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Financial Group Institutions Must Share Information to Ensure Anti-Money Laundering Measures
In a bid to strengthen anti-money laundering measures, institutions affiliated with Turkey-based financial groups must share information within the group to ensure effective recognition of customers and transactions.
According to new regulations, obliged entities, which include banks, capital market intermediary institutions, insurance companies, and others, are required to create a compliance program to prevent money laundering and financing of terrorism. The program must be developed based on a risk-based approach and include measures such as the establishment of institutional policies and procedures, conducting risk management activities, monitoring and control activities, appointment of a compliance officer, and execution of training and internal audit activities.
Who Must Create a Compliance Program?
The obliged entities listed in the Regulation are required to create a compliance program. These institutions include:
- Banks (excluding the Central Bank of Turkey and development and investment banks)
- Capital market intermediary institutions
- Insurance companies
- Post and Telegraph Corporation Joint Stock Company (limited to banking activities)
- Authorized institutions specified in Foreign Exchange Legislation
- Finance, factoring, and financial leasing companies
- Portfolio management companies
- Precious metals intermediary institutions
- Electronic money institutions
- Payment institutions (excluding those exclusively providing intermediary services for invoice payments)
Components of a Compliance Program
The compliance program consists of several measures, including:
- Establishment of institutional policies and procedures
- Conducting risk management activities
- Carrying out monitoring and control activities
- Appointment of a compliance officer and establishment of a compliance unit
- Execution of training activities
- Execution of internal audit activities
Institutional Policies and Procedures
The institutional policy is designed to ensure compliance with anti-money laundering regulations and evaluate customers, transactions, and services based on a risk-based approach. The policy must be developed in line with the compliance program and take into account factors such as business volume, nature of operations, and size of the business.
Risk Management Activities
Obliged parties are required to establish a risk management policy within the institutional policy framework. The policy aims to identify, assess, monitor, evaluate, and mitigate risks that may be exposed to the institution.
Monitoring and Control Activities
Monitoring and control activities refer to continuous supervision of whether the activities of obliged parties comply with institutional policies and procedures. Examples of these activities include:
- Monitoring high-risk customers and transactions
- Transactions with risky countries
- Complex and unusual transactions
- Others
Appointment of a Compliance Officer
The compliance officer is responsible for implementing the compliance program and must be exclusively appointed as an institution’s employee. The compliance officer may also have other duties that do not impede the execution of the compliance program.
Conclusion
The sharing of information within affiliated institutions of financial groups is crucial to ensure effective anti-money laundering measures are taken at the group level. By creating a compliance program, obliged entities can prevent money laundering and financing of terrorism, thereby maintaining trust in the financial system.