Regulations

Official Gazette Date: December 15, 2012 Wednesday
Official Gazette Issue Number: 28385

THE REGULATION ABOUT THE OPERATION PRINCIPLES AND PROCEDURES FOR THE BOARD OF DIRECTORS OF TURKISH CATASTROPHE INSURANCE POOL

Purpose

Article 1 - (1) The purpose of this Regulation is to set out the operation principles and procedures of Turkish Catastrophe Insurance Pool - having public legal personality- which is established in order to provide the Compulsory Earthquake Insurance and perform the duties assigned by the Decree Law dated 25/11/1999 and numbered 587.

Basis

Article 2 - (1) This regulation is prepared based on the article 587 of Decree Law on Compulsory Earthquake Insurance dated 25/11/1999.

Definitions

Article 3 - (1) In this regulation;

a) Minister or Ministry: means the Minister or the Ministry to whom the Undersecretariat of Treasury is affiliated,
b) Undersecretariat: the Undersecretariat of Treasury
c) Institution: means, Turkish Catastrophe Insurance Pool
d) Board of Directors: means the Board of Directors of Turkish Catastrophe Insurance Pool,
e) Technical Operator: means the company which performs the technical operations of the Turkish Catastrophe Insurance Pool
f) Decree Law: means the Article 587 of the Decree Law on Compulsory Earthquake Insurance dated 25/11/1999.
e) Compulsory Earthquake Insurance: means the compulsory insurance that covers the damages caused directly or indirectly by earthquakes, to the amount that has been determined pursuant to Article 10.

The Structure and Work Address of the Board of Directors

Article 4 - (1) The Board of Directors is made up of 7 members, one of which is the Chairman. The Work Address of the Board of Directors is the address where the Technical Operator is located.

Distribution of Tasks

Article 5 - (1) The representative of the Undersecretariat presides over the Board of Directors. Chairman of the Board of Directors is responsible from maintenance of the Institution's operations in a regular and efficient manner. The Board of Directors is represented by the Chairman.

(2) Vice Chairman of the Board of Directors is selected among the members with at least four votes, and enables the operation of tasks which belong to the Chairman in the event that the Chairman is not available. In the event that the Vice Chairman of the Board of Directors secedes for any reason, a new election shall be made in accordance with the same procedure.

(3) Board of Directors shall be able to form expert committees when necessary – in which members of board of directors are also included – in order to supervise the state of affairs and to assist the Institution's operations.

Duties of the Board of Directors

Article 6 - (1) Board of Directors performs the following duties:

a) Preparing an operation plan related to Institution's works and operations.
b) Setting out the operation principles and procedures of the Technical Operator; enabling the performance of the duties – assumed by the Technical Operator – on time and without any deficits.
c) Establishing the principles and procedures related to loss assessment and indemnity payments.
d) Approving risk sharing and reassurance plans, deciding on the issuance of capital market tools with the purpose of protection.
e) Determining the insurance companies – which are authorized to conclude insurance agreement on behalf of the Institution - and the principles and procedures - which must be followed by them - by taking the opinion of the Undersecretariat.
f) Establishing the principles and procedures related to the guidance of Institution's assets to investment.
g) Deciding on the conduct of public relations, introduction and training campaigns; establishing the principles and procedures related to this issue.
h) Establishing the principles and procedures related to marketing.
i) Deciding on the goods and service purchases for Institution's needs; establishing the principles and procedures related to this issue.
j) If the Minister deems appropriate, deciding on the cooperation with international organizations and other countries' similar organizations and the operations to be conducted.
k) If it is decided by the Cabinet, establishing the principles and procedures related to other assurances apart from Compulsory earthquake insurance.
l) Establishing the principles and procedures related to the usage of succession right.
m) Giving information to the Minister and the Undersecretariat about the activities of the Institution.

Meetings of Board of Directors

Article 7 - (1) Board of Directors shall meet with the invitation of Board of Directors Chairman, Technical Operator or at least three members when necessary and at least six times in a calendar year in any case. The meetings shall be held at the head office of Technical Operator. However, it shall also be possible to hold the meetings in any part of Turkey with the approval of Board of Directors.

(2) Information and documents related to the meeting place, time, agenda and the issues that will be addressed during the meeting shall be submitted to the Board of Directors Chairman by the Technical Operator at least seven days before the meeting date for overview. The agenda - which is deemed suitable by the Chairman of Board of Directors - shall be announced to all members at least two days before the meeting date.

