Law No:3238 ratified by the Turkish Parliament in 1985, established an institution capable of generating long term defence policies and principles, and supplementing them with a continuous flow of financial resources. The organization founded to fulfill these functions is the Undersecretariat for Defence Industries (SSM), assigned with the major task to constitute a modern defence industry in Turkey and to achieve the modernization of the Turkish Armed Forces. In order to attain this objective, the main principle applied by SSM is to meet military requirements through domestic suppliers in the most technically and economically feasible way possible.
In addition to introducing a totally new approach and mindset to the Turkish defence industry, Law No:3238 also instituted a highly flexible and efficient administrative mechanism, the five main pillars of which are: Defence Industry Executive Committee, Undersecretariat 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 chaired by the Prime Minister, and includes the Chief of General Staff and the Minister of National Defence as its members. The Executive Committee makes the critical decisions relating to defence industry issues and major defence procurement projects. The Committee is also required to provide nation-wide coordination between all entities regarding defence industry.
2. Undersecretariat for Defence Industries (SSM):
The main duty of SSM, the second organ established by the Defence Industry Law, is to enact the decisions taken by the Executive Committee. According to the Law, SSM has a separate legal entity, as well as its own extra-budgetary financial resources to perform the following functions:
- To carry out the 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 conduct research and development of modern arms and equipment and to have their prototypes manufactured,
- To coordinate export and offset trade issues relating to defence industry products.
3. The Defence Industry Support Fund:
The Fund, designed as the prupose-built financial instrument to enable SSM to carry out its tasks, is a highly flexible and bureaucratic formality-free mechanism with a constant flow of financial resources, fully in control of SSM. Among the main cash inflow groups are; allotments from corporate tax,es fees and levies imposed on alcoholic and tobacco products, and all forms of lottery, betting and games of chance etc. Since 1986, 80% of a total of US$11 billion was allocated to domestic production purposes, 16% to direct procurement projects and 4% to ATIP (Advanced Technologies Industrial Park) Project.