraints.

Some progress was made on women’s rights
and gender equality. The Law on the Protection of Family and
Prevention of Violence against Women is an improvement on previous legislation,
protecting family members and those in relationships outside marriage from
violence. The procedures for urgent cases are particularly positive, as was the
inclusive consultation exercise undertaken by the authorities with civil
society, even if non-governmental organisations are critical of certain
last-minute amendments to the text. However, substantial efforts are needed to
turn this new law, and earlier legislation, into political, social and economic
reality. The law needs to be consistently applied across the country. There is
a need for greater involvement of and participation by women in employment,
policy-making and politics. Girls’ school enrolment and drop-out rates need to
be monitored. The issue of early and forced marriages remains a concern.

With respect to children’s rights,
efforts are needed in all areas, including education, combating child labour,
health, administrative capacity and coordination. In general, more preventive and
rehabilitative measures need to be taken for juveniles. Detained children are
not held in appropriate conditions and additional juvenile courts need to be
created in line with the legislation in force.

Little progress was made as regards the socially
vulnerable and/or persons with disabilities. Implementation of the Strategy
Paper on Accessibility and the National Action Plan was limited. Home-based
care services for the disabled and the elderly were expanded. A protocol was
signed to promote entrepreneurship for people with disabilities. Efforts to
increase employment in the public sector continued. However, a national
monitoring mechanism to implement the UN Convention on the Rights of Disabled
Persons and the corresponding optional protocol is still not in place. The
principle of positive discrimination for the disabled is not properly reflected
in policy measures. In practice, the employability of persons with disabilities
both in public and private sectors needs to be further promoted. Official and reliable
data and research on persons with disabilities and mentally ill persons is
lacking, which is a barrier to informed policy-making. Difficulties in access
to education, health, social and public services by persons with disabilities
continued. Physical barriers to access are widespread. There is still no
independent body to monitor and inspect mental health institutions.

No progress has been made on anti-discrimination
policies. Comprehensive anti-discrimination legislation has not been
adopted. The current legal framework has not been harmonised with the EU acquis.
LGBT persons continued to suffer discrimination and intimidation and often lost
their jobs or were the victims of violent crime. A number of court cases and
judicial proceedings are in progress. The BDP’s draft
proposal to eliminate discrimination and regulate the headscarf issue was
rejected in the TGNA.

There has been progress on property
rights, with the adoption of legislation amending the 2008 Law on
Foundations. Implementation continues. However, the current legislation still
does not cover fused foundations or properties confiscated from Alevi
foundations. Council of Europe Resolution 1625 (2008)
on Gökçeada (Imvros) and Bozcaada (Tenedos) still needs to be implemented. The
ongoing cases against the Mor Gabriel Syriac Orthodox monastery give rise to
concerns. Turkey needs to ensure that the property rights of all non-Muslim
religious communities and others are fully respected.

As regards respect for and protection of
minorities and cultural rights, Turkey has made some progress on rights of
persons belonging to minorities, especially regarding the restitution of some
of the properties of non-Muslim minorities. Although for the first time
representatives of minority groups, not limited to those minorities recognised
by the Lausanne Treaty, were invited to parliament to express their views on a
new constitution, 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. As regards cultural rights, restrictions remain on the
use of languages other than Turkish in political life, in contacts with public
services and in prisons. The legal framework for the use of languages other
than Turkish is open to restrictive interpretation and any flexibility allowed
is inconsistently applied. A comprehensive policy to address the situation of
the Roma is needed. There is a need for revision of existing legislation and
the establishment of protection mechanisms or specific bodies to combat racism,
xenophobia, anti-Semitism and intolerance. There is a specific need for
legislation to tackle hate speech and hate crimes.

With regard to respect for private and
family life and, in particular, the right to protection of personal data,
Turkey needs to align its legislation with the data protection acquis
and 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). The absence of data protection legislation hampers operational
cooperation between police and judicial authorities and on counter-terrorism.

Conclusion

Overall, some progress has been made in the
area of the judiciary following the adoption of the third judicial reform
package, which introduces a number of improvements into the Turkish criminal
justice system. However, the reforms failed to address core shortcomings.
Further efforts are needed with regard to the independence, impartiality and
efficiency of the judiciary, including the criminal justice system and the
large backlog of serious criminal cases. The participation rate of women in the
judiciary needs to be improved. Limited progress was made on anti-corruption,
with some developments on incriminations and transparency in the financing of
political parties. The implementation of the National Anti-Corruption Strategy
requires greater political engagement. As regards fundamental rights, laws
establishing an ombudsman institution and a national human rights institution
were adopted. The situation regarding the respect for
fundamental rights continues to be the source of serious preoccupation, notably
stemming from the wide application of the legal framework on terrorism and
organised crime, which leads to recurring infringements of the right to liberty
and security, of the right to a fair trial and of the freedom of expression,
assembly and association.

4.24.
Chapter 24: Justice, freedom and security

Limited progress can be reported in the
area of migration. The Law on Foreigners and International Protection
was submitted to the parliament in May 2012 but still needs to be adopted. Its
adoption is key to providing a single, coherent legislative framework governing
Turkey’s relations with foreigners and safeguarding the rights of migrants and
refugees in line with EU and international standards.

In 2011, 217,206 persons were granted in
Turkey a residence permit on various grounds, including work and education.
Turkey continued to be a very important transit and destination country for
irregular migration. In 2011, the number of irregular migrants apprehended in
Turkey reached 44,415, an increase of 26% on the 2010 figures. The number of
apprehended irregular migrants amounted to 14,559 between 1 January and 1 July
2012. The number of irregular migrants deported by Turkish authorities in 2011
was 26,889 and 4,739 between 1 January and 1 July 2012. Meanwhile, the number of third country nationals detected in 2011 by EU Member
States’ law enforcement forces when entering or attempting to enter illegally
the EU and coming directly from or transiting through the Turkish territory
amounted to 55,630. This represented a slight increase
of 2 % on the 2010 figures. Turkish borders remained
porous also in the first half of 2012. In the period between 1 January and 15
July 2012 the number of the irregular migrants coming or transiting Turkey and
intercepted by EU Member States amounted to 25,944.

Pending adoption of the Law on Foreigners
and International Protection, no substantial administrative measures were taken
to improve the situation of irregular migrants. The overall capacity to host
irregular migrants decreased to 2,176 in 2011. Minimum living standards at
removal centres and their inspection remain unregulated. The lack of human and
financial resources hampered the improvement of physical conditions in the
removal centres. The construction of new removal centres in Van and Bitlis,
each with a capacity of 400 to 600 people, was hampered by the Van earthquake.
No structured approach to psycho-social services targeting irregular migrants
is in place yet.

Access to legal aid for migrants remains
limited. There is no institutional capacity at the level of Bar Associations to
provide such support autonomously. Assisted voluntary return is carried out for
a limited number of migrants through projects financed bilaterally and with the
help of the International Organisation for Migration (IOM). Training of staff
working in the migration management continued through national resources and
with the support of the EU or other partners.

The readmission agreement with the EU was
initialled on 21 June but still needs to be signed. Its swift conclusion and
effective implementation remains of crucial importance. Meanwhile, the
appropriate implementation of already existing bilateral readmission agreements
is a priority. The bilateral readmission protocol between Greece and Turkey
continued to be implemented only in a very limited manner. In February, Turkey signed
a readmission agreement with Bosnia and Herzegovina.

Limited progress has been noted on asylum,
pending the adoption of the Law on Foreigners and International Protection.
Turkey continues implementing the Geneva Convention on Refugees on the basis of
a reservation limiting the benefits of the Convention only to the asylum
seekers originating from European countries. While the construction of seven
reception centres for asylum seekers and refugees funded by the EU budget is
still on-going, the sharp increase in the number of asylum applications turned
out to be critical for the reception capacity. Additionally,
as a consequence of the earthquake in the eastern part
of Turkey in October 2011, most of the refugees living in Van, one of the most
important ‘satellite cities’ in the Turkish national asylum system, had to move
out of the city as their accommodation was destroyed and they had little access
to the assistance deployed for the local community.

The Turkish authorities demonstrated a high
level of competence and operational capacity in dealing with the continuous
inflow of Syrian nationals into Turkey since the outbreak of the crisis in
Syria. The open-ended Temporary Protection status, granted at the end of
October 2011 to all camp residents, sanctioned a situation of factual
protection. This entails keeping borders open, ensuring humanitarian aid and
refraining from forcibly returning Syrian citizens to their country.

According to the official estimates, the
number of Syrian citizens staying in Turkey reached nearly 100,000. Most of
them are in camp and container sites set up in four southern provinces. General
living conditions in the camps have been praised by a number of international
observers, including the UNHCR and ECHO. The UNHCR assisted the Turkish
authorities on the ground: it followed and monitored camp operations and
supported, in an advisory role, registration procedures in the Hatay
registration centre. An increasing number of observers have been able to
monitor and report on the situation in the camps. However, further efforts are
needed to ensure full transparency and to allow other relevant players,
including civil society organisations active in the field of asylum, access to
the camp facilities.

