Ministry of Justice of Turkey

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Citizens who cannot collect their claims they have become entitled to as a result of a private debt elation or any other reason appeal to enforcement and bankruptcy offices in order to collect their claims by the power of the state. The enforcement and bankruptcy office serves a payment order to the debtor to honor the claim. It warns the debtor that his property will be seized if fails to make the payment. If the debt is not paid or objected within the specified period, the assets of the debtor is seized, auctioned by forcible enforcement and the claimant is paid out of the proceeds of the auction. Sales through compulsory enforcement are in the form of an auction. In the past, rumor was that certain individuals or groups illegally deterred others from freely taking part in the auctions. When people could not take part and bid freely, the property which was not sold in the first auction was significantly devalued in the second auction. This benefited neither the debtor nor the claimant: the former could not pay his debt and the latter could not collect his money properly. Before the new system, any asset seized and auction was sometimes sold at 40% of its real value after deducting the costs. This made it virtually impossible to pay any debt in full. Now, however, seized assets are sold at prices close to the estimated real value or even at higher prices. Furthermore, seized assets often had to stay at the sequestrator warehouses indefinitely or lost economic value as auctions were not completed due to low participation. Now, the auction is announced at a completely public platform, ensuring high level of participation and facilitating sales. Sales of assets at real value is important to make sure that claimants collect their money in due time and and debtors pay their debts easily. For this, everyone should be able to join auctions and bid freely and without any concerns. This project has been launched to facilitate such an environment where everyone can bid online, irrespective of time and space.

B. Strategic Approach

 2. What was the solution?
After the nationwide implementation of UYAP IT System which aims to dematerialize all judicial and administrative proceedings and transactions in the Turkish Judiciary, the IT Department of the Ministry of Justice started working on this project for an online auctioning system for the sales of seized property in a transparent and widely accessible manner; this project is consistent with the efforts to modernize of the judiciary. The e-sales project was launched to facilitate any willing party to freely participate in and bid at auctions regardless of time and space with a view to preventing the the challenges described in the item above. The main consideration behind the e-sales project was that seized assets may be auctioned online, parallel to the rapid developments in distant sales practices. The project aims to fully dematerialize seizure sales transactions. Previously, auctions were held physically and not all concerned parties were informed or were able to join freely; therefore, assets were sold at prices much lower than estimated real values. With this project, anyone in any part of the world can bid anytime of the day without any influence. This increases participation and facilitates sales of seized assets at real value in a competitive environment. Sometimes, sales values are even higher than estimated values. With this practice, the e-bidding period starts 10 days before for movable and 20 days before for immovable assets and ends one day before the date of physical auction. The physical auction begins based on the highest bid offered online. Bidders are required to deposit a security of 20% of the estimated value of the asset in question, which can be paid online before bidding. All the transactions must fully comply with the law; therefore, necessary provisions regarding e-sales were incorporated in the legislation. Necessary amendments were made in the law and secondary legislation. The project which was initially piloted in three enforcement and bankruptcy offices were later rolled out to all enforcement and bankruptcy offices under the coordination of the IT Department of the Ministry of Justice. When enforcement personnel register the asset to be sold in their own screens, the respective auction is immediately posted on the E-Sales Portal without having to perform any other transaction. The auction post includes all necessary details such as properties of the asset and pictures. For instance, it includes the brand, mileage, fuel type and transmission type of a vehicle and the location, map section and acreage of an immovable. These details which, together with the seizure information, are uploaded by enforcement officers using their own screens in enforcement and bankruptcy officers are then published on the E-Sales Portal automatically. The system has already become popular although it has not been announced or publicized yet.

