With Law No:3238 ratified by Turkish Parliament in 1985, an institution capable of formulating longterm policies and principles, and supplementing it with a constant fow of financial resources was established. The organization that was engaged to fulfill those functions was the Undersecretariat for defence Industries (SSM), established with the main goal to constitute a modern defence industry in Turkey and to render possible the modernizastion of the Turkish Armed Forces.’ In order to reach that aim, the main principle is to acquire arms, ammuntion and equipment needed by the Turkish Armed Forces from domestic suppliers to the extent that proved to be technically and economically feasible.

In addition to introducing a totally new approach and set of mind to the Turkish defence Industry, the law in question has also established a highly flexible and efficient administrative mechanism. The five main pillars of this mechanism are: Defence Industry Executive Committee, Undersevretariat for defence Industries, The defence Industry Support Fund, Defence Industry High Coordination Council and defence Industry Control Committee.

1. Defence Industry Executive Committee:

The main decision making body of the system, defence Industry Executive Committee is headed by the Prime Minister, and includes the Chief of general Staff and the Minister of National defence as its members. The Executive Committee has been tasked with the critical decisions relating to defence industrial issues and major defence procurement projects. Another responsibility of the committee has been to render possible nation-wide coordination between all entities with a defence İndustry dimension.

2. Undersecretariat for Defence Industries (SSM):

SSM is the second organ that was established by the Defence Industry Law, and it was given the main duty of putting into effect the decisions taken by the Executive Committee. In this regard, SSM was given a special legal entity of its own, as well as its own extra-budgetary financial resources. Along those lines, the main tasks and responsibilities entrusted upon SSM are as follows:

• Putting into effect the decisions taken decisions taken by the Defence Industry Executive Committee,
• To reorganize existing Turkish Industry in line with the prerequisites of defence industry,
• To plan the production of modern arms and equipment at private and public sector entities,
• To realise research and equipment of modern arms and equipment, to have their prototypes built, to make advance payments, paln advance orders and determine other financial and economic supports,
• To coordinate export and offset trade issues relating to defence industry products.

3. The Defence Industry Support Fund:

The Fund was envisioned as the prupose-built financial instrument to enable SSM to carry out its tasks. A highlyn flexible and bureaucratic formality free mechanism with a constant flow of financial resources is in full and independent control of SSm itself. Among the main incomes are; allotments from the corporate tax, fees and levies imposed on alcoholic and tobacco products, and all forms of chance games and betting, lottery etc. Since 1986, 80% of a total of US$11 billion was spent in domestic production purposes, 16% on direct procurement projects and 4% on ATIP Project.