There has been limited progress on visa
policy. The Ministry of the Interior has introduced new provisions on short
stays in Turkey. However, Turkey did not 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. No
additional measures were taken to further strengthen checks at borders
following the visa exemptions launched in early 2009. Furthermore, Turkey
continue discriminating between Member States as regards visa policy: the
citizens of 11 EU Member States continue to be required to hold a visa before
entering Turkey, while the citizens of 16 Member States are exempted from this
obligation. There is a clear need to step up training for consular staff, in
particular on document security.

Limited
progress can be reported on external borders and Schengen. Legislation on
transferring border management tasks and coordination to a specialised and
professional border security entity has not yet been submitted to parliament
for approval. The draft roadmap for Integrated Border Management (IBM) has not
yet been approved. The delays in the adoption of the law and the IBM roadmap
are a major institutional hindrance towards the institutional development and
implementation of integrated border management.

Both
intra-agency and inter-agency cooperation and coordination need to be developed
considerably in the interests of efficient border management. The proposed
legislative amendment on expanding the tasks of Deputy Governors to act as
administrative heads of the border agencies is still pending in the parliament.

A Memorandum of
Understanding (MoU) between Frontex and the Turkish Ministry for Foreign
Affairs was signed in May 2012. This MoU enables a framework to be set up for
enhanced operational cooperation between Frontex and Turkey, including
participation in training activities and in joint operations, the deployment of
Frontex experts to Turkey and a more organised exchange of information and risk
analysis. Overall, the lack of risk analyses, including joint analyses among
relevant authorities in charge of border management, has led to inefficient
border control and less-than-optimal use of resources.

Structured
training is needed for all border agencies, including language training. The
rotation of border staff needs to be carefully reviewed in order to ensure
sustainability of expertise. Replacing the landmines with modern and
humanitarian border surveillance tools is a priority. Problems posed by the
architectural designs for the operational functionality of land border crossing
points (BCPs) need to be addressed. Border agencies at local and central level
need to be consulted regularly during both the design phase and utilisation of
the modernised BCPs. This entails establishing proactive border checks
procedures and regulations to control irregular migration at transit zone areas
in the airports.

The existence
of exclusive customs zones at the land BCPs poses a major challenge to the
establishment of an integrated border management system locally. Cooperation
with neighbouring countries and with countries of origin and destination, in
terms of border management, needs to be improved. Enhanced cooperation between
border authorities and the Turkish national airline also needs to be enhanced,
in particular through joint training and better exchange of information leading
to proper pre-boarding and pre-arrival screenings and analyses.

Limited progress can be reported on judicial
cooperation in civil and criminal matters. On judicial cooperation in civil
matters, in November 2011 Turkey set out the principles and rules to be followed
by domestic institutions with regard to implementation of the 1965 Hague
Convention on Service of Documents and the 1970 Convention on Taking Evidence
Abroad in Civil and Commercial Matters. On child protection, ratification of
the 2003 Convention on Contact concerning Children was completed and the
convention entered into force in May 2012. The mediation law on legal disputes,
which entered into force in June 2012, is expected to reduce the workload of
the judiciary and allow rapid, low-cost and effective resolution of civil and
criminal disputes as well as possible contribution to social peace. The law is
also applicable to EU citizens. However, Turkey has not yet ratified the 1996
Convention on Parental Responsibility. During the reporting period 1,765
requests in the area of judicial cooperation in civil matters were received by
Turkey and 6,779 requests were made by Turkey.

As regards judicial cooperation in criminal
matters, Turkey has participated in the regular meetings of the European
Judicial Network (EJN). Five judges are acting as contact points for Eurojust
and the EJN to facilitate the execution of extraditions and requests for mutual
legal assistance. During the reporting period 96
extraditions were requested by Turkey and seven extraditions by EU Member
States; six extraditions to Turkey were enforced. Regarding mutual legal
assistance in criminal matters, a total of 491 requests were received by Turkey
and 2,933 requests were issued by Turkey. On transfer of convicts, six
transfers took place to Turkey and two to EU Member States.

Uneven progress has been achieved in the
area of police cooperation and the fight against organised crime. Turkey
is a party to the main international conventions. Community policing divisions
have been established in 81 provinces. However, the lack of a data protection
law continues to limit police cooperation at international level and hinders
the conclusion of an operational cooperation agreement with Europol. The
assignment of a police liaison officer to Europol would help improve bilateral
cooperation. The Monitoring and Assessment Board to Implement the National
Strategy against Organised Crime (2010-2015) continues to meet on a regular
basis under the coordination of the Ministry of the Interior.

No significant progress was noted in the
area of combating trafficking in human beings. Drafting work continued on the framework law in this area. Consultations
were organised with line ministries, representatives of civil society, law
professionals and academia. Consultation meetings were also held with relevant
international bodies and the EU. Further efforts are
needed in order to gather reliable statistical data on human trafficking.
Victims’ shelters in Ankara and Istanbul and a safe house in Antalya were
operating and received financial support from the 2012 budget. The 157
toll-free helpline for victims continued functioning.

Following the establishment of a Cybercrime
Department under the Turkish National Police in 2011, subordinated divisions
were created at provincial level in February 2012. Turkey has not yet ratified
the Council of Europe’s Convention on Cybercrime, signed in 2010. With regard
to forensics, a national fingerprint and DNA database is still to be
established. Data collection and analysis in the area of law enforcement needs
to be improved. The Turkish National Police has established witness protection
units in 71 provinces. Inter-agency cooperation needs to be strengthened.

Progress can be reported in the fight
against terrorism. Turkey ratified the Council of Europe’s Convention on
the Prevention of Terrorism and the International Convention for the
Suppression of Acts of Nuclear Terrorism. However, Turkey still needs to ratify
the Council of Europe’s Convention on the Laundering, Search, Seizure and
Confiscation of the Proceeds from Crime and on the Financing of Terrorism. The
Law on Prevention of the Financing of Terrorism also needs to be adopted in
order to meet the requirements of the Financial Action Task Force (FATF).
Serious concerns remain as regards the broad definition of terrorism under the
Anti-Terror Law. (See Situation in the east and south-east and Freedom of
expression).

Turkey continued to face terrorist attacks
from the PKK.

Turkey is actively engaged in a
counter-terrorism dialogue with the EU. However, the absence of a data
protection law prevents Turkey from concluding a cooperation agreement with
Europol and limits judicial cooperation with Eurojust and with the EU Member
States.

Some progress has been achieved in the area
of cooperation in the field of drugs. The interim evaluation of the 2nd
National Action Plan against Drugs and Drug Addiction (2010-2012) to implement
the National Strategy (2006-2012) was carried out in February 2012. A total of
32 new psychoactive substances have been included in the scope of the Law on
Supervision of Drugs as a result of the activities carried out by the Early
Warning System Working Group. Successful operations resulting in the seizure of
76,392 kg of cannabis, 592 kg of cocaine, 7,294 kg of heroin and 1,364,253
ecstasy tablets were carried out by the Turkish law enforcement bodies. Two
controlled delivery operations were carried out with Germany and 2 kg of
cocaine was seized as a result of those operations.

The agreement concerning Turkey’s
participation in the European Monitoring Centre for Drugs and Drug Addiction
(EMCDDA) was ratified in June 2012. Turkey reports annually to the EMCDDA and
continues participating as an observer in Reitox meetings of heads of focal
points. However, the status and human resources of the National Reitox Focal
Point need to be strengthened further. There are 22 treatment centres, so
overall capacity is limited. There is a need to establish better treatment and
rehabilitation facilities to achieve a more balanced and effective approach
against drugs. Data collection and analysis capacity need to be improved.

Limited progress has been achieved in the
area of customs cooperation. In 2011, the institutional framework was
changed, leading to the merger of the Ministry of Customs and the Ministry of
Trade into a new Ministry of Customs and Trade.

The duties and responsibilities of the main
units of the Turkish Customs Administration (TCA) have been revised and its
regional organisation has been reshaped. The number of specialised
Anti-Smuggling and Intelligence Directorates has increased from 18 to 29. At
each Regional Directorate a risk analysis unit has been established to enable
coordination and cooperation with regard to risk analysis and profiling among
the local customs units. Further training is needed to implement risk
management. One centralised vehicle tracking system and a number of mobile
inspection units are in use. However, the TCA needs to increase staffing at
many BCPs.