(3) Board of Directors shall gather together with the participation of at least five members, Chairman of Board of Directors or the Vice Chairman of Boards of Directors when the Chairman is not available. A board of directors' reporter shall be chosen from the framework of Technical Operator by the Board of Directors to maintain secretariat operations, to draw up the meeting conversations and to prepare the decision and minutes.

(4) Whenever he/she deems necessary, Chairman of Board of Directors shall be able to invite the employees of the Undersecretariat and the Technical Operator and external experts to the meetings in order to take their information and opinions.

Instances of Non-attendance to the Meeting

Article 8 - (1) Members' attendance to all Board of Directors meetings shall constitute the basis. In the event that there is an excuse – which is significant enough not to attend to the meeting, this issue shall be notified to the Board of Directors Chairman and the Technical Operator before the meeting date.

Decisions of Board of Directors and Minutes

Article 9 - Issues shall be addressed and decided upon in the framework of the agenda. Voting shall be made openly and the decisions shall be taken with the similar votes of at least four members. Members – who do not agree with the taken decision – shall explain the reasons behind their opinions in the meeting.

The members shall not be allowed to participate in the meeting and voting related to the issues in relation with themselves, one of their ascendants or descendants, their wives, their relatives by blood and marriage up to the third degree (including this degree).

The board minutes shall be written on condition that they are notary approved and written on book with sequential numbers with their dates and number sequence by keeping the line spaces closed and without any indents. The Board shall be able to make a resolution beforehand on which discussion subjects will be registered in the minutes based on these subjects' significance; and it may also decide on this issue during the meeting. Given decisions, opposite opinions, and the duties and right given to the parties shall be written in a clear way which does not lead to any doubt and hesitation. Each page of the minutes shall be signed by the members who attend to the meeting.

Declaration of Decisions

Article 10 - (1) Decisions of the Board of Directors may only be declared by the Chairman of the Board of Directors, Technical Operator or an authorized member when it is necessary and in line with the decision taken by the Board of Directors regarding this issue.

Obligations of Board of Directors' Members

Article 11 - (1) Board members are obligated to perform their duties with the attention given by a cautious executive and to protect the interests of the Institution by complying with good faith.

(2) Board members are not allowed to disclose the information - which they have learnt due to their title – without the consent or approval of Board of Directors even if they lose their membership title.

Termination of Membership

Article 12 - (1) The duties of the members – who lose the conditions which are required for the appointment, resign, have a constant disorder which prevents them from performing their duties or act in breach of article 11 – shall be terminated with the decision given by the Minister.

Fees and Expenses

Article 13 - (1) A payment – which is in the amount of the monthly fee and other payments that are paid to the board members in the public economic enterprise – shall be made to the members.

(2) Transportation, wage and accommodation costs of experts and relevant organization officials - who are invited to the meeting from the outside – shall be borne by the Institution.

(3) The principles and procedures related to travel costs shall be established by the Board of Directors.

Authorized Signatory

Article 14 - (1) For validity, all kinds of files, documents and agreements - which will be binding and be committed by the Institution – must be signed by two authorized person along with the Institution's full name. Persons – who are authorized to sign on behalf of the Institution – and their authorizations and degrees shall be determined by the Board of Directors.

Running of Institution's Operations

Article 15 - (1) Decisions taken by the Board of Directors, Institution's technical works and works and procedures related to the operation shall be performed by the Technical Operator who is determined in accordance with the article 6 of the Law by the Undersecretariat.

(2) Operation fee – which will be paid to the Technical Operator, Technical Operator's basic duties and obligations, sanctions - which will be implemented in case of breach of the agreement, termination conditions for this agreement and similar issues shall be stipulated in the agreement concluded between the Undersecretariat and the Technical Operator with the purpose of running the works and procedures of the Institution.

(3) In the event that the Institution is appointed with provision of other assurances apart from the Compulsory earthquake insurance, the Technical Operator shall also perform the operations and procedures related to these assurances. The operating fee – which will be paid in relation to these operations - shall be stipulated separately in the agreement.

