Financial Crime World

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Turkey Takes Measures to Ensure Financial Stability Amidst Global Threats

Istanbul, Turkey - In an effort to safeguard the country’s financial system and maintain public trust, Turkish regulators have implemented stringent measures to combat money laundering, terrorist financing, and ensure depositor protection.

Corporate Governance

Under the Regulation on Corporate Governance, bank directors and senior managers are required to ensure that remuneration policies align with:

  • Ethical values
  • Strategic objectives
  • Internal balances of the bank

Additionally, Turkish banks must establish a remuneration committee to oversee compensation practices.

Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT)

Turkey has strengthened its AML/CFT regulations in line with international standards set by the Financial Action Task Force (FATF). The country’s AML/CFT framework is governed by Law No 5549 on the Prevention of Laundering Proceeds of Crime, which defines roles and tasks for key players, including:

  • Banks
  • Designated non-financial organisations
  • Government agencies

Financial institutions are now required to have a designated officer responsible for managing AML/CFT processes, including:

  • Risk evaluations
  • Personnel training

Organisations must also develop internal checks to determine the effectiveness of their AML/CFT procedures.

Bilateral Agreements and Global Cooperation

To enhance global cooperation, Turkey has established bilateral agreements with multiple nations to share data and collaborate on cases. The country is also a member of several intergovernmental groups and projects aimed at improving worldwide AML and combating CFT activities.

Depositor Protection Framework

The Banking Regulation and Supervision Agency (BRSA) oversees the depositor protection framework under Banking Law in Turkey, ensuring the stability and integrity of the banking system and protecting depositors’ rights. The BRSA has implemented a comprehensive depositor protection regime, which safeguards deposits up to TRY400,000 per depositor at each bank.

The scheme is funded from various sources, including:

  • Contributions from banks
  • Recovery efforts from failed banks
  • Investments
  • Loans

The BRSA also enforces the provisions of the depositor protection scheme and takes appropriate measures to protect depositors’ interests.

Enforcement and Sanctions

The BRSA has the authority to enforce the provisions of the depositor protection regime and impose sanctions on banks that fail to comply, including:

  • Financial penalties
  • Restrictions on banking activities
  • Disciplinary actions against bank executives and board members

These enforcement measures ensure the effectiveness and integrity of the depositor protection scheme.

Conclusion

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By implementing these stringent measures, Turkey is demonstrating its commitment to global best practices in financial regulation and supervision. The country’s deposit insurance system has been praised for its robust safeguards against potential risks, bolstering both depositor trust and financial stability.