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Risk and Compliance Management Obligations in Turkey
The Turkish regulatory landscape for risk and compliance management has distinct differences between the public sector and the private sector. This article provides an overview of the key statutory and regulatory requirements governing each sector.
Public Sector Risk and Compliance Management
In Turkey, public administrations and state-owned enterprises are subject to specific regulations regarding risk and compliance management. The main requirement is stipulated by the Code on the Public Financial Administration and Control, as well as subsequent secondary legislation, which mandates the establishment of an internal control system that includes:
- Internal Audit: Regular audits to ensure transparency and accountability in financial transactions.
- Risk Management Functions: Identification, assessment, and mitigation of risks that could impact the organization.
Private Sector Risk and Compliance Management
The Turkish Commercial Code (TCC) governs corporate governance and risk management in private companies. Key requirements include:
- Board of Directors’ Policies: Adoption of policies for managing risks and ensuring compliance with applicable laws and regulations.
- Liability Allocation: Clear allocation of liability among board members and senior management for breaches of regulatory obligations.
- Administrative Monetary Fines: Imposition of administrative monetary fines for non-compliance with TCC requirements.
Digital Transformation in Risk and Compliance Management
While there is no specific framework covering digital transformation in Turkey’s risk and compliance management landscape, entities are expected to implement best practices and comply with relevant laws and regulations regarding:
- Data Privacy: Protection of personal data and adherence to regulatory guidelines.
- Data Security: Implementation of robust security measures to prevent unauthorized access or breaches.
Key Differences between Public and Private Sectors
The main differences between public and private sectors lie in the scope of application (public sector focuses on financial transactions, while private sector deals with general compliance issues) and the specific laws that govern each sector. Understanding these differences is crucial for entities to navigate Turkey’s risk and compliance management landscape effectively.