Financial Crime World

Turkey Introduces KYC Requirements for Independent Attorneys

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The Law Proposal on Preventing the Proliferation of Financing Weapons of Mass Destruction has been accepted by the Grand National Assembly of Turkey and is expected to be published in the Official Gazette with the law number 72622.

Scope in Terms of Independent Attorneys

With the recent amendment, independent attorneys will be deemed an “obliged party” and thus be obliged to conduct Know Your Client (KYC) checks before transactions. The scope includes:

  • Purchase and sale of real estate
  • Establishment and abolition of limited real rights
  • Incorporation, merger, management, assignment and liquidation of companies, foundations and associations, and financial transaction with respect to such
  • Management of banks, security, and all sorts of accounts along with assets in these accounts

The foregoing scope excludes:

  • Information obtained with respect to the first paragraph of Article 35 of the Attorney Law No. 1136 (i.e., judicial information)
  • Information which is already available through other sources.

Reporting of Suspicious Activities

In case there is any information, suspicion, or reasonable grounds to suspect that the asset, which is subject to the transactions carried out or attempted to be carried out within or through the obliged parties, is acquired through illegal ways or used for illegal purposes, independent attorneys will also be under the obligation to report such activities to MASAK as obliged parties.

Suspicious Transaction

Suspicious transaction is the case where there is any information, suspicion, or reasonable grounds to suspect that the asset, which is subject to the transactions carried out or attempted to be carried out within or through the obliged parties, has been acquired through illegal ways or used for illegal purposes and is used, in this scope, for terrorist activities or by terrorist organizations, terrorists, or those who finance terrorism.

Content, Verification, and Retention

Information to be obtained for KYC and the verification of such information varies depending on the person concerned, such as real persons, legal entities registered in trade registries, legal entities resident abroad, etc. For instance:

  • Name, surname, birth place and date, parents’ name, nationality, Turkish ID number for Turkish citizens
  • Identity certificate type and number

Independent attorneys should keep documents on customer identification for eight (8) years as of the last transaction date and provide these documents upon request of the authorized bodies.

Sanctions

In case of failure to fulfill the obligation on client identification, non-compliance may be subject to an administrative fine of 30,000 Turkish Liras. Failure to comply with the obligation to report suspicious transactions may be subject to an administrative fine of 50,000 Turkish Liras, with the new amendment.

Article Contact: Gönenç Gürkaynak, Esq. Email: gonenc.gurkaynak@elig.com

(First published by Mondaq on December 31, 2020)