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

Conclusion

Overall, limited progress can be reported
in the area of justice, freedom and security. Turkey is successfully providing
humanitarian assistance to the Syrian refugees, however, its asylum system
continues to be far from the EU standards. Turkey needs to step up its capacity
to prevent irregular migration. Conclusion of the EU-Turkey Readmission
Agreement and the full implementation of the existing readmission obligations
remain of crucial importance. Adoption of the Law on Foreigners and
International Protection as well as reforms in the area of border management
continue to be a priority. Only limited progress could be reported in aligning
visa legislation. Reforms are also needed in the fight against terrorism and
organised crime. The lack of adequate data protection legislation is one of the
main reasons preventing the development of police and judicial cooperation with
the EU. Overall, alignment is at an early stage in this area.

4.25.
Chapter 25: Science and research

Good progress can be reported in the area
of research and innovation policy. Turkey continued to strengthen the
research and innovation capacity at national level. Implementation of the 2011
new organisational set-up following the establishment of the Ministry of
Science, Industry and Technology and the organisational changes in the
structure of the Technological
Research Council of Turkey (TUBITAK) and the Turkish Academy of Sciences (TUBA)
entered into force.

The level of participation in the Seventh
EU Research Framework Programme (FP7) increased both in terms of
submitted and successful projects, with an average success rate of 16,5 %
compared to EU average of 21,2%. Turkey is particularly successful in thematic
areas such as ICT, KBBE (food, agriculture, biotechnology), Transport and
Security and very good in terms of number of SMEs participating in FP7 and
Marie Curie Actions. Turkey has very good administrative capacity with a
well-developed and active network of National Contact Points. Participation in
a number of key areas such as health and environment is still low, as is the
overall number of applications. Participation in the specific programmes IDEAS
is weak. Turkey is participating in a number of Joint Programming Initiatives
in the framework of the Innovation Union which aims to address major European
societal challenges by harmonising national research activities. Turkey
participates, as an associated country, in the Strategic Energy Technology Plan
and has been actively participating in European Innovation Partnerships on
active and healthy ageing, water and sustainable agriculture.

Turkey is participating as a third country
participant in the Seventh Euratom research Framework programme (2011-2013).

The active cooperation with the Joint
Research Centre (JRC) continued through 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. Since
the signature of the memorandum of understanding between the JRC and Turkey in
July 2007, a total of 30 Turkish researchers have been supported by TÜBİTAK to
work at the JRC institutes. The memorandum of understanding will be renewed in
the middle of 2012 for another five-year period.

With respect to
European Research Area, Turkey has taken several important measures and
updated national strategies to further strengthen its national research and
innovation capacity. At its
December 2011 meeting, the Turkish Supreme Council for Science and Technology
(SCST) took several decisions aiming at increasing and improving their research
and innovation capacity through target setting and policy instruments.

A TurkStat
R&D activities survey over 2010 shows that the overall share of R&D in
GDP decreased slightly to 0.84% from its 0.85% level in 2009 but the share of
the private sector continued to increase to € 7.4 billion compared to
€ 6.6 billion in 2009, which represents a 12% increase. In 2010 the number
of full-time equivalent researchers reached 64,000, compared to 58,000 in 2009.

Five provinces
(Elazığ, Aydın, Diyarbakır, Hatay and Siirt) were chosen to be supported under
the provincial innovation platforms support programme of TÜBİTAK, which aims to
develop science, technology and innovation capacities at provincial level
through involvement of local stakeholders, including public bodies, local
universities, industry and civil society organisations.

New support
programmes were also launched by TÜBİTAK, including the funding for research,
technological development and innovation projects from the private sector,
funding of technological entrepreneurship, and a co-funded brain circulation
scheme. A new fellowship programme, also partially supported under the Seventh
EU Research Framework Programme (FP7), aims to increase and facilitate mobility
of experienced researchers of any nationality.

The
establishment of science centres in 16 greater city municipalities by 2016 and
in all 81 provinces of Turkey by 2023 was announced by the Minister of Science,
Industry and Technology. Turkey’s first science centre is scheduled to be
opened in 2013 in Konya.

Conclusion

Good progress
has been made in the area of science and research. Steps were taken to further
reinforce Turkey’s capacity, and its integration into the European Research
Area is well on track. Turkey’s participation and success rate in the EU
Research Framework Programme (FP7) have increased although further efforts are
needed to strengthen the quality of submissions and improve the quality of
researchers. Overall, Turkey is well prepared in this area.

4.26.
Chapter 26: Education and culture

There has been some progress in the area of
education, training and youth. Public interest in the Lifelong Learning
and Youth in Action Programmes continued to grow substantially, with a
considerable increase in the number of grant applications in all sub-actions of
both programmes. The Turkish National Agency signed a total of over 3,000 grant
agreements with beneficiary institutions and individuals. The total number of
final beneficiaries reached 55,000 and the Memorandum of Understanding was
modified to increase Turkey´s financial contribution to the programmes in 2012
and 2013 by 40 % and 60 % respectively, to allow for more projects to be
supported. With a view to the next programming period starting in 2014, the
parliament adopted a law increasing National Agency staff by 50 to a total of
220.

An amendment to the Turkish Education Law
extending compulsory education from 8 to 12 years and introducing a new
approach for schools (4+4+4 instead of 8+4) was enacted in April 2012. The law
introduces some amendments to the current education system, including
flexibility to choose among different school types, i.e. general and vocational
schools (lower secondary part of imam-hatip schools) as lower secondary school.
Children will thus be able to begin religious education at the age of 10 rather
than 14, a result which, together with the way in which this new legislation
was introduced, caused controversy in Turkey.

Following the extension of compulsory
pre-school education to 71 out of 81 provinces in the school year 2011-12, the
enrolment rate for pre-school education for 2011-12 rose to 44% from 43.1% for
the 4-5 age group and the number of students and teachers at pre-school
education increased by 5.6% and 15.6% respectively. However, the objective of
compulsory pre-school education in all provinces has been abandoned by the new
education law. The net primary school enrolment rate
rose to ca. 99%. For secondary education, the enrolment rate rose to 67.4% and
the gender gap narrowed to 2.5%. A continued effort to increase enrolment at
all levels, especially for girls, remains an important challenge on top of
effective intervention strategies to reduce drop out.

Turkey is at an
advanced stage of implementing the Bologna process recommendations. In the area
of higher education, with the establishment of 6 universities in 2012 the total
number of universities in Turkey reached 168. However, significant quality differences
exist in terms of numbers of teaching staff and infrastructure. Further
challenges are the recognition of qualifications, quality assurance and
establishment of a national qualifications framework based on the European
Qualifications Framework (EQF). Since November 2011 the Vocational
Qualifications Agency is the sole body responsible for the entire qualification
process. However, an independent and fully functional Quality Assurance and
Accreditation Agency remains to be established in line with the European
Standards and Guidelines. Preparations for the agreed
quality assurance agency for higher education have not yet started.

The General
Council of Higher Education Board (YÖK) decided in November 2011 to abolish the
system of using a lower coefficient to calculate the final score in the
university admission examination or the Undergraduate Placement Examination for
graduates of vocational high schools. The 4+4+4 Law confirmed this decision.

In December
2011 YÖK endorsed the University of Tunceli’s proposal to set up Zaza and
Kurdish language departments. This will enable Tunceli University to open Zaza
and Kurdish language departments offering a four-year university education.

Lifelong learning is in its early stages of
development in Turkey and efforts need to be stepped up and coordinated,
especially in the most disadvantaged regions of the country. With the adoption
of authorisation procedures the regulatory framework for the National
Vocational Qualifications System is now solidly established, but only a small
number of sectoral certification bodies are likely to be operational in the
near future. The National Qualifications Framework is scheduled to be adopted
in 2012.

Little progress is to be reported in the
area of culture. Despite the efforts undertaken by the Cultural Contact
Point, Turkey’s participation in the EU’s Culture
programme remains relatively low. The Ministry of Culture and Tourism extended
the Tax Incentives for Cultural Investments and Enterprises Law to provide tax
exemption for the Culture Programme and co-financing for organisations or
sponsorships. At the same time, ineffective or late protection of cultural
heritage, as demonstrated by cases in Göreme, İznik and Istanbul, has raised
concerns.

Turkey has still not ratified the 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 culture. Popular interest in the
Lifelong Learning and Youth in Action Programmes continued to increase. Turkey
extended compulsory education from 8 to 12 years. There
has been little progress in the area of culture and no progress on legislative
alignment. Overall, Turkey is moderately advanced in this area.

4.27.
Chapter 27: Environment and climate change

In the field of environment, there was hardly any
progress on horizontal legislation. Preparations have continued for
transposing the Environmental Liability and INSPIRE Directives. As regards the
Environmental Impact Assessment (EIA) Directive, procedures for transboundary
consultations have not been aligned and Turkey has not yet sent to the relevant
Member States the draft for general bilateral agreements on cooperation for EIA
in a transboundary context. The planned Turkish-Russian nuclear power plant due
to be built on the eastern Mediterranean coast of Turkey continues to cause
public concern, both nationally and internationally. Transposition of the SEA
Directive has not yet been completed. No strategic environmental assessments
(SEAs) or proper environmental impact assessments (EIAs) have been carried out
for the plans to build a large number of hydro-power plants.

