Financial Crime World

Know Your Customer Due Diligence in Turkey: A Guide to Compliance

Turkey’s financial services sector is subject to strict regulations regarding Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines. In this article, we will explore the legal framework governing AML and KYC in Turkey, including the national regulatory framework, national regulator or relevant authority, money laundering as a crime, customer due diligence, and outsourcing of KYC.

National Regulatory Framework

Turkey’s anti-money laundering laws are governed by several different regulations, including:

  • Turkish Criminal Law No. 5237
  • Law on the Prevention of Laundering of Crime Revenues No. 5549
  • Regulation on Measures to Prevent Money Laundering and Terrorist Financing
  • Others

National Regulator or Relevant Authority

The Financial Crimes Investigation Board (MASAK) is responsible for monitoring and investigating money laundering offenses in Turkey. Obliged parties, such as banks and financial institutions, are required to report suspicious transactions to MASAK and provide relevant information upon request.

Money Laundering as a Crime

Money laundering is punishable under Article 282 of the Turkish Criminal Law No. 5237. Public prosecutors have the authority to investigate money laundering offenses and may conduct investigations directly or through law enforcement authorities.

Customer Due Diligence

Conducting a typical KYC identification process involves verifying the identity of customers using accepted documents such as:

  • ID cards
  • Passports
  • Other identification methods

Remote identification methods can also be used if permitted by legislation.

Outsourcing of Customer Due Diligence

Obliged parties may outsource customer due diligence to third-party providers who are not obliged by law to meet AML regulations. However, it is recommended that sector-specific regulations be consulted before outsourcing KYC.

Entities That Can Be Relyed Upon as Third Parties

The following entities can be relied upon as third parties to comply with AML regulations:

  • Credit institutions
  • Financial institutions
  • Auditors, external accountants, and tax advisors
  • Notaries and other independent legal professionals
  • Other trust or company service providers
  • Estate agents
  • Providers of gambling services
  • Insurance, reinsurance, and pension companies, and insurance and reinsurance brokers
  • Crypto asset service providers
  • Dealers of high-value goods
  • Auctioneers of historical artifacts, antiques, and works of art
  • Sports clubs

By understanding the requirements for AML and KYC in Turkey, financial institutions and other obliged parties can ensure compliance with regulations and prevent money laundering offenses.