Financial Institution Compliance Officers in Turkey Face Strict AML/CTF Regulations

Introduction

Turkish financial institutions are required to implement strict Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations to comply with international standards. The Turkish Financial Crimes Investigation Board (MASAK), a financial intelligence agency under the Ministry of Finance and Treasury, is responsible for monitoring compliance.

MASAK’s Requirements

To ensure effective implementation, MASAK has set out specific requirements for financial institutions, including:

• Onboarding Principles: Financial institutions must establish clear onboarding procedures to verify the identity of customers.
• Due Diligence Procedures: Institutions must conduct thorough due diligence on customers and maintain records of their transactions.
• Suspicious Transaction Reporting: Financial institutions must report any suspicious transactions to MASAK regardless of value.
• Documentation Standards: Institutions must maintain detailed documentation of all transactions.
• Independent Audits: Regular independent audits are required to ensure compliance with regulations.

Designated parties, such as banks and financial companies, must also notify the Customs administration and maintain detailed records of all transactions.

Reporting Suspicious Transactions

Under Turkish law, financial institutions are required to report any suspicious transactions to MASAK within ten working days of suspicion arising, or immediately in cases where delay would be inconvenient. The compliance officer appointed by the Board of Directors is responsible for reporting suspicious transactions to MASAK.

Financial institutions are prohibited from disclosing information related to Suspicious Transaction Reports (STRs) to anyone except examiners assigned to supervision and courts during judicial proceedings. Those who breach this rule face imprisonment ranging from one to three years and a fine of up to $5,000.

Confidentiality

MASAK emphasizes that financial institutions must avoid mentioning the agency’s name when conducting transactions, as it does not have the authority to approve or cancel transactions under applicable legislation.

Conclusion

By implementing these strict regulations, Turkey aims to strengthen its AML/CTF framework and comply with international standards. Financial institution compliance officers in Turkey face a challenging environment, requiring careful attention to detail and adherence to MASAK’s requirements.