Financial Crime World

Turkey Cracks Down on Money Laundering as Global Threat Looms Large

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Turkey, a country with a high susceptibility to narcotics trafficking, has been grappling with the issue of money laundering for years. To combat this growing threat, Turkey has introduced several new laws to enhance its anti-money laundering (AML) framework.

Money Laundering Techniques in Turkey

Banks and non-bank financial entities are frequently used for money laundering in Turkey, with techniques including:

  • Cross-border cash smuggling
  • Bank transfers into and out of the country
  • Purchasing expensive goods like real estate, gold, and high-end cars

Turkey’s Anti-Money Laundering Laws

In 1996, Turkey made money laundering a crime for the first time through Law No. 4208, which included a wide range of predicate offenses such as:

  • Drug-related crimes
  • Weapons and artifact smuggling
  • Terrorism
  • Document forgery
  • Human trafficking

The law also introduced penalties for money laundering, including:

  • Imprisonment from two to five years
  • A monetary fine equal to double the amount laundered
  • Asset forfeiture

Enhancements to Turkey’s Anti-Money Laundering Framework

In 2004, Turkey passed new anti-money laundering regulations, criminal laws, and criminal procedural laws. The new Criminal Law, which came into effect in June 2005, expanded the definition of money laundering to include all predicate offenses carrying a one-year jail sentence.

The Prevention of Laundering the Proceeds of Crime (No. 5549), passed in October 2006, amended and enhanced Turkey’s anti-money laundering legislative framework. The Law on the Prevention of the Funding of Terrorism (No. 6415), passed in February 2013, expanded the definition of terrorist financing offenses and gave authorities additional legal authority to prosecute cases of alleged terrorist financing.

Financial Crimes Investigation Board (MASAK)

Turkey has also established MASAK as a primary reporting body to monitor and prevent money laundering.

Penalties for Money Laundering in Turkey

Under Turkish law, money laundering is defined as sending or using money obtained through criminal activity overseas or hiding its illicit sources. These offenses are punishable by:

  • A court fine up to 20,000 days
  • Imprisonment from three to seven years

Legal entities involved in money laundering can face penalties, although they are not criminally culpable. The board of directors may be held liable for failing to comply with anti-money laundering laws.

International Influences and Measures

Turkey’s efforts to combat money laundering have been influenced by international treaties and concepts. The country has implemented a range of measures to prevent money laundering, including:

  • Recognizing clients and beneficial owners
  • Revealing suspicious transactions
  • Providing continuous information
  • Documenting transactions

Compliance with Domestic and International Laws

To avoid penalties or sanctions, businesses and investors in Turkey must comply with domestic and international laws and regulations. With its unique geopolitical situation and Judicial Reform Strategy for 2019-2023, Turkey is expected to take a proactive approach to combat money laundering.