(4) In order to perform the operations and procedures related to the Institution, Technical Operator shall create a service unit in a different place than its own operation place; appoint the expert personnel to the service unit on full-time basis; and provide the administrative and technical infrastructure which is required in order to run the works and operations of the Institution smoothly. In this framework; other personnel (on full or half time basis), place, office software programmes and technical equipment, stationery and office supplies and other relevant requirements shall be provided by the Technical Operator. If it deems necessary, the Undersecretariat may demand from the Technical Operator to take remedial measures regarding the service unit.

(5) The principles and procedures related to the contacts - which will be established by the Technical Operator via the operations and procedures that it will perform on behalf of the Institution – shall be determined by the Board of Directors. Board members shall be informed by the Technical Operator about all contacts established on behalf of the Institution. For all operations which will put the Institution under financial obligation, primarily, the decision of Board and Directors shall be taken and the Board of Directors shall be informed about the operation process by the Technical Operator. Emergency expenses can be realized by the Technical Operator by taking the approval of the Board of Directors Chairman and with the condition of giving information in the electronic media and being found appropriate by at least four members.

(6) Technical Operator is obligated to conduct its operations carefully, meticulously and by paying attention to the insurance principles. Personnel of the Technical Operator cannot disclose the confidential information and secrets - which they have learnt when performing their duty - or use these information for their own or others' benefits even if they are no longer performing their duties.

Duties of the Technical Operator

Article 16 - (1) Technical Operator performs the basic duties given below::

a) Performance of operational activities via authorized insurance companies and direct sales channels, collection of premiums, loss assessment, indemnity payments and similar operations.
b) Preparation of security plans which will be obtained from capital markets in order to be used for risk transfer, reassurance plans and loss payments; and implementation of these plans by taking approval from the Board of Directors.
c) Guidance of the Institution's funds to investment in the framework of relevant regulations, principles and restrictions stipulated by the Board of Directors. Maintenance of relations with portfolio management companies which are working with the Institution; giving information to the Board of Directors about the operations of portfolio management companies.
d) Conduct of public relations, advertisement, introduction and training campaigns; coordination of the outsourced services related to this subject.
e) Giving information to the Board of Directors about the outsourced services related to the operations of the Institution; realization of goods and services purchase procedures in line with the decisions given by the Board of Directors regarding this issue.
f) Making proposals to the Board of Directors about the issues - which it deems necessary - in terms of performance of Institution's operations.
g) Follow-up and recognition of incomes and expenses of the Institution, and all accounts and operations in special and separate records.
h) Conduct of necessary correspondence with other persons, institutions and organizations on behalf of the Institution; assessment and conclusion of all applications and complaints.
i) Preparation of the Institution's annual activity report until the end of the fourth month following each financial year.
j) Conduct of secretariat services of the Board of Directors.
k) Protection of documents and other files of the Institution in an appropriate way.
l) Preparation of reports demanded by the Undersecretariat.
m) Performance of other duties given by the Board of Directors.

Information Security

Article 17 - (1) Technical Operator cannot use the information, documents, software source codes and technical document details – which it has acquired due to its position - during and after the term of agreement; it cannot share it with third parties and publish it without the consent of the Undersecretariat. In this framework, a confidentiality agreement shall be made with the personnel who will work in the operations of the Institution.

(2) The provisions in the first clause cover the organizations which provide information, equipment, network services, call center and direct sales services on behalf of the Institution, as well. A confidentiality agreement shall be made with organizations which provide these services.

Institution's Head Office

Article 18 - (1) Institution's head office and work address shall be the place - where Technical Operator's head office is located – or the place which is allocated by the Technical Operator by taking the opinion of the Undersecretariat.

Assurances

Article 19 - (1) Compulsory earthquake insurance assurance shall be provided exclusively by the Institution. In the event that the value of independent sections or buildings – that are covered with Compulsory Earthquake Insurance - is higher than the insurance fee - which is calculated within the scope of this insurance, a voluntary earthquake insurance can be provided by the insurance companies for the part that exceeds the insurance fee in question on condition that they already have a Compulsory Earthquake Insurance cover.

(2) The Institution shall be able to provide other insurances and reassurances for natural disasters in the event that the requirements are met, and it is decided by the Cabinet as per the article 7 of the Law.

Reassurance and Other Securities

Article 20 – (1) The Institution shall provide security at the adequate level and as required by the insurance technique from insurance, reassurance and capital markets by taking account of whole obligations arising from the insurance and all of its resources.

