Turkey’s Financial Institutions Face Scrutiny Under Anti-Money Laundering Laws
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In an effort to combat financial crimes, Turkey’s financial institutions are under increasing pressure to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. At the forefront of this effort is the Turkish Financial Crimes Investigation Board (MASAK), a financial intelligence agency responsible for monitoring and preventing money laundering and terrorist financing activities.
Complying with International Standards
To ensure compliance with international standards, MASAK requires financial institutions to establish robust AML/CTF programs that include:
- Onboarding principles
- Due diligence procedures
- Suspicious transaction reporting mechanisms
- Documentation guidelines
- Independent audits
- Notification requirements
Designated parties, including financial companies, must also perform due diligence on customers, disclose suspected transactions to MASAK, and maintain records for inspection.
Reporting Suspicious Transactions is a Key Compliance Requirement
One of the most critical components of AML/CTF compliance in Turkey is reporting suspicious transactions to MASAK. This requirement applies regardless of transaction value, and multiple transactions can be reported together using a single Suspicious Transaction Report (STR) form. The term “transaction” encompasses any series of related transactions.
- Financial institutions must report suspicious transactions within 10 working days of suspicion arising, or immediately if delay would be inconvenient.
- Internal reporting time is taken into account when calculating the deadline.
- The compliance officer appointed by the Board of Directors is responsible for submitting STRs to MASAK.
Secrecy Surrounds Suspicious Transaction Reporting
To prevent leaks and maintain the integrity of the investigation process, financial institutions are prohibited from disclosing information about suspicious transactions or internal reports to anyone, including parties involved in the transaction. Failure to comply with this rule can result in imprisonment ranging from one to three years and a fine of up to $5,000.
Conclusion
MASAK’s role is crucial in Turkey’s fight against financial crimes, and its efforts are geared towards ensuring that the country’s legal system complies with international AML/CTF standards. Financial institutions must remain vigilant in their compliance efforts to avoid sanctions and maintain a reputation for integrity.