Limited progress has been achieved on air quality.
Preparations have continued for the transposition and implementation of the National
Emissions Ceilings Directive. The administrative capacity to implement and
enforce the legislation on ambient air quality remains insufficient.

Some progress can be reported in the field of waste
management, with adoption of legislation on control of waste electrical and
electronic equipment. Efforts have continued to bring landfill facilities up to
EU standards and to improve the management of hazardous waste. The capacity for
sorting and recycling has increased. Turkey still needs to fulfil the requirements
of the EU Waste Framework Directive in connection with the preparation and
implementation of waste management plans.

Good progress can be reported in the area of water
quality, with the adoption of the new water law and legislation on river
basin management and groundwater and drinking water. Preparations are
continuing to convert river basin protection action plans into river basin
management plans. However, the institutional framework for water management is
still not organised at river basin level and, following the separation of the
water sector from the Ministry of Environment and Urbanisation, institutional
coordination has become problematic. A Water Institute has been established, to
give scientific advice on water management issues. Transboundary consultations
on water issues are progressing but are still at an early stage. An action plan
has been prepared for the Ergene River at the border with Greece and
discussions are ongoing with Bulgaria regarding the potential impact on the
Natura 2000 site at the mouth of the Rezovska river of the plans to use water
to supply the city of Istanbul. Wastewater treatment capacity has increased,
due to recent investment.

Limited progress can be reported on nature protection with
the adoption of a by-law on the procedure and principles for defining,
registering and approval of the protected areas. Framework legislation
on nature protection and the national biodiversity strategy and action plan are
still to be adopted. The potential Natura 2000 sites have not yet been
identified. The possible negative impact on these sites of building large water
and energy infrastructure remains a major issue. The law on privatisation of
degraded forest habitats raises concerns about shrinking forest habitats in
Turkey.

Some progress can be reported regarding industrial
pollution control and risk management. The by-law on control of industrial
pollution was amended and Turkey ratified the amendments related to the
international agreement on remediation of oil pollution (1992 Changes on
Limitation Values). A Regulatory Impact Assessment (RIA) for Seveso II has been
completed in 2012. A web-based permitting system has been created for
industries, but the establishment of an integrated permit system is still at an
early stage.

No progress can be reported in the field of chemicals, including
REACH. The capacity for effective implementation is still insufficient.

Legislative alignment in the field of noise is well
advanced, but no progress can be reported on the preparation of noise maps and
action plans.

Regarding climate change, limited progress was made
on general policy development. Turkey adopted a national climate change action
plan (NCCAP) covering the period up to 2023. Although the NCCAP provides for
major emissions reductions in primary energy intensity and energy savings in
buildings, industry, transport, waste, agriculture and forestry sectors, no
overall domestic target was adopted. Significant need for awareness-raising on
opportunities and challenges of climate action is needed at all levels.

At international level, Turkey, while listed among
developed countries in Annex I to the United Nations Framework Convention on
Climate Change (UNFCCC), continued to claim that it is in a situation different
from that of Annex I Parties. This was recognised by COP17 in Durban in
December 2011.

Turkey is one of the largest emitters that has not yet put
forward a greenhouse gas emissions reduction target for 2020. Turkey has not
yet submitted its fifth national communication under the UNFCCC. However, the
country submits greenhouse gas inventories on an annual basis as required.
Turkey associated itself with some formal EU positions.

Turkey no longer participated regularly in the climate work
under the Regional Environmental Network for Accession (RENA). A successful
high-level conference was organised in April 2012 under the RENA on EU–Turkey
Climate Change Cooperation.

Turkey adopted a bylaw on Monitoring of Greenhouse Gas
Emissions. The country took some steps to raise awareness on emissions trading.
However, Turkey’s status as an Annex I Party without a target continues to hold
back progress. No steps were taken to promote convergence with the EU
Effort-Sharing Decision. No progress was made as regards other legislation in
the field of climate change and Turkey needs to take further steps to align
with and implement EU legislation.

No progress can be reported in the area of administrative
capacity. Last year’s comprehensive administrative reorganisation
resulted in a fragmented allocation of responsibilities in the field of water
and nature protection. At the newly created Ministry of Environment and
Urbanisation (MoEU) a balance between the environment and development agendas
has still to be found and there are in particular concerns over the lack of
attention paid to environmental considerations in the implementation of major
infrastructure projects, as well as the willingness and ability to ensure a
meaningful public consultation process, including with environmental NGOs. There
are some concerns related to the loss of provincial competences in the field of
environmental management, in particular as regards inspection, monitoring and
permitting. Further efforts are needed to strengthen cooperation and
coordination between various institutions with responsibilities in the fields
of environment and climate change. The climate department within the MoEU
requires further strengthening.

Conclusion

Uneven progress was made towards further alignment in the
area of environment and climate change. Special attention is to be paid to the
sustainability of existing protected areas and potential Natura 2000 sites. A
more ambitious and coordinated climate policy still needs to be established and
implemented, both domestically and internationally, in particular as a critical
mass of countries are putting forward commitments internationally and taking
action domestically. No further progress was made on administrative capacity.
The environmental agenda of the MoEU needs strengthening, as well as coordination
and cooperation between relevant authorities at all levels. Overall,
preparations in this area are at an early stage.

4.28.
Chapter 28: Consumer and health protection

Little progress can be reported in the consumer
protection area. The consumer movement is still
weak. A constructive and regular dialogue mechanism
needs to be developed for active participation of consumer NGOs in policy- and
law-making activities. The annual advisory Consumer
Council did not meet during the reporting period, so there was no follow-up on
previous decisions taken.

There has been little progress on product
safety-related issues. The National Market Surveillance Strategy Document
was revised for the years 2012-2014 and adopted by the Market Surveillance and
Product Safety Assessment Board, consisting of Ministers and heads of market
surveillance authorities, which held its first meeting in July 2012. No
progress can be reported on the revision of general product safety legislation.
(See also Chapter 1 — Free movement of goods)

The Ministry of Customs and Trade adopted a
Communiqué which sets minimum safety requirements on safety risks for childcare
products, plastic decorative materials, magnets, bath products and candles. The
Communiqué refers to harmonised and national standards, but only with a
non-mandatory character to check products’ compliance. It does not contain a
specific provision for imports, EU or non-EU and is applicable to all products
on the market. The Communiqué will enter into force in January 2013.

Some progress has been made on non-safety
related issues. After last year’s creation of a DG for Consumer Protection
and Market Surveillance within the Ministry of Customs and Trade,
administrative capacity has been improved by recruiting additional (junior) consumer
protection experts. A commission consisting of academics and civil servants has
been established to continue work on drafts of consumer protection legislation
in line with EU requirements. However, the Consumer Protection Law has not yet
been adopted. With regard to enforcement, the capacity of consumer courts and
arbitration committees needs to be further strengthened, including for
consistent and better quality legal interpretations of consumer legislation.
Consumer court decisions are not accessible. No statistical data are available
on consumer complaints.

In the field of public health, some
progress can be reported. As regards horizontal aspects, the ongoing
institutional reform of the health system has led to improvements in the
administrative capacity of the Ministry of Health. The reform also includes the
establishment of a National Public Health Institute, which is responsible for
the implementation of primary health care services, communicable diseases
control programmes, non-communicable diseases/programmes and cancer,
laboratories, and safety of consumers and workers.

In the field of tobacco control,
Turkey fulfils the acquis requirements and also takes full account of
the respective Council Recommendations. Turkey is one of the leading countries
in the region and an active party to the WHO Framework Convention on Tobacco
Control.

As for communicable
diseases, the administrative reform has led to the setting-up of an Early
Warning Response and Field Epidemiology Training Unit within the National
Public Health Institute. The role of the Unit is to coordinate and control
national early warning and response activities, provide support to
sub-national/provincial units and facilitate information exchange with
appropriate international organisations. Enforcement capacity is being
strengthened, but continued efforts are needed in order to ensure a coherent
monitoring and surveillance system in line with EU legislation and
International Health Regulations. Due to the absence of real HIV/AIDS policies,
there is a need to raise public awareness of the disease, the incidence of
which is increasing.

With regard to blood, tissues, cells and
organs, in terms of legislative alignment, some progress can be reported.
The Ordinance on Tissue Typing Laboratories, the Indication List for Composite
Tissue Transplantation and the Donor Inclusion and Donor Exclusion List for
Composite Tissues Transplantation were published in November 2011. The
Regulation on organ and tissue transplantation services and the Regulation on
management of organ and tissue transplantation centres have entered into force.
As per the new administrative
structure, tissues and cells and organ transplantation services are merged to
become one unit under the Health Services Directorate-General, whereas the
Blood Services Unit remains separate.