(2) The Institution can share its risks with national or international insurance and reassurance markets via retrocession.

(3) In the event that adequate security for the risks assumed by the Institution cannot be obtained from national and international markets with suitable conditions; it can be decided upon the Minister's proposal to undertake some part of it - which will be determined by the Cabinet – by the state in exchange for a suitable amount.

Borrowing

Article 21 – (1) The Institution can borrow money with the approval of the Minister in order to pay the indemnities when deemed necessary, on condition that the borrowed amount does not exceed the total amount of annual premium income.

(2) Disaster bonds – which contain risk transfer – and similar special products shall not be included in the amount to be borrowed.

Loss Assessment

Article 22 – (1) Loss assessments are conducted by insurance loss adjusters who are appointed by the Institution and who have certificates relevant to their branches.

(2) Depending on the size of the loss, the Institution may benefit from technical personnel of other public institutions and organizations and from people who have the necessary training in the relevant departments of universities in cases where the insurance loss adjusters are not adequate in terms of numbers and quality.

(3) In cases of high-scale losses, the Institution can develop loss assessment applications which are simplified by benefiting from technological facilities so that the loss assessments can be done as soon as possible.

Distribution and Sales Channels

Article 23 – (1) The Compulsory earthquake insurance and other insurances – which are provided by the Institution - are offered by the Institution via direct sales or by the insurance companies – which are authorized to conclude insurance agreement on behalf of the Institution – and these companies' agencies.

(2) The insurance company – which provides the Compulsory earthquake insurance - notifies to the insurance holders that their agreement will end before the end of insurance agreement via electronic mail, SMS or call center and that they have to make a new agreement.

(3) The principles – which must be complied by the insurance companies that are authorized to conclude insurance agreement on behalf of the Institution, and their agencies - shall be stipulated in the agreement.

(4) A service can be received from organizations – which are to be detected by the Board of Directors upon taking the opinion of the Undersecretariat - in applications of direct sales made by the Institution.

Checking the Compulsory Earthquake İnsurance

Article 24 – (1) The buildings - which require Compulsory Earthquake Insurance - are established by the Institution. In addition to other resources; the national address database held by the Ministry of Internal Affairs and property tax and city information system records that are kept by the local administrations shall also be taken into consideration when detecting these buildings.

(2)The existence and validity of the Compulsory earthquake insurance are checked in title deed procedures, water and electricity subscriptions and housing loan procedures which are conducted in relation to buildings and independent sections that are covered by this insurance and stated in the article 11 of the Law.

(3) In buildings which are in the scope of Compulsory Earthquake Insurance and whose apartment owners' board is created, the requirement of holding this insurance and renewing it every year shall be reminded in the apartment owners' board meeting. It can be decided by the building's management to hold this insurance pursuant to article 21 of the Property Ownership Law dated 23/6/1965 and numbered 634.

Guidance of Institution Funds to Investment

Article 25 – (1) The principles and procedures related to the guidance of institution funds to investment are determined by the Board of Directors in the framework of principles which are stated below:

a) When guiding the institution funds to investment, diversification is made in terms of investment tools, and liquidation of assets, the lowest level of capital loss risk and high level of yield ratio are taken as basis.
b) In the event that the pending loss – which is by two folds of the annual retention amount of the institution funds – exceeds the total of significant liabilities such as loan and reassurance payment; medium or short term portfolios can be created as much as the part which exceeds this total amount. In accordance with the portfolio term - that is created in this way - the order of priority in the clause (a) can be changed.
c) Institution's funds can be managed by portfolio management companies which are authorized by Technical Operator or Capital Markets Board. Portfolio management company or the Technical Operator are obligated to base their decisions related to the investment of the Institution funds - which they manage – on objective information and documents and to comply with investment restrictions, principles and strategies established by the Board of Directors.
d) Portfolio manager or the Technical Operator cannot make any transactions with the aim of providing benefit to themselves or third parties by using the Institution's funds; they shall be attentive and prudent regarding their orders related to the Institution's funds.
e) Purchase and sale of the publicly-traded securities shall be conducted via stock market. On condition that they will be publicly-traded, money and capital market tool can be obtained from the first discharges.
f) The amount – which can be invested in the capital market tools of a single issuer – cannot exceed 15% of Institution's funds.
g) The amount – which can be invested in the investment fund participation documents that belong to a single promoter - cannot exceed 10% of Institution's funds.
h) Total of premiums and assurances given for by-products that are taken into the portfolio with the aim of making investment or protection from risks - cannot exceed 10% of the portfolio size.
i) Investible foreign borrowing tools – which are issued by the public authorities of the countries determined by the Undersecretariat or by the companies located in these countries - can be taken into the Institution's portfolio. The amount – which can be invested in these tools - cannot exceed 10% of the Institution funds.
j) While choosing the banks in which the time or current deposit will be kept, excluding the public banks, the banks with the highest rate of return among the banks determined as per their capital adequacy and size of their assets shall be evaluated. The deposit kept in a bank cannot exceed 30% of Institution's funds.
ı) Investment in other tools apart from those mentioned in this clause shall be decided by the Board of Directors.

