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Turkey’s AML/CFT Regulations: What You Need to Know

The Turkish Financial Crimes Investigation Board (MASAK) is responsible for ensuring that Turkey’s legal system complies with international anti-money laundering and combating the financing of terrorism (AML/CTF) standards. To achieve this goal, MASAK has implemented a range of requirements for financial institutions to comply with.

Key Requirements for AML/CTF Compliance in Turkey

Financial companies operating in Turkey must implement a comprehensive compliance program that includes several key elements:

  • Onboarding principles
  • Due diligence procedures for customers
  • Suspicious transaction reporting procedures
  • Documentation principles for keeping and submitting information
  • The necessity of independent audits
  • Notification to the Customs administration

Financial Institutions Must Perform Due Diligence on Customers

Under Turkish law, financial institutions are required to perform due diligence on their customers, including identifying and verifying customer information. This includes obtaining information about a customer’s:

  • Source of wealth
  • Occupation
  • Other relevant details

Reporting Suspicious Transactions to MASAK

Financial institutions must also report any suspicious transactions to MASAK, regardless of the value of the transaction. The term “transaction” can refer to multiple transactions that are evaluated together as a single Suspicious Transaction Report (STR).

Who is Responsible for Reporting Suspicious Transactions?

The compliance officer appointed by the Board of Directors is responsible for reporting suspicious transactions to MASAK. Reports must be submitted within 10 working days of the suspicion arising, or immediately in cases where any delay would be inconvenient.

What Happens If You Fail to Report a Suspicious Transaction?

Failure to report a suspicious transaction can result in serious consequences, including:

  • Imprisonment ranging from one to three years
  • A fine of up to $5,000
  • Financial institutions that fail to maintain the confidentiality of STRs may also face legal action

How Can Financial Institutions Avoid Confusion About MASAK’s Role?

To avoid confusion, financial institutions should not mention MASAK as a reference when conducting transactions. This is because MASAK does not have the authority or function to approve or cancel transactions under applicable legislation.

By understanding and complying with Turkey’s AML/CTF regulations, financial institutions can help prevent money laundering and terrorist financing while also ensuring that they are in compliance with international standards.