Anti-Money Laundering (AML) in Türkiye

An extensive framework addressing anti-money laundering (AML) and countering the financing of terrorism (CFT) has been established in Turkey. The legal framework, regulatory responsibilities, sector-specific requirements, and recent advancements are all covered in detail in this guide to AML regulations in Turkey.

What Is Anti-Money Laundering in Türkiye?

A series of steps aimed at preventing and lessening financial crimes is known as anti-money laundering, or Kara Para Aklamayı Önleme (KPAÖ) in Turkish. Law No. 5549 enshrines these rules, and the Financial Crimes Investigation Board (Mali Suçları Araştırma Kurulu, or MASAK) is in charge of enforcing them.

The following types of organisations are subject to AML regulations in Turkey: banks and financial service providers, payment and electronic money institutions, and cryptocurrency platforms (as of 2021). 

Jewellers, accountants, solicitors, and notaries are examples of designated non-financial businesses and professions (DNFBPs).

Türkiye aims to strike a balance between financial oversight and upholding an open, business-friendly environment through this institutional and legal framework.

Legal Framework for AML in Türkiye

AML compliance in Turkey is derived from a number of laws and rules. An outline of the essential elements is provided below:

The Prevention of Laundering Proceeds of Crime Law No. 5549

This law, which serves as the cornerstone of AML in Turkey, describes the steps necessary to stop and keep an eye on money laundering; covering entities to follow a number of anti-money laundering procedures, such as identifying customers and disclosing suspicious transactions.

Article 282 of the Turkish Penal Code 

Money laundering is defined as a criminal offence in Article 282 of the Turkish Penal Code, while also outlining the punishments for those found guilty of laundering the proceeds of crime, which include imprisonment for two to seven years.

Regulation of Actions to Prevent the Laundering of Criminal Proceeds and the Financing of Terrorism

Customer due diligence and enhanced due diligence for high-risk situations are among the operational requirements for compliance outlined in this extensive regulation.

Presidential Decree No. 1 (2018)

MASAK, Turkey's main financial intelligence agency, is given specific authorities, powers, and operational duties by Presidential Decree No. 1 (2018).

Key Regulatory Bodies in Türkiye

Several regulatory bodies oversee and enforce AML initiatives in Turkey:

MASAK (Financial Crimes Investigation Board) 

The main organisation in Turkey tasked with fighting money laundering (AML) and upholding associated laws is MASAK. Analysing reports of suspicious transactions, performing compliance audits across different organisations, and suggesting sanctions or fines for non-compliance are some of its main duties. In addition to enforcing the law, MASAK is essential in formulating regulations and working with foreign organisations to fortify Turkey's anti-money laundering system.

Banking Regulation and Supervision Agency (BDDK) 

All Turkish banks and credit organisations are subject to the BDDK's supervision of AML compliance. Ensuring that these organisations follow stringent financial regulations protects the banking industry's integrity and lowers the possibility of financial crimes.

Capital Markets Board (SPK) 

The SPK is in charge of keeping an eye on AML compliance in Turkey's financial markets, like keeping an eye on organisations like broking houses, investment firms, and portfolio managers.

Central Bank of Türkiye (TCMB) 

TCMB creates and implements AML regulations for e-money providers and payment institutions, oversees monetary policy, also aims to stop financial crimes in the expanding field of digital payments.

Public Oversight, Accounting, and Auditing Standards Authority (KGK) 

To guarantee adherence to AML regulations, the KGK oversees designated non-financial businesses and professions (DNFBPs), including accountants, solicitors, and real estate brokers. The authority is essential in expanding AML initiatives beyond conventional financial institutions to include high-risk industries that are vulnerable to money laundering.

AML Requirements in Türkiye

Four key operational pillars support AML compliance in Turkey.

1. Customer Due Diligence (CDD - Müşteri Tanı) 

When onboarding new clients or maintaining existing business relationships, it is essential for all parties involved to exercise customer due diligence by: 

• One option is confirming the customer's identity by examining their government-issued identification.
• Another is confirming the customer's residency, and proof of address must be obtained.
• Another item on our list is putting in place a risk-based strategy that adjusts the degree of scrutiny based on the characteristics of the client.
• CDD must be carried out on a regular basis or whenever the client's circumstances or profile change.

2. Enhanced Due Diligence (EDD - Geliştirilmiş Tanı) 

When