 3. How did the initiative solve the problem and improve people’s lives?
Similar e-bids or e-sales practices are already commonly used in the private sector. For the first time, it has been used in the public sector in the area of enforcement and bankruptcy. The project is unique in that the debtor is relieved of his debts as the asset is sold at real value and the claimant is satisfied with the result. With the project, the asset to be sold is announced online globally and this increases participation The claimant, debtor and the economy benefit from the process now that participation is higher, the participants can bid freely and without any influence and the assets are sold at prices at real or a higher value.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
The complaints and recommendations in this regard were assessed, a SWOT analysis was performed and the feasibility studies were started in early 2010. The legislation amendment work was started in parallel. The amended legislation was published in July 2012. Software development started after necessary analysis and design work. As the law requires the deposit of a security of 20% of the estimated value of the asset in question to become eligible for bidding, potential bidders should be able to deposit this security online before the auction. For this purpose, an integration with Vakıfbank was created and the necessary webservice was developed. As a result, an individual who is willing to bid for an asset can connect to the bank via E-Sales Portal, deposit the security using online banking and bid for the asset. The system automatically calculates the amount of security based on the estimated value of the asset. With the exception of the highest bidder, participants who wish to abandon prior to the auction may reclaim their deposits with the same procedure. The bidders who lost the auction are reimbursed the security they have paid electronically by enforcement and bankruptcy officers. The software development phase was completed in 2012 and the software was piloted in three enforcement and bankruptcy offices for almost two months. After a smooth piloting period, the practice was extended to all enforcement and bankruptcy offices in 2013. Also, digital cameras were distributed to all enforcement and bankruptcy offices.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The project has been developed and launched by the Head of IT Department of the Ministry of Justice; deputy heads, rapporteur judges and field experts of IT Department, enforcement and bankruptcy officers and software engineers. The integration for the deposit and reimbursement of securities was performed in cooperation with Vakıfbank. The legislation amendments were drafted by the Directorate General of Legislation Affairs of the Ministry of Justice and adopted by the Grand National Assembly of Turkey.
 6. How was the strategy implemented and what resources were mobilized?
No additional budget was allocated for the implementation of the project. The project was developed together with the field experts and software developers of the IT Department of the Ministry of Justice. The computers, servers and network infrastructure provided by UYAP, the e-justice system of Turkey, were used. Therefore, no additional technical infrastructure was required for the project. As a consequence, maximum benefit was made using minimal resources without bringing any burden on the public budget.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
1-Transparency: This portal provides a transparent setting where auctions are open to anyone, everyone can freely bid without any concern for pressure and bid amounts are posted publicly. The project has considerably facilitated the sales process of seized property and reduced redtape. The transparency in practice is furthered by the possibility of joining the auctions online globally. The transparency of the whole sales process of seized property has improved the effectiveness and efficiency of transactions. 2) Preventing corruption: Before this system, the sales process of seized property was challenged by several abuses and improprieties. For example, participation in auctions was low in many instances since announcements were not widely accessible, almost the same individuals joined all the auctions and these individuals prevented others from taking part. Therefore, assets were ultimately sold at prices much lower than the real value. This system has prevented abuse by ensuring participation of any willing party in the auctions. 3- Competition: The system has put an end to unfair competition among bidders. Because, the process is transparent and competitive in that bidders cannot threaten one another at the phase of bidding or they cannot obtain insider information on the auctioned asset to gain advantage upon others. This public service is equally accessible to all citizens. This includes the disabled, elderly or challenged who normally have difficulty in access to public service. The system protects the anonymity of bidders, which prevents inappropriate influence and allows everyone to bid as they wish. This is a very enabling environment for free competition. 4- No time or space constraints: The system which allows individuals to take part in auction irrespective of time and space is an effective, efficient, modern and service-oriented public service. Citizens do not need to go to the physical auction room and they are not bound by working hours when they wish to join an auction or offer a bid. 5- Equity: In the system, sales take place in a transparent and competitive environment and assets find their real value or are sold at even higher prices; therefore, debtors can pay their debts in shorter times and claimants have to spend less on costs. This makes the system fair and equitable for the parties.