Good progress has been made in the field of
mental health. Following the 2011 Mental Health Action Plan, some 50 new
community-based mental health centres have been established in 42 provinces.
Some promising measures were taken to promote the inclusion of people with
mental health problems. Further action towards empowerment and protecting the
human rights of this target group is recommended.

Conclusion

Some progress
can be reported on consumer and health protection. Key legislation related to
consumer protection is still to be adopted and the consumer movement remains
weak. Turkey has established new administrative structures in the area of
public health. Their functioning needs to be monitored closely. Preparations in
this area are on track.

4.29.
Chapter 29: Customs Union

There has been uneven progress with regard
to customs legislation. Turkey amended the provisions implementing its
customs law by adopting rules mainly on summary declaration. Turkey aligned
with opinions and regulations regarding classification of goods in the Combined
Nomenclature. Further alignment needs to be achieved in
the area of intellectual property rights (IPR). The rules on free zones and
duty relief legislation, especially with regard to duty-free shops at entry
points, are not fully aligned with the acquis. During the reporting
period, Turkey introduced additional customs duties at varying rates on certain
woven fabrics and apparel products for a group of third countries, although the
goods were in free circulation in the EU, thereby excluding products
originating in the EU and in Turkey’s free trade partners.

The rules on surveillance and management of
tariff quotas are not fully in line with the acquis. In particular, no
progress can be reported with regard to tariff quotas for processed
agricultural products. The requirement to declare the origin of third-country
originating products which are subject to conformity assessment checks is not
in line with the Customs Union as the relevant customs formalities have already
been completed for release for free circulation in the EU. As a result of the
EU-Turkey Customs Union, preparations in the area of customs legislation are
well on track.

Some progress can be reported as regards administrative
and operational capacity. Further efforts were made to strengthen
security-related customs enforcement capacity. The Ministry of Customs and
Trade reorganised regional directorates and the local customs offices operating
under them. Risk analysis units were established at the regional directorates
and the number of local anti-smuggling and intelligence units increased. The
frequency of physical inspections has been slightly reduced; however, the risk
management system still needs substantial improvement to reduce both physical
and documentary checks and enhance risk analysis procedures. There is a need
for automated risk management on summary declarations to enable risk analysis
to be carried out electronically before entry and exit of goods. Simplified
procedures are implemented in a manner not fully in line with the acquis.
On IPR infringement cases, seizures upon complaints by right holders increased
whereas ex officio customs controls remained low, particularly as
regards large shipments. Turkey continues to be one of the main countries from
which counterfeit goods enter the EU. Turkey needs to strengthen its
enforcement of IPR at customs, particularly in export controls.

Even though the
interconnectivity and interoperability of the national transit IT system with
the new computerised transit system (NCTS) was made possible (CCN/CSI
connection), the accession of Turkey to the Common Transit Convention (CTC) is
still pending. In the area of tariffs (TARIC, Quota and surveillance), IT
systems are not yet in place. Progress regarding a paperless customs
environment has been limited to export procedures. Activities in the area of a
single window are at an early stage. The Ministry lacks a strategic plan for
electronic customs as well as for converging IT activities and business
initiatives to implement modernised customs rules. An IT strategy in this
regard remains to be adopted. Preparations in the area
of administrative and operational capacity are on track.

‘Customs Union’
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

Good progress
was made in the field of the Customs Union. Further alignment is needed on duty
relief, free zones, surveillance, tariff quotas and IPR. 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.
Preparations in the area of customs IT systems need to continue. Additional
efforts are required to improve risk-based controls and simplified procedures
to facilitate legitimate trade while ensuring security and safety. Overall, the
EU-Turkey Customs Union has enabled Turkey to reach a high level of alignment
with the acquis in this area.

4.30.
Chapter 30: External relations

Limited progress can be reported in the
area of the common commercial policy. There has been limited progress in
the alignment of the Turkish generalised system of preferences (GSP). In
particular, further alignment is needed with the EU’s GSP, namely with regard
to geographic coverage and rules of origin.

During the reporting period, Turkey
concluded all eight safeguard investigations with decisions on extension of
measures applied to frames for spectacles, bags, cotton yarn, electrical
appliances, matches, motorcycles and footwear and definitive measures on PET
(polyethylene terephthalate). Intensive use of safeguard measures adversely affects
progress towards alignment with the common commercial policy.

Turkey
maintains a satisfactory level of coordination with the EU within the WTO, in
particular as regards the Doha Development Agenda and in the context of the
G-20. However, there is room for further improvements in this area.
Coordination within the OECD has been satisfactory.

No further
alignment in the area of medium- and long-term export credits can be reported
although a new regulation is in the pipeline. There is room for improving legislation
on dual-use export controls in particular by using a single consolidated
list of dual use items and technologies. Turkey’s level of alignment with the
EU common commercial policy continues to be high.

There has been
progress on bilateral agreements with third countries. During the
reporting period, the free trade agreement with Lebanon was ratified. Turkey
signed free trade agreements with Mauritius and South Korea. The free trade
agreement between Turkey and Syria has been suspended. Turkey has published
amendments to origin protocols of free trade agreements with Bosnia-Herzegovina
and Croatia to enable cumulation with the EU for the goods covered by the
Customs Union.

Turkey made
some progress in the field of development policy and humanitarian aid.
The total amount of official development aid granted by Turkey in 2011 was
about € 944 million in 2011. The level of alignment in this field remained
satisfactory.

‘External
relations’ 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

Some progress was made in the area of
external relations. Further alignment is required in areas such as the general
system of preferences and control of dual-use goods. Intensive use of safeguard
measures is a cause of concern. Overall, the level of alignment in this area
remains high.

4.31.
Chapter 31: Foreign, Security and Defence Policy

The regular political dialogue between the EU and
Turkey covered international issues of common interest, including developments
in North Africa, the Middle East and the Gulf, the Middle East peace process,
the Western Balkans, Afghanistan/Pakistan, Russia and the Southern Caucasus as
well as counter-terrorism and non-proliferation issues. Informal EU-Turkey
consultations took place in Ankara on the Western Balkans, Africa, the Middle
East, North Africa and the Gulf. (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),
Turkey aligned itself, when invited, with 37 out of 70 relevant EU declarations
and Council decisions (53% alignment). Turkey did not align itself in
particular with declarations and Council decisions on Syria, Iran, Libya,
Tunisia, Egypt and Bahrain. Turkey did not sign the statute of the
International Criminal Court. Turkey announced its candidacy for a non-permanent
seat at the UN Security Council for 2015-16.

Bilateral relations with Iraq started deteriorating
markedly in February although Turkey’s relations with the Kurdish Regional
Government in Northern Iraq have been significantly strengthened. Turkey strongly
condemned terrorist attacks in Iraq.

Turkey continued to engage with Iran. On the nuclear
dossier, Turkey hosted EU3+3 and Iran talks in April and July. Turkey did not
align itself with restrictive measures imposed by the EU on Iran. Turkey’s sole
oil refiner Tupras however reduced imports of Iranian oil by 20% before 1 July.

Turkey stepped up its relations with Gulf
countries. Turkey hosted the fourth Joint Ministerial Meeting of the
GCC-Turkey High Level Strategic Dialogue in Istanbul in January. In April,
Prime Minister Erdoğan visited Saudi Arabia and attended the 13th United
Nations Conference on Trade and Development in Qatar.

As regards the Middle East, Turkey’s diplomatic
relations with Israel remain downgraded and military agreements with
Israel suspended. Turkey repeatedly strongly condemned Israeli settlement
activities. Close relations were maintained with the Palestinian Authority.

Turkey was particularly vocal on Syria, condemning strongly and
repeatedly the Syrian regime’s violence against civilians and calling on
it to refrain from disproportionate and excessive use of force. Turkey welcomed
UNSC Resolutions 2042 and 2043 on a UN supervisory mission and UNGA Resolution of 3 August 2012.
Turkey announced that it considered President Assad illegitimate and
established close contacts with the Syrian opposition and in particular with
the Syrian National Council. After the downing of a Turkish aircraft by Syria,
Turkey increased its military presence along the borders. Turkey closed its
Embassy in Damascus and Consulate General in Aleppo. Turkey closed its borders
for commercial traffic with Syria, although it maintained an open border policy
for individuals. Turkey provided humanitarian assistance to an increasing
number of Syrians fleeing their country (nearly 100,000 present in September). As regards developments in North Africa, Turkey took
a positive and supportive stance and welcomed the democratic trends in various
countries. Foreign Minister Davutoglu visited Egypt on 2- 3 July 2012. Turkey
welcomed the establishment of a new government under the leadership of Prime
Minister Kandil in Egypt.

