Financial Crime World

Turkish Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) Regulatory Framework

The Turkish AML/CFT regulatory framework is governed by the Law on Prevention of Laundering Proceeds of Crime and Financing Terrorism (Law No. 5549), enacted in 2006, and subsequent regulations issued by the Ministry of Finance.

Key Requirements

  • Customer Due Diligence: Financial institutions must conduct customer due diligence, including verifying the identity of customers, determining the purpose and nature of business relationships, and obtaining information about the customer’s profession, commercial activities, business history, financial status, risk profile, and sources of funds.
  • Risk-Based Approach: Financial institutions are required to follow a risk-based approach when conducting transactions outside of permanent business relationships, establishing appropriate risk management systems for this purpose.
  • Obliged Parties: The Undersecretariat of Treasury is responsible for supervising and monitoring the implementation of AML/CFT measures by obliged parties, including financial institutions.
  • Reporting Obligations: Financial institutions are required to report suspicious transactions and other information related to money laundering or terrorist financing to the relevant authorities.

Electronic Signature Legislation

Turkey has implemented electronic signature legislation based on the UNCITRAL model law. According to Article 5 of this law, an advanced electronic signature is a qualified electronic signature that has been issued by a trusted service provider. Advanced electronic signatures have the same legal effect as handwritten signatures.

FATF Mutual Evaluation

The Financial Action Task Force (FATF) conducted its mutual evaluation of Turkey in 2012, which identified several areas for improvement related to AML/CFT measures and recommendations for addressing these weaknesses.

Regulatory Acronym

The regulatory acronym for the Turkish AML/CFT framework is BRSA (Banking Regulation and Supervision Authority).

National ID Card Details

In Turkey, every citizen has a national ID card from birth. The Turkish ID card is compulsory for all Turkish citizens.

Practical Guidance

  • Financial institutions in Turkey are required to follow a risk-based approach when conducting transactions outside of permanent business relationships.
  • They must establish appropriate risk management systems for this purpose.
  • Obliged parties, including financial institutions, are monitored and supervised by the Undersecretariat of Treasury.
  • Financial institutions are required to report suspicious transactions and other information related to money laundering or terrorist financing to the relevant authorities.

Key Restrictions

There are no critical exceptions to the law.