 8. What were the most successful outputs and why was the initiative effective?
Prior to implementation of the project, necessary legal arrangements were made to urge all users to use the system. A lengthy testing stage was put in place in order to prevent potential troubles in implementation. The project was then piloted in three sites in real environment. After the law became effective, the system was launched in all enforcement and bankruptcy offices. The Undersecretariat issued a General Instruction to all enforcement and bankruptcy offices to open bank accounts at the integrated bank in order to ensure smooth performance of transactions and prevent losses of right on the side of citizens. Furthermore, digital cameras were sent to enforcement and bankruptcy offices to take pictures of assets and upload to the system. Enforcement and bankruptcy offices have to use the system now that the project is to implemented by the law. Therefore, the major factor ensuring implementation is the Law. The legislation process started parallel to project development. All units must implement the project. Enforcement and bankruptcy directors must carry out all enforcement proceedings in accordance with the Execution and Bankruptcy Law. When they fail to do so, citizens can appeal to Execution Courts. The decisions of enforcement courts are subject to appellate review by the Court of Cassation. Moreover, citizens who incur material and moral damages as a consequence of the misconduct of enforcement and bankruptcy officers can file an action for damages against the State. Enforcement and bankruptcy officers also have criminal liability for criminal acts and transactions. Therefore, all their transactions must be in line with the law. So, they must carry out all e-sales related transactions on time and properly at all stages. Failure to do so is subject to judicial supervision. The UYAP IT System which has been used for all judicial and administrative transactions in the Turkish judiciary over the past five years requires keeping of all judicial data electronically. With the monitoring and statistical functionality of UYAP, it is possible to monitor all regional and national usage rates and produce numerous statistical reports in detail.