Turkey strengthened its relations with African countries
and plans to have a network of 34 missions in Africa by end-2012. Turkey was
particularly vocal on the humanitarian and political crisis in Somalia
and hosted the Second Istanbul International Conference on Somalia on 1 June
2012. Turkey provides assistance to Sudan on health and vocational
training.

As regards relations with the Southern Caucasus and
Central Asia, Turkey’s chairmanship of the Conference on Interaction and
Confidence Building Measures in Asia was extended in April until 2014.

The first meeting of the High Level Strategic Cooperation
Council between Turkey and Azerbaijan was held in Izmir in October 2011.
An agreement was reached on the sale of gas from Shah Deniz II for consumption
in Turkey and transit through Turkey. The protocols signed with Armenia
in 2009 to normalise relations have still not been ratified.

Turkey also hosted the 20th anniversary Summit of the Black
Sea Economic Cooperation Organisation (BSEC).

Turkey continued its efforts to enhance cooperation with
and between Afghanistan and Pakistan, in particular through hosting the
Istanbul Conference for Afghanistan ‘Security and Cooperation in the Heart of
Asia’ – where the ‘Istanbul process’ to back political reconciliation at a
regional level was also launched – and the sixth Trilateral Summit of
Afghanistan, Turkey and Pakistan.

Turkey-Russia relations were marked by a number of
high-level visits.

Turkey and the United States consulted regularly on
regional developments and cooperated closely on security and counter-terrorism.
The two countries co-chair the Global Forum on Counter Terrorism, a Ministerial
level meeting of which took place in Istanbul in June.

Turkey strengthened its relations with Asian countries
via a series of high-level visits. Turkey developed its relations with South
American countries.

In November Turkey announced restrictive measures on
Syria, including a travel ban, a freeze of assets and trade restrictions.

Concerning the non-proliferation of weapons of mass
destruction, Turkey is party to all existing international arrangements. In
February, Turkey ratified the 2005 UN Convention for the Suppression of Acts of
Nuclear Terrorism. There has been limited progress on dual use goods. Turkey
has revised nuclear transfer trigger and nuclear dual use lists. 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 continued to engage actively in cooperation with
international organisations, such as the UN and the Council of Europe. Turkey ratified the third Protocol to the Treaty on Amity and
Cooperation, which provides that the EU may accede to the Treaty. However,
Turkey announced its intention not to align with any declaration or statement
of the EU in the framework of international organisations during the Cyprus
Presidency.

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

As regards civil and military crisis management in
the framework of the common security and defence policy (CSDP), Turkey
continues to contribute to the EU-led military mission in Bosnia and
Herzegovina (EUFOR Althea). It is also contributing to the EUPM (the EU-led
police mission in Bosnia and Herzegovina) and to the EULEX mission in Kosovo.
The issue of EU-NATO cooperation beyond the ‘Berlin plus’ arrangements that
would involve all EU Member States remains to be resolved.

Conclusion

The political dialogue with the EU on foreign and security
policy intensified significantly, also given Turkey’s influential regional role
in supporting reforms, including with regard to recent developments in North
Africa. Turkey was also vocal on Syria, condemning strongly and repeatedly the
regime’s violence against civilians and providing vital humanitarian
assistance. However, during the reporting period, Turkish alignment with CFSP
declarations continued to be low when compared to earlier periods. Overall,
preparations in the area of foreign, security and defence policy are moderately
advanced.

4.32.
Chapter 32: Financial control

Some progress
can be reported in the area of public internal financial control (PIFC).
The Ministry of Finance presented draft for a new Policy Paper to the European
Commission in June. This draft Policy Paper will need to be completed and
should address the issues of managerial accountability, the functioning of the
various inspection services and the delineation of control, audit and
inspection functions, and also the establishment of a permanent Central
Harmonisation Unit for Internal Audit (CHU-IA) and the restructuring of the
Internal Audit Coordination Board. The appointment of internal auditors in the
central and local administration has not yet been completed. The function of
internal audit is not clearly described in the founding legislation of the
public institutions. The Internal Audit Coordination Board issued an Internal
Audit Quality Assurance and Development Programme. However, the Ministry of
Finance needs to take a more active stance in steering the reform process. As
regards financial management and control (FMC), the Gap Analysis and the Action
Plan drafted by the Central Harmonisation Unit for Financial Management and
Control (CHU-FMC) has yet to be adopted. Preparations in this area in terms of
alignment with the acquis are advanced, while considerable further
efforts are needed with regard to implementation.

Uneven progress can be reported in the area
of external audit. Almost all implementing legislation under the revised
2010 Law on the Turkish Court of Accounts (TCA) has been issued. The TCA
adopted a Regularity Audit Manual and drafted Manuals for Performance Audit and
Audit of Performance Indicators. The TCA established the Audit Development and
Training Centre. However, the TCA will now need to ensure that the law is
implemented and that the new audit techniques and concepts are adopted and
understood by its audit staff. The parliamentary follow-up to audit reports
needs to be enhanced, and the parliament will need to establish the necessary
institutional structure with the technical expertise to analyse the reports.

An amendment to the TCA Law adopted in July
severely limits the competences of the Court and invalidates some of the above
developments, taking the level of alignment back to below the standards of the
International Organisation of Supreme Audit Institutions (INTOSAI) and EU best
practices.

Some progress can be reported in the area
of protection of the EU’s financial interests. An amendment to the
founding legislation of the Prime Ministry Inspection Board (PMIB) was adopted
in November 2011. It reinforced the PMIB’s legal mandate as Turkey’s Anti-Fraud
Coordination Service (AFCOS), responsible for cooperation with the European
Commission and its European Anti-Fraud Office (OLAF). The PMIB issued
guidelines on the process for investigating irregularities involving EU Funds.
The PMIB together with other relevant institutions and OLAF continued
operational cooperation on suspected fraud cases. However, the PMIB will need
to adopt implementing rules to clarify the functioning of the AFCOS network on
prevention, detection and follow-up of cases. With regard to the Convention on
the Protection of the European Communities’ Financial Interests (PIF Convention)
and its Protocols, the Turkish penal code is now sufficiently aligned with the
PIF Convention. However, monitoring of the actual implementation of the
Convention needs to be scrutinised.

Good progress
can be reported in the area of protection of the euro against counterfeiting.
Turkey continues to participate in the Pericles Programme. The Counterfeit
Tracking System continues to operate among the Treasury, the Central Bank of
Turkey, the Public Prosecutors Office, the Turkish National Police and the Gendarmerie.
The Turkish National Police is the National Central Office (NCO) for
cooperation with the EU institutions as part of the Counterfeit Tracking
System. Since July 2102, sanctions are in place against legal persons who fail
to withdraw counterfeit domestic and foreign currency from circulation. However,
the NCO will need to enhance centralisation of technical and police
information. Institutions serving de facto as the national analysis centre and
national coin analysis centre needs to be formally appointed. The law on
enhancing the effectiveness of judiciary services, enacted in July introduces
fines against credit institutions that fail to withdraw counterfeits from
circulation. The Turkish institutions have
prepared a Road Map for strengthening cooperation with Europol, to enact the ‘Operational
Cooperation Agreement’ with that body. Turkey needs to take the necessary steps
envisaged in the Road Map.

Conclusion

Some progress
can be reported in the area of financial control, in particular as concerns the
protection of the euro. Additional efforts are still required, especially as
regards the scope of the new PIFC Policy Paper, reinforcement of the internal
audit function in the public administration and reinforcement of the Turkish
AFCOS. Furthermore, recent
amendments to the Law on the Court of Accounts invalidate previous developments
in the area of external audit. Overall, preparations in this area are
moderately advanced.

4.33.
Chapter 33: Financial and budgetary provisions

There is no development to be reported
regarding preparations for the application of the own resources system. Basic
principles and institutions in policy areas such as agriculture, customs,
taxation, statistics and financial control linked to the application of this
system are already in place. In the area of traditional own resources,
Turkey’s customs legislation largely complies with the acquis. However,
additional efforts are needed for full alignment and implementation.

Preparations in the area of the VAT
resource and administrative capacity building to calculate the statistical
VAT base have yet to start. Turkey will need to take sound measures for
combating fraud in VAT and customs duties in order to ensure that it
contributes appropriately to the own resources system upon membership. There
has been some progress in the area of the Gross National Income resource.
Turkish financial and statistical data were further aligned with the European
System of Accounts.

There has been no progress in the field of administrative
infrastructure. Turkey will need to establish coordination structures and
implementing rules for accurate collection, accounting, monitoring, payment and
control of own resources, and reporting to the EU.

Conclusion

There has been no particular progress in
this area. Sound coordination structures, administrative capacity and
implementing rules will need to be determined in due course. Overall,
preparations in the area of financial and budgetary provisions are at an early
stage.

