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Turkey’s Financial Intelligence Unit Tightens Know Your Customer Regulations

In a move to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts, Turkey’s Financial Crimes Investigation Board (MASAK) has updated its regulations to comply with international standards set by the Financial Action Task Force (FATF).

Expanding Scope of Obliged Parties

The new regulations have expanded the scope of obliged parties to include:

  • Group A authorized institutions
  • Finance, factoring and leasing companies
  • Precious metals intermediary institutions
  • Asset management companies
  • Electronic money institutions
  • Payment institutions

Exceptions are provided for certain entities that provide intermediary services exclusively for invoice payments or other specific transactions.

Compliance Program Requirements

MASAK’s new regulations require obliged parties to establish a compliance program at the financial group level, which must include:

  • Appointment of a compliance officer and assistant
  • Internal controls
  • Risk management activities
  • Monitoring follow-up

The regulation also specifies that the board of directors of the parent financial institution is responsible for overseeing the implementation of the compliance program.

Increased Transaction Limits

The new regulations have increased the threshold for customer identification to transactions of 75,000 Turkish Lira (TL) and above, up from 20,000 TL previously. Similarly, the threshold for electronic transfers has been raised to 7,500 TL and above, up from 2,000 TL previously.

Identification of Ultimate Beneficial Ownership

The new regulations require obliged parties to identify partners with more than 25% share of the legal person customer to recognize the real beneficiary. Additionally, MASAK has introduced a provision allowing confirmation of information obtained from foreign legal person partners through official sources open to the public in the relevant country.

MASAK Audits and Sanctions

MASAK will conduct liability audits on obliged parties, which can be carried out on-site or remotely. If violations are found, MASAK may impose:

  • Administrative fines ranging from 500,000 TL to twice the initial fine
  • Restrictions or cancellation of licenses

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