Principles and Procedures for Purchase of Goods and Services

Article 26 – (1) The Board of Directors shall be able to make decision on the purchase of goods and services ex officio or proposed by the Technical Operator with reason. The principles and procedures – which will be implemented during the purchase of goods and services, commission establishment, terms, members and other necessary issues shall be established by the Board of Directors. Terms of reference for the goods and services – which will be purchased - shall be prepared and submitted to the Board of Directors for approval by the Technical Operator. In the event that it is deemed necessary by the Board of Directors, the Undersecretariat's opinions about the terms of reference can be taken.

(2) One of the methods – which are given below - shall be used for the purchase of goods and services:

a) Open tender: Open tender procedure is the method in which all bidders can submit a bid.
b) Provision by restricted tender: This is the procedure in which the persons and organizations that can submit a bid are determined, and then the purchase is made by evaluating the bids submitted by them. In this procedure, it is necessary to invite adequate number of qualified candidates in order to create competition.
c) Direct supply: It is the procedure which can be applied in case of availability of one of the cases given below. In this procedure; goods and services can be supplied directly by making a market study without a need to determine the economical, financial, professional and technical competency.

1) Establishment of the fact that the need can only be met by a natural or legal person.
2) The fact that only the natural or legal person has a special right related to the need.
3) The requirement of purchasing the goods and services – which are required in order to enable the harmony and standardization with available goods, equipment, technology or services - from the natural or legal person - from whom the purchase was made – with agreements that will be prepared in the scope of the original agreement and whose term will not exceed five years.
4) The fact that the price of the goods or services to be purchased is lower than fifty thousand Turkish Liras excluding the Value Added Tax. This amount shall be increased every year as per the re-appraisal rate.

(3) Purchase of goods and services shall be made first-hand with the best conditions as much as it is possible. During the purchase of goods; as well as low prices, meeting the needs of the Institution suitably, payment conditions, presence of required qualities, delivery on time and maintenance conditions shall also be taken into consideration, and the most suitable bid - which has these features - shall be preferred. In service purchase, primarily, technical adequacy and satisfying the needs of the Institution are taken into consideration.

(4) In open tender procedure; during the bidding period, the goods and services – which will be purchased – shall be announced in the official website of the Institution and two of the daily newspapers that are distributed country-wide and that are in top ten in terms of circulation. Bidding period cannot be less than fifteen days as of the announcement date excluding the situations caused by a huge loss or other force majeure.

(5) Documents – showing the economical, financial, professional and technical competency that will be sought for purchase of goods and services – shall be determined with the decision of Board of Directors. However, in any case;

a) Documents showing that the bidder preserves its professional activity, its organization structure, that it employs or will employ adequate number of personnel in order to perform the job, its experience in the announced or similar works,
b) Bidder's financial statement that is compulsory to publish as per the relevant regulations or required sections of its financial statement, its total turnover showing the business volume and works undertaken and completed in relation to the announced work shall be demanded.

(6) A commission shall be created in open tender procedure and provision by restricted tender. The commission shall be composed of relevant institution representatives or experts - whose number will be three or five - in the framework of decision of Board of Directors and as per the nature of the goods and services to be purchased. The costs of the commission's operations shall be borne by the Institution. The commission shall meet in full and the decisions shall be taken by majority. Board members cannot be selected as a member of the commission. The commission shall conduct necessary market and other studies; it shall evaluate the offers and submit its opinion to the Board of Directors.