Statistical Annex

STATISTICAL DATA || || || || || || || ||

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

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

Basic data || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Population (thousand) || 1) || 64 693 || 69 805 || 70 586 || 71 517 || 72 561 || 73 723

Total area of the country (km²) || 2) || 783 562 || 783 562 || 783 562 || 783 562 || 783 562 || 783 562

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

National accounts || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Gross domestic product (GDP) (billion national currency) || || 240.2 || 843.2 || 950.5 || 952.6 || 1 099 || 1 298

GDP (million euro) || || 219 816 || 472 897 || 501 339 || 440 942 || 547 348 || 556428

GDP (euro per capita) || 3) || 3 375 || 6 735 || 7 052 || 6 120 || 7 498 || 7 524

GDP (in Purchasing Power Standards (PPS) per capita) || 3) || 7 445 || 11 349 || 11 829 || 10 943 || 12 013 || 13 412

GDP per capita in PPS (EU-27 = 100) || 3) || 37 || 45 || 47 || 46 || 49 || 52

Real GDP growth rate (growth rate of GDP volume, national currency, % change on previous year) || || -5.7 || 4.7 || 0.7 || -4.8 || 9.2 || 8.5

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

Labour productivity growth: GDP growth per person employed (% change on previous year) || || -4.7f || 3.5f || -1.5f || 3.5f || 2.7f || 1.7f

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) || || 49.2f || 63.6f || 65.8f || 70.0f || 69.9 || 72.5

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

Agriculture and fisheries || || 9.4 || 8.5 || 8.5 || 9.1 || 9.5 || 9.0

Industry || || 23.8 || 22.3 || 22.0 || 21.1 || 21.8 || 22.5

Construction || || 4.7 || 5.4 || 5.2 || 4.2 || 4.7 || 5.0

Services || || 62.1 || 63.7 || 64.3 || 65.6 || 64.1 || 63.5

Final consumption expenditure, as a share of GDP (%) || || 80.8 || 84.1 || 82.7 || 86.2 || 86.0 || 85.1

Gross fixed capital formation, as a share of GDP (%) || || 15.9 || 21.4 || 19.9 || 16.9 || 18.9 || 21.9

Changes in inventories, as a share of GDP (%) || || -0.9 || -0.4 || 1.9 || -1.9 || 0.6 || 2.0

Exports of goods and services, relative to GDP (%) || || 27.4 || 22.3 || 23.9 || 23.3 || 21.2 || 23.7

Imports of goods and services, relative to GDP (%) || || 23.3 || 27.5 || 28.3 || 24.4 || 26.8 || 32.6

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

Industry || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Industrial production volume index (2005=100) || 4) || 72.6 || 114.8 || 114.2 || 102.9 || 116.4 || 126.8

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

Inflation rate || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Annual average inflation rate (HICP, % change on previous year) || || 56.8 || 8.8 || 10.4 || 6.3 || 8.6 || 6.5

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

Balance of payments || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Balance of payments: current account total (million euro) || || 4 198 || -28 044 || -28 232 || -9 586 || -35 184 || -55 487

Balance of payments current account: trade balance (million euro) || || -3 755 || -34 186 || -36 049 || -17 816 || -42 578 || -64 275

Balance of payments current account: net services (million euro) || || 10 201 || 9 692 || 12 067 || 12 415 || 11 687 || 13 127

Balance of payments current account: net income (million euro) || || -5 583 || -5 186 || -5 687 || -5 873 || -5 385 || -5 585

Balance of payments current account: net current transfers (million euro) || || 3 335 || 1 637 || 1 437 || 1 688 || 1 092 || 1 246

of which government transfers (million euro) || || 224 || 590 || 495 || 853 || 425 || 570

Net foreign direct investment (FDI) (million euro) || || 3 188 || 14 550 || 11 528 || 4 917 || 5 713 || 9 634

Foreign direct investment (FDI) abroad (million euro) || || -555 || -1 537 || -1 733 || -1 113 || -1 104 || -1 770

of which FDI of the reporting economy in EU-27 countries (million euro) || || -486 || -1 090 || -611 || -884 || -700 || -1 134

Foreign direct investment (FDI) in the reporting economy (million euro) || || 3 743 || 16 087 || 13 261 || 6 030 || 6 818 || 11 404

of which FDI of EU-27 countries in the reporting economy (million euro) || || 3 178 || 10 631 || 9 070 || 3 776 || 4 163 || 8 407

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

Public finance || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

General government deficit/surplus, relative to GDP (%) || || -26.2 || -1.5 || -2.8 || -7.0 || -2.6 || -1.1

General government debt relative to GDP (%) || || 85.2 || 39.9 || 40.0 || 46.1 || 42.4 || 39.8

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

Financial indicators || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Gross foreign debt of the whole economy, relative to GDP (%) || || 58.7 || 35.8f || 39.5 || 42.2 || 39.5 || :

Gross foreign debt of the whole economy, relative to total exports (%) || || 362.5 || 232.6 || 212.3 || 262.8 || 254.0 || :

Money supply: M1 (banknotes, coins, overnight deposits, million euro) || 5)6)7) || 8 965 || 44 644 || 39 927 || 49 691 || 65 976 || :

Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) || 5)6)8) || 37 253 || 201 366 || 203 840 || 228 237 || 286 595 || :

Money supply: M3 (M2 plus marketable instruments, million euro) || 5)6)9) || 38 973 || 215 308 || 214 473 || 240 246 || 299 805 || :

Total credit by monetary financial institutions to residents (consolidated) (million euro) || || 26 977 || 140 157 || 138 301 || 153 867 || 231 862 || :

Interest rates: day-to-day money rate, per annum (%) || || 93.0 || 17.3 || 16.1 || 9.2 || 6.6 || :

Lending interest rate (one year), per annum (%) || 10) || 58.9 || 20.0 || 17.5 || 9.0 || 9.0 || 12.5

Deposit interest rate (one year), per annum (%) || 11) || 62.2 || 22.3 || 22.9 || 17.2 || 15.0 || :

euro exchange rates: average of period - 1 euro = … national currency || || 1.094 || 1.778f || 1.896 || 2.151 || 1.989 || :

Effective exchange rate index (2005=100) || || 94.2 || 130.4 || 132.7 || 126.4 || 144.2 || 127.8

Value of reserve assets (including gold) (million euro) || || 22 649 || 51 926 || 53 342 || 51 949 || 64 350 || 68 180

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

External trade || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Value of imports: all goods, all partners (million euro) || || 46 255.8 || 123 959.4 || 136 441.0 || 100 763.7 || 138 813.8 || 173 098.9

Value of exports: all goods, all partners (million euro) || || 35 062.2 || 78 126.4 || 89 559.1 || 73 283.7 || 85 263.7 || 96 973.3

Trade balance: all goods, all partners (million euro) || || -11 193.5 || -45 833.0 || -46 882.0 || -27 480.0 || -53 550.1 || -76 125.6

Terms of trade (export price index / import price index) || 12) || 96.4 || 100.3 || 97.2 || 102.0 || 98.2 || 94.9

Share of exports to EU-27 countries in value of total exports (%) || || 56.0 || 56.3 || 47.9 || 45.9 || 46.2 || 46.2

Share of imports from EU-27 countries in value of total imports (%) || || 47.9 || 40.2 || 36.8 || 40.1 || 38.9 || 37.8

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

Demography || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Natural growth rate: natural change (births minus deaths) (per 1000 inhabitants) || || 13.5 || 11.7 || 13.4 || 13.3 || 13.0 || 12.8

Infant mortality rate: deaths of children under one year of age per 1000 live births || || 28.3 || 15.9 || 14.9 || 14.0 || 13.2 || 12.6

Life expectancy at birth: male (years) || || 69.4 || 71.4 || 71.5 || 71.7 || 71.8 || 72.0

Life expectancy at birth: female (years) || || 73.5 || 75.9 || 76.2 || 76.5 || 76.8 || 77.1

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

Labour market || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Economic activity rate (20-64): share of population aged 20-64 that is economically active (%) || 15) || : || 52.7 || 53.5 || 54.5 || 55.9 || 57.2

\* Employment rate (20-64): share of population aged 20-64 in employment (%) || 15) || : || 48.2 || 48.4 || 47.8 || 50.0 || 52.2

Employment rate male (20-64) (%) || || 75.3 || 73.0 || 72.7 || 70.4 || 72.7 || 75.1

Employment rate female (20-64) (%) || || 27.4 || 24.2 || 24.9 || 25.8 || 28.0 || 29.8

Employment rate of older workers (55-64): share of population aged 55-64 in employment (%) || || 35.9 || 27.1 || 27.4 || 28.2 || 29.6 || 31.4

