Preventive Measures in Order to Combat Money Laundering

1. Obliged Parties

   
   

Turkish law imposes a set of obligations as preventive measures on parties classified as obliged parties in the fight against money laundering and the financing of terrorism. According to Article 2/d of the Law No. 5549 on the Prevention of Laundering Proceeds of Crime (the “Law”) obliged parties are those who operate in the field of banking, insurance, individual pensions, capital markets, money lending and other financial services, and postal service and transportation, lotteries and bets; those who deal with exchange, real estate, precious stones and metals, jewelry, all kinds of transportation vehicles, construction machines, historical artifacts, works of art, antiques or intermediaries in these operations; notaries, sports clubs.

In addition to above, branches, agencies, representatives, commercial representatives and similar affiliated units located in Türkiye and pertaining to obliged parties whose head offices are abroad be deemed obliged party. Therefore, even if the company or its relevant parent organization is not established in Türkiye, if it operates in Türkiye through various structures, its affiliated units that are resident in Türkiye may still be responsible for fulfilling certain obligations.

2. Preventive Measures

   
   

The preventive measures are principal requirements imposed on institutions and organizations defined as obliged parties under the relevant legislation. However, for the obligations to be effectively triggered, certain conditions and circumstances may need to arise. Therefore, the applicability of a specific obligation in a given case will depend on whether the relevant event triggers it. Principal obligations imposed on obliged parties under Turkish law are as follows:

A) Customer Due Diligence (CDD) Measures 

Pursuant to the Article 3 of the Law, obliged parties are required to verify the identity of individuals conducting transactions, as well as those on whose behalf or for whose benefit the transactions are carried out, before any such transactions take place within or through them. The details related to customer identification are outlined in the Regulation on Measures for the Prevention of Laundering Proceeds of Crime and Financing of Terrorism (the “Regulations on Measures”).

Customer identification shall be completed before the business relationship is established or the transaction is conducted in the following cases: 

• Regardless of the amount, when establishing a continuous business relationship;

•  When the amount of a transaction or multiple related transactions exceeds one hundred eighty-five thousand Turkish Lira;

• In the case of electronic transfers and crypto asset transfers conducted by crypto asset service providers, when the amount of a transaction or multiple related transactions exceeds fifteen thousand Turkish Lira;

• Regardless of the amount, in cases that require a suspicious transaction report;

•  Regardless of the amount, when there is doubt about the adequacy or accuracy of previously obtained customer identification information.

  
  

B) Suspicious Transaction Reports

If there is any information, suspicion, or reasonable cause to believe that the asset involved in a transaction conducted or attempted through or within obliged parties has been obtained illegally or is being used for unlawful purposes, the obliged parties are required to report such transactions to Financial Crimes Investigation Board.

C) Obligation to Not Disclose Suspicious Transaction Reports

According to the Article 4/2 of the Law, obliged parties cannot disclose to anyone, including those involved in the transaction, that a suspicious transaction report has been made to the Financial Crimes Investigation Board Presidency, except for the audit personnel assigned for compliance inspection and the courts during prosecution. 

Additionally, obliged parties shall in no way provide information to their head offices abroad or to their branches, agencies, representatives, commercial proxies, or similar affiliated units that a suspicious transaction report has been filed regarding a customer.

D) Establishment of a Compliance Program

Training, internal control and risk management systems, along with other necessary measures, must be implemented by the obliged parties. The details regarding this matter are regulated under the Regulation on Program of Compliance with Obligations of Anti-Money Laundering and Combating the Financing of Terrorism (the “Regulations on Compliance”).

E) Assignment of Compliance Officer

Some of the obliged parties are required to assign a compliance officer within specified timeframes. These compliance officers will have certain duties and responsibilities. The principles and procedures of assignment of compliance officers are laid down in the Regulations on Compliance.

F) Providing Information and Documents

Pursuant to the Article 7 of the Law, obliged parties must, upon request by Financial Crimes Investigation Board or examiners, submit all types of information, documents, and related records in any format, along with any information and passwords required to fully and accurately access or retrieve these records, and must provide the necessary assistance.

G) Retaining and submitting

According to the Article 8 of the Law, obliged parties are required to retain documents, books, records, and identification documents related to their transactions and obligations under the Law for eight years, starting from the date they were prepared, the date of the last record, or the date of the last transaction, as applicable. These must be provided upon request. For documents related to customer identification for accounts held by obliged parties, the retention period begins from the account closure date.

H) Periodically Reporting

Obliged parties are required to report to Financial Crimes Investigation Board any transactions they are involved in or facilitate that exceed the amount determined by the Ministry of Treasury and Finance.

I) Receiving electronic notifications made by Financial Crimes Investigation Board through the system established by Financial Crimes Investigation Board Presidency

Pursuant to the Article 9/A of the Law, notifications made under the Law and Law No. 6415 on the Prevention of the Financing of Terrorism (the “Law numbered 6415”) may be submitted electronically, and responses may also be requested electronically, regardless of the electronic notification procedures outlined in the Article 7/A of Notification Law No. 7201.

According to the Regulation Regarding Principles and Procedures on Technical Infrastructure of Electronic Notification System (the “Regulations on Notification”) notifications to be made by Financial Crimes Investigation Board upon the Law and the Law numbered 6415 to banks, capital market intermediaries, financial leasing, factoring and financing companies, insurance and pension companies, portfolio management companies, Central Securities Depository and the Post and Telegraph Organization Company should be made in electronic environment. Furthermore, other obliged groups mentioned in the Article 2(1)(d) of the Law may apply to Financial Crimes Investigation Board for receiving e-notification, and if Financial Crimes Investigation Board approves, they may receive e-notification.

1. Conclusion 

   
   

As mentioned at the beginning, in Türkiye, to prevent money laundering, certain key sectors, institutions, and organizations defined as obliged parties in the legislation are assigned the obligations outlined above in the laws and regulations. In addition to the above, there are also certain international obligations that the obliged parties are subject to, and also precautionary obligations such as to take measures against technological risks, exercise special attention, and implement additional measures in high-risk and similar situations. 

In conclusion, it is important for companies and organizations to determine whether they qualify as obliged parties under Türkiye’s anti money laundering regulations and to fulfill their obligations if applicable. Failure to comply with these obligations may result in administrative fines at varying rates and/or judicial penalties.