(7) The commission shall follow the operation principles given below.

a) Bidders shall submit the price offers in the commission meeting – where the bids will be evaluated – along with the necessary documents within separate closed envelopes after the signature bidders or their authorized representatives.
b) The commission shall evaluate the bids with the participation of all bidders. The documents – showing the economical, financial, professional and technical competencies of bidders – are primarily overviewed. If any insufficiency is detected in these documents, the commission shall give an additional time to the relevant person in order to eliminate this insufficiency provided that additional time does not exceed one working day. In such cases, price offers shall be preserved with a report without being opened. Price offers shall be opened on the appointed day with the participation of all bidders. The price offers of bidders – who do not eliminate the insufficiency in their documents – shall not be opened and they shall be left out of the purchase process.
c) Opened price offers shall be read in the meeting and the relevant persons shall be asked to make a new offer via auction by underbidding. This process can be repeated for several times.
d) The report – which is prepared after the evaluation by the commission – shall be submitted to the Board of Directors. Board of Directors reserves the right to decide on the purchase of goods and services.

Prohibitions

Article 27 – (1) The persons listed below cannot participate in purchase of goods and services directly or indirectly or as an sub-contractor by themselves or on behalf of others:

a) Persons who are banned from participation in public tenders indefinitely pursuant to the provisions in the relevant law, and persons who are convicted due to the crimes – which are in the scope of Anti-terrorism Law dated 12/4/1991 and numbered 3713 – and organized crimes,
b) Persons who are established to have declared fraudulent bankruptcy,
c) Members of the Board of Directors, Executives and employees of Technical Operator,
ç) Members of the commission,
d) Wives and blood relatives up to third degree and marriage relatives by second degree, foster children, foster parents of the persons mentioned in the (b), (c) and (d) clauses,
e) Excluding the companies in which persons mentioned in the (b), (c) and (d) clauses are not in the management boards or the companies whose less than 10% share is owned by these persons; the companies in which these persons are a partner, shareholder or a member of the board of directors,
f) Excluding the purchases which will be realized via direct sales method; Technical Operator or natural or legal persons in which the Technical Operator has at least 10% partnership directly or indirectly.

(2) Bidders - who desist from their undertakings and who are detected to have failed to perform their undertakings in accordance with the provisions of the contract and specifications excluding the force majeure – after making a contract with bidders - who do not want to make a contract in accordance with the procedure, though they were given a job beforehand - cannot participate in purchase of goods and services during the period that will be determined by the Board of Directors.

(3) Bidders – who participate in purchase of goods and service despite these prohibitions - shall be left out of the purchase process, and, if any, their tender guarantee shall be registered as revenue. In the event that these features of the bidders are found out after the purchase, if any, their surety shall be registered as revenue and the purchase of goods and services shall be cancelled. If required, the purchase process shall be restarted.

Exceptional Circumstances

Article 28 – (1) The principles and procedures – which will be implemented for the circumstances given below – shall be decided by the Board of Directors:

a) Risk sharing, reassurance plans, purchase of capital market tools with the purpose of protection, and consultancy services related to these subjects.
b) Fund management and consultancy services related to these subjects.
c) Purchase of goods and services related to advertisement, production, introduction, social media, public relations and all kinds of applications related to these subjects, meeting and organization activities.
d) Services related to loss assessment, management and loss adjuster training.
e) Purchase of goods and services for accommodation, travel and other similar goods and services which will be realized in the scope of representation and hosting activities.

(2) Purchase of software, hardware, system, network services and maintenance services - which will be covered by the Institution's resources in the scope of the contract between the Undersecretariat and the Technical Operator - shall be conducted in accordance with direct supply procedure.

(3) In the event that the service provider's performance is adequate in expired service procurement agreements, the Board of Directors may decide on the extension of the agreement with an appropriate price without making a new purchase in order to provide business continuity.

Abolished Regulation

Article 29 – (1) The Regulation about the Operation Principles and Procedures of Turkish Catastrophe Insurance Pool – which was published in the Official Gazette dated 1/12/2001 and numbered 24600 – has been abolished.

Enforcement

Article 30 – (1) This Regulation shall enter into force on 18/8/2012.

Enforcement

Article 31 – (1) The provisions of this Regulation shall be performed by the Minister with whom the Undersecretariat of Treasury is affiliated.