Financial Crime World

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Turkey Takes Steps to Prevent Money Laundering

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As part of its efforts to combat financial crimes, Turkey has implemented measures to prevent money laundering. According to Law No. 5549, financial institutions and organizations are required to establish anti-money laundering programs to detect and prevent suspicious activities.

Compliance Measures

Obliged entities, such as banks, capital markets intermediary institutions, insurance companies, and pension funds, must create risk-based corporate policies that include:

  • Training for employees on the risks of money laundering and terrorist financing
  • Internal auditing to assess the effectiveness of anti-money laundering programs
  • Control systems to detect and prevent suspicious activities

These policies must also cover:

  • The identification of customers
  • Reporting of suspicious transactions
  • Provision of information and documentation

Penalties for Non-Compliance

Fines of up to TRY 500,000 can be imposed on obliged entities that fail to comply with the requirements. If an entity fails to correct its deficiencies within 30 days, the fine is doubled. In severe cases, MASAK may:

  • Temporarily restrict or suspend an entity’s operations
  • Cancel its authorization license

Board of Directors’ Liability

The board of directors of an obliged entity is also liable for conducting an effective anti-money laundering program. The compliance regulation deems the board responsible and liable for:

  • Appointing a compliance officer
  • Determining the authority and responsibilities of the compliance unit
  • Monitoring the fulfillment of duties within the scope of the program

Conclusion

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In conclusion, companies and investors in Turkey can avoid sanctions and large penalties by maintaining compliance with anti-money laundering legislation and constituting and enforcing corporate policies and procedures. It is crucial for corporations to keep themselves up to date with rapidly changing international and domestic trends and rules regarding money laundering and terrorist financing.