 9. What were the main obstacles encountered and how were they overcome?
There were concerns about the technology literacy of people in rural areas; therefore, the legislation process was challenging. It was recommended to start from developed regions. However, this obstacle was overcome after explaining the benefits of the system in detail and its uses in solving several problems in the enforcement and bankruptcy system; a consensus was reached ultimately. Initially, the plan was to conduct all sales electronically. But it was later agreed to announce online, collect bids and auctions physically as a first stage and dematerialize the whole process after a period of implementation at a later stage against the fact that not all citizens may be capable of using technology effectively. Another challenge was the resistance of practitioners, i.e. enforcement and bankruptcy personnel. They were worried about further increase in their already heavy workload. After the law became effective, awareness-raising meetings were organized to address these concerns. At the system improvement stage, a regular and smooth communication strategy was used to exchange with directors and personnel of enforcement and bankruptcy officers and the system was constantly refined based on their recommendations. The work with the bank took 8 months to enable the deposit of securities online via the bank; this was necessary for bidding electronically. Ultimately, the process of security deposit and reimbursement online was set up. So, the system was developed in partnership and cooperation between the public sector, civil society and private sector from the design to implementation. Moreover, suggestions of citizens were taken into account at the development phase for enhanced user satisfaction. The media covered the project at various levels and the system which is well received by the citizens is running smoothly.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
With the project, announcements reach more people as they are posted online and for a long time. Previously, the sales announcements were only posted on the notice boards of enforcement and bankruptcy offices and sometimes published in a local and/or national newspaper. When published locally, the announcements became known only to local people. Now, the announcements are posted nationally and internationally. They reach many more people now. Before the e-sales project, sales announcements were already posted on the E-Announcement page. With online announcements, interested citizens sometimes travel from distant cities and offer high-value bids. Before the system, citizens were not informed about the auctions as only very few of them were published in the newspapers. Now, everyone can access the announcements and bid easily. With the system, the opening prices are also set at higher values. Previously, the opening price of a legally seized asset was usually half of the estimated value whereas the actual opening prices have become much higher on many occasions after the launch of the E-Sales Portal. For example, the first bid offered for an 250.000-TL item with an opening price of 125.000 TL was 170.000 TL on the E-Sales Portal, raising the opening price to 170.000 TL which, in the event of a physical auction, may have remained at 125.000 TL. As indicated in this example, the sales price of seized assets are often much higher than the opening price. Both claimants and debtors benefit from this. The system considerably increases participation in compulsory enforcement auctions on the one hand and enables participants to bid freely and without any undue influence on the other. The new law provides that the opening price of an auction in the e-sales system is to be half of the estimated value. This benefits both the claimant and debtor. Free competition makes it possible to sell an asset close to its real value. As a consequence, claimants receive their money and debtors get rid of their debts more easily. Closure of the debts in shorter times means resolution of enforcement files in shorter times and thus more efficient use of public resources. Timely payment of debts contributes to economic stability in the country. When sales were concluded at very low prices, debtors could not pay their debts and lost their assets, which created a vicious circle. Failure to pay debts was a social problem. We believe that the system will help this problem to disappear gradually. Furthermore, auction frauds occurred time to time in various parts of the county before the system. These instances have become rare after the implementation of the system. The system has aimed to introduce a nationwide holistic and permanent solution by using innovative methods and tools rather than providing a gradual response to the problems in enforcement and bankruptcy offices. This perspective has brought about change and improvement in the organizational culture and an innovative approach in the delivery of public services. The system offers a unique approach to public service all around the country.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Currently, the project is implemented in all enforcement and bankruptcy offices throughout the country. The project facilitates collection of debts by the public authority and payment to the claimant. The proper enforcement of private debt relations by the state contributes to the dynamism of the economy. Assets of debtors are sold at real value and they can pay their debts more easily. For example, debtor often had to sell two houses to close a debt which can now be paid by selling only one house thanks to the competitive setting provided by the system. However, the same debt can be closed by a single house now thanks to the competitive setting. The debtor retains his second house to support his family. If a person has to sell both his houses to barely pay debt, this would deprive his family of shelter and aggravate his debts. This is not good for the economic and social life of a country. The first phase of the project has introduced e-bidding only; at the second phase, both bidding and sales will be performed completely electronically. When the second phase is in place, participants and the sales unit will not even meet and all transactions including assignment of the assets will be performed by the auctioning authority just like in the case of distant sales. All stakeholders including the administration are convinced that the system is sustainable owing to the benefits it offers. The IT Department of the Ministry of Justice is visited by numerous foreign missions. The representatives of these missions often express their wish to adopt a similar system in their respective countries. For this purpose, concrete steps have been taken with respect to some of these countries and planning is ongoing with respect to some others.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
We have seen that the project should have been launched much earlier on. Turkish people who are fond of using the technology have started using the system immediately after it was launched. Questions started flowing to the helpdesk. Kısa sürede satış işlemleri gerçekleşti. Previously, some private websites obtained the auction announcements from newspapers or enforcement and bankruptcy offices and published them. They asked for paid subscription to use their services. With this project, citizens have easy and free access to all details of auctions. The fact that enforcement and bankruptcy offices already carries out all transactions over UYAP has made our task significantly easier. UYAP has been in use for nearly 10 years. When enforcement and bankruptcy offices perform their daily tasks (e.g. registering debt items, parties and assets in the system), the data needed by the E-Sales Portal is automatically entered in the system. They do not need to perform any additional tasks to incorporate a transaction in the E-Sales Portal. In addition, the system is constantly improved in accordance with the positive and negative feedback by users. The software team, integration team and enforcement and bankruptcy team of the Ministry of Justice have worked in coordination throughout the project. From the perspective of the Ministry of Health, the major lesson to learn is that huge problems do not always necessitate huge investments. The main lesson that the Ministry of Justice learned from the project is that the solution of major problems does not necessarily require huge resources; simple and inexpensive solutions may also bring major achievements.

Contact Information

Institution Name:   Ministry of Justice of Turkey
Institution Type:   Government Department  
Contact Person:   Suleyman Turkarslan
Title:   Mr.  
Telephone/ Fax:   00903122932019/00903122932222
Institution's / Project's Website:  
E-mail:   suleyman.turkarslan@adalet.gov.tr  
Address:   Ergazi Mah. Fatih Sultan Mehmet Blv. No: 448/B
Postal Code:   06370
City:   Yenimahalle
State/Province:   Ankara

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