Employment by main sectors (%) || || || || || || ||

Agriculture || 13) || 35.8 || 22.0 || 22.1 || 23.1 || 23.7 || 24.0

Industry || 13) || 18.1 || 21.2 || 21.4 || 19.6 || 20.3 || 20.0

Construction || 13) || 5.3 || 6.1 || 6.0 || 6.3 || 6.5 || 7.1

Services || 13) || 40.8 || 50.7 || 50.4 || 51.0 || 49.5 || 49.0

Unemployment rate: share of labour force that is unemployed (%) || 14) || : || 8.9 || 9.7 || 12.7 || 10.8 || 8.8

Share of male labour force that is unemployed (%) || 14) || : || 8.8 || 9.6 || 12.7 || 10.5 || 8.3

Share of female labour force that is unemployed (%) || 14) || : || 9.2 || 10.0 || 12.7 || 11.5 || 10.1

Unemployment rate of persons < 25 years: share of labour force aged <25 that is unemployed (%) || 14) || : || 17.3 || 18.5 || 23.1 || 19.9 || 16.7

Long-term unemployment rate: share of labour force that is unemployed for 12 months and more (%) || 14) || : || 2.6 || 2.6 || 3.2 || 3.0 || 2.3

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

Social cohesion || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Average nominal monthly wages and salaries (national currency) || 16) || : || 859.0 || 956.0 || 1 084.0 || 1 142.0 || :

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 (%) || 17) || 58.1 || 46.9 || 45.5 || 44.3 || 43.1 || 41.9

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

Standard of living || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Number of passenger cars per 1000 population || || 70.1 || 92.7 || 96.3 || 99.2 || 104.0 || 110.0

Number of subscriptions to cellular mobile telephone services per 1000 population || || 282.9 || 887.8 || 932.5 || 877.8 || 851.3 || 886.0

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

Infrastructure || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Density of railway network (lines in operation, per 1000 km²) || || 11.1 || 11.1 || 11.1 || 11.6 || 12.2 || :

Length of motorways (km) || || 1 696 || 1 908 || 1 922 || 2 036 || 2 080 || :

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

Innovation and research || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Spending on human resources (public expenditure on education in % of GDP) || || : || : || : || : || : || :

\* Gross domestic expenditure on R&D in % of GDP || 18) || 0.54 || 0.72 || 0.73 || 0.85 || 0.84 || :

Percentage of households who have Internet access at home (%) || 19) || : || 19.7 || 25.4 || 30.0 || 41.6 || 42.9

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

Environment || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

\* Greenhouse gas emissions, CO2 equivalent (tons, 1990=100) || || 148.7 || 203.2 || 196.0 || 197.6 || 214.9 || :

Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP) || 20) || 259.6 || 250.5 || 246.3 || 257.4 || 252.5 || :

Electricity generated from renewable sources in % of gross electricity consumption || || 19.9 || 19.1 || 17.4 || 19.6 || 26.4 || :

Road share of inland freight transport (% of tonne-km) || || 95.2 || 94.9 || 94.5 || 94.6 || 94.4 || :

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

Energy || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Primary production of all energy products (thousand TOE) || || 24 576 || 27 454 || 29 209 || 30 328 || 32 487 || :

Primary production of crude oil (thousand TOE) || || 2 679 || 2 241 || 2 268 || 2 349 || 2 671 || :

Primary production of hard coal and lignite (thousand TOE) || || 12 281 || 14 797 || 16 674 || 17 402 || 17 523 || :

Primary production of natural gas (thousand TOE) || || 284 || 827 || 931 || 627 || 625 || :

Net imports of all energy products (thousand TOE) || || 50 160 || 80 688 || 78 294 || 75 295 || 79 400 || :

Gross inland energy consumption (thousand TOE) || || 75 402 || 107 627 || 106 421 || 106 138 || 109 260 || :

Electricity generation (thousand GWh) || || 122.7 || 191.6 || 198.4 || 194.8 || 211.2 || :

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

Agriculture || Note || 2001 || 2007 || 2008 || 2009 || 2010 || 2011

Agricultural production volume index of goods and services (producer prices, previous year=100) || || 93.3 || : || : || : || : || :

Total utilised agricultural area (thousand hectare) || || 40 967 || 39 505 || 39 122 || 38 911 || 39 011 || 38 247

Livestock: cattle (thousand heads, end of period) || 21) || 10 548 || 11 037 || 10 860 || 10 724 || 11 370 || 12 386

Livestock: pigs (thousand heads, end of period) || || 2.7 || 1.8 || 1.7 || 1.9 || 1.6 || 1.8

Livestock: sheep and goats (thousand heads, end of period) || || 33 994 || 31 749 || 29 568 || 26 878 || 29 383 || 32 310

Production and utilisation of milk on the farm (total whole milk, thousand tonnes) || || : || : || : || : || : || :

Crop production: cereals (including rice) (thousand tonnes, harvested production) || || 29 571 || 29 257 || 29 287 || 33 577 || 32 773 || 35 202

Crop production: sugar beet (thousand tonnes, harvested production) || || 12 633 || 12 415 || 15 488 || 17 275 || 17 942 || 16 126

Crop production: vegetables (thousand tonnes, harvested production) || || 24 164 || 25 661 || 27 218 || 26 780 || 25 997 || 27 547

: =
not available

- =
not applicable

p =
provisional

f =
forecast

e =
estimated value

b =
break in series

\* =
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)            Population
(Total, 15-64 and 20-64) for 2008-2011 is given from ABPRS annual results and
the rest is given from population projections; demographic indicators were
based on 2008 Address Based Population Registration System and Demographic and
Health Surveys; population projections have been revised according to the final
result of 2008 Turkey Demographic and Health Survey.

2)            Including
lakes.

3)            Mid-year
population figures were used.

4)            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.

5)            Central
Bank of Turkey (CBRT) selling rate is used when converting money supply data in
national currency (TRY) to Euro.

6)            Before
December 2005, M1 included currency in circulation and demand deposits (TRY).
From December 2005 onwards, M1 included currency in circulation and demand
deposits (TRY,FX).

7)            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.

8)            Before
December 2005, M2 included M1 and time deposits (TRY); from December 2005
onwards, M2 included M1 and time deposits (TRY, FX).

9)            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.

10)          Averages
of monthly data, lending to enterprises more than one year.

11)          Averages
of monthly data, up to one year or longer.

12)          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.

13)          2001
- 2008, data according to NACE Rev 1; 2009 - 2011, data according to NACE Rev
2.

14)          Calculations
on unemployment are made in line with harmonized EU definition (4 weeks
criterion is used for definition of job search).

15)          Data
are given by the results of labour force survey.

16)          2007
- 2009, data is based on Income and Living Conditions Survey.

17)          Annual
LFS results; the variable ‘participation in non-formal education or training
(COURATT)’ was added into the calculation from 2004 (This variable was not
asked in previous years).

18)          Revised
GDP series (base year 1998) have been used for computing R&D share in GDP
since 2007.

19)          From
2007 onwards, calculated according to mid-year population estimates.

20)          2001
- 2009, Kg of oil equivalent per 1000 euro GDP 1998.

21)          Excluding
buffaloes.

[1]               The rapporteur for Turkey is Mrs Oomen-Ruijten.

[2]               Enlargement Strategy and Main Challenges 2012-2013, COM(2012)
600.

[3]               The decision stipulates 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]               http://www.tbmm.gov.tr/yayinlar/sigma\_report\_final\_eng.pdf

[5]               10,318 together with those in
the administrative judiciary.

[6]               I.e.
to avoid that the person concerned absconds, commits a serious offence,
interferes with the course of justice, or poses a serious threat to public
order.

[7]               Protocols 4, 7 and 12.

[8]               According to the OSCE there were 95 journalists in
prison in April 2012, compared to 57 in April 2011. 20 of the journalists on
the 2012 list have been released since, 10 of them as a consequence of the
entry into force of the 3rd judicial reform package.

[9]               The Diyarbakir Sarmaşik Association, the Orhan Dogan
Support Houses for Education, the Dersim Alevi Faith and Culture Academy
Association, and the cases of the executive members of the Socialist Democracy
Party and the Social Freedom Platform, the Istanbul branch of the Human Rights
Association, the Research and Development Association for Kurdish Language
(Kurdi Der) İzmir Branch, the Board of Health Professions and the Turkish
Medical Association are alleged examples of the government interfering
disproportionately with freedom of association.

[10]             The 2008 Foundations Law
(No 5737) was amended by decree law on 27 August 2011. The implementing regulation
for the August decree was published in the
Official Gazette on 1 October 2011.

[11]             Hrant Dink, editor-in-chief of
the Armenian Agos newspaper at the time, was killed in front of his office on
19 January 2007.

\*               This designation is without prejudice to positions on
status, and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo
declaration of independence.

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