Turkey’s Strict Measures to Combat Money Laundering: Financial Institutions Must Take Note
In an effort to curb money laundering and terrorist financing, Turkey has implemented stringent measures for financial institutions operating in the country. These regulations aim to enhance due diligence and prevent illicit activities from occurring.
Enhanced Due Diligence for Politically Exposed Persons (PEPs)
Financial institutions are now required to take enhanced due diligence measures when dealing with PEPs. This includes:
- Obtaining senior management approval before conducting transactions with PEPs
- Verifying their identity, source of funds, and purpose of transaction
- Conducting ongoing monitoring of these transactions and reporting any suspicious activities to the authorities
Correspondent Banking Relationships: Enhanced Due Diligence Standards
Financial institutions entering into correspondent banking relationships must adhere to enhanced due diligence standards. This includes:
- Verifying the identity and reputation of the correspondent bank
- Conducting regular reviews of their relationship
Risk-Based Approach to Customer Identification
Turkey’s regulations emphasize a risk-based approach to customer identification, requiring financial institutions to assess the level of risk associated with each customer before conducting transactions. This includes:
- Verifying the accuracy of information provided by customers
- Monitoring their transactions for suspicious activity
Identification Documentation Requirements
Financial institutions are required to verify the identity of their customers using original or certified copies of:
- National identification cards
- Passports
- Driving licenses
- Residency permits
Additionally, trade gazettes and signature circulars must be stamped by:
- Chambers of Commerce
- Public notaries
Regulatory Oversight
The Undersecretariat of Treasury and the Ministry of Finance are responsible for overseeing compliance with Turkey’s anti-money laundering regulations. Financial institutions that fail to comply with these regulations may face severe penalties, including:
- Fines
- Revocation of their operating licenses
In conclusion, financial institutions operating in Turkey must be aware of the strict measures in place to combat money laundering and terrorist financing. By understanding these regulations and implementing them effectively, institutions can help maintain the integrity of the financial system and prevent illicit activities from occurring.