Financial Crime World

Turkey Tightens Sanctions Screening Protocols to Combat Money Laundering

Introduction

Turkey has taken proactive measures to counter the risks posed by money laundering, thanks in part to its strategic geographical location. The nation’s collaboration with international bodies like FATF and the European Union has led to the implementation of stringent AML laws and regulations that align with global standards.

Turkey’s History with AML Efforts

Turkey’s journey in addressing money laundering spans decades. The nation’s initial foray into combating this financial menace dates back to the late 1990s when it adopted its first legislative measures. Over time, Turkey has continually refined its legal framework to align with international standards and respond to evolving risks.

The Core of Turkey’s AML Efforts

The cornerstone of Turkey’s AML efforts is Law No. 5549 on Prevention of Laundering Proceeds of Crime, enacted in 2006. This law outlines the obligations of financial institutions, reporting entities, and supervisory bodies in the fight against money laundering and terrorist financing.

Financial Crimes Investigation Board

Turkey’s Financial Crimes Investigation Board (MASAK) plays a pivotal role in implementing AML regulations, conducting investigations, and sharing intelligence with relevant stakeholders. MASAK operates under the direct supervision of the Ministry of Finance and Treasury.

Key AML Laws in Turkey

  • Law No. 5549 on Prevention of Laundering Proceeds of Crime: Enacted in 2006, this law forms the cornerstone of Turkey’s AML efforts.
  • Turkish Penal Code (Law No. 5237): This code includes provisions that criminalize various forms of money laundering.
  • Banking Law (Law No. 5411): This law sets out regulations for the banking sector, including anti-money laundering provisions.

Government and Regulatory Role in AML

The Ministry of Finance and Treasury holds a central position in coordinating AML efforts. Regulatory agencies like the Banking Regulation and Supervision Agency (BDDK) and the Capital Markets Board (SPK) also play essential roles in supervising financial institutions’ compliance with AML regulations.

Risks Associated with Money Laundering in Turkey

Turkey’s strategic geographical location poses specific money laundering risks, including:

  • Trade-Based Money Laundering (TBML): The misuse of international trade transactions to conceal the origin or destination of funds.
  • Informal Financial Systems: The use of unregulated and unofficial financial systems, such as hawala networks.
  • Real Estate Sector: The potential for money laundering through the purchase and sale of real estate properties.
  • Corruption and Political Instability: The risk of corruption and political instability can create an environment conducive to money laundering.
  • Virtual Currencies and Online Transactions: The use of virtual currencies and online transactions poses a risk of money laundering.
  • Cross-Border Movements: The movement of funds across borders can be used to launder money.
  • Terrorist Financing: The financing of terrorist activities can also involve money laundering.

AML Solutions for Turkey

Sanction Scanner offers tailored solutions that streamline compliance for businesses operating in Turkey. With a deep understanding of Turkey’s regulatory landscape, Sanction Scanner provides AML compliance software designed specifically for the Turkish market.