Financial Crime World

Compliance Program Requirements in Turkey

Obliged Entities Must Establish a Compliance Program

According to the Turkish Anti-Money Laundering Law, financial institutions must establish a compliance program that includes measures for preventing money laundering and financing terrorism. The Ministry is responsible for overseeing these programs.

Obliged Entities

The following entities are required to create a compliance program:

  • Banks: Must implement anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.
  • Capital market intermediary institutions: Must ensure that their activities do not facilitate money laundering or terrorist financing.
  • Insurance and pension companies: Must establish AML/CFT procedures to prevent financial crimes.
  • Post and Telegraph Corporation Joint Stock Company (limited to banking activities): Must implement AML/CFT measures.
  • A Group of authorized institutions specified in the Foreign Exchange Legislation: Must comply with AML/CFT regulations.
  • Finance, factoring, and financial leasing companies: Must establish AML/CFT procedures.
  • Portfolio management companies: Must prevent money laundering and terrorist financing.
  • Precious metals intermediary institutions: Must implement AML/CFT measures.
  • Electronic money institutions: Must comply with AML/CFT regulations.
  • Payment institutions: Must establish AML/CFT procedures.

Compliance Program Components

A compliance program must include the following components:

Institutional Policy

Develop policies and procedures for preventing money laundering and financing terrorism. This includes:

  • Establishing clear AML/CFT guidelines
  • Defining roles and responsibilities
  • Implementing customer due diligence (CDD) procedures
  • Conducting regular risk assessments

Training Activities

Provide education and training to employees on the compliance program and its requirements. This includes:

  • Initial training for new employees
  • Ongoing training for existing employees
  • Regular refresher courses
  • Providing access to AML/CFT resources and guidance

Monitoring and Control

Conduct regular checks to ensure that transactions are in line with customer profiles and risk policies. This includes:

  • Conducting transaction monitoring
  • Identifying and reporting suspicious activity
  • Implementing sanctions screening
  • Conducting regular audits and reviews

The Compliance Officer

The Compliance Officer is appointed by the Board of Directors or one or more members delegated authority.

Qualifications

The Compliance Officer must meet specific qualifications, including:

  • Being a citizen of Turkey
  • Holding at least a bachelor’s degree from a four-year higher education institution
  • Having at least five years of experience as a manager, expert, or auditor at a financial institution

Conclusion

A compliance program is essential for preventing money laundering and financing terrorism. The Ministry oversees these programs to ensure that they are properly implemented. By establishing a robust compliance program, financial institutions can mitigate the risk of AML/CFT and maintain their reputation as trustworthy and responsible members of the financial community.