Turkey Takes Stricter Stance on Anti-Fraud Training for Financial Institutions
In a bid to combat financial crimes, Turkey has been intensifying its efforts to ensure that financial institutions adhere to strict anti-fraud training regulations. The move comes as part of a broader effort to prevent money laundering and terrorism financing.
Turkey’s Efforts Against Money Laundering and Terrorism Financing
The Turkish Republic has made significant strides in establishing anti-money laundering regulations and mechanisms for detecting and countering these crimes over the years. In 1996, Turkey prosecuted its first case of money laundering as a financial crime, marking a turning point in its approach to combating financial fraud.
Since then, relevant laws and regulatory control mechanisms have expanded in breadth, quality, and efficacy. The government, along with financial and non-financial organizations, is now subject to various requirements aimed at preventing the illegal trade of drugs, weapons, and artifacts, as well as financing terrorism, counterfeiting, and human trafficking.
Common Types of Financial Crimes
Financial crimes often involve the purchase of high-value items like gold, real estate, and expensive automobiles, as well as international money smuggling or bank transfers. These transactions are typically classified as suspicious and must be documented in accordance with Financial Crimes Investigation Board regulations.
Who Needs to Comply with Anti-Money Laundering Regulations?
In addition to banks, fintechs, insurance providers, and other financial institutions, non-bank entities such as wealth management firms are also required to comply with anti-money laundering regulations.
What is an AML Compliance Program?
An Anti-Money Laundering (AML) compliance program is a set of internal processes designed to identify, address, and prevent money laundering or terrorism financing. The program includes guidelines for user processing, account monitoring, detection, and reporting of suspicious transactions.
Turkey’s AML Compliance Program Requirements
Turkey’s anti-money laundering regulations require financial institutions to establish and maintain risk-based AML compliance programs. The regulations specify the requirements for these programs, including:
- Corporate policies and procedures
- Risk management
- Monitoring and controlling
- Training activities
- Internal control operations
Components of an AML Compliance Program
The scope of an AML compliance program includes developing corporate policies and procedures, performing risk management, monitoring and controlling transactions, designating a compliance officer, carrying out training activities, and performing internal control operations. Compliance officers are responsible for monitoring and supervising operations, as well as risk management.
Training Activities
Financial institutions are required to create a training policy that covers topics such as:
- How training will be carried out
- Who will be in charge of conducting training
- How workers and trainers will be selected to engage in training activities
The goal of training is to ensure that employees understand their roles and responsibilities under Turkish anti-money laundering law.
Conclusion
In light of these regulations, financial institutions subject to the Anti-Money Laundering Act are required to set up and carry out risk-based compliance plans commensurate with the scope and scale of their operations. Failure to comply with AML regulations can result in administrative sanctions and harm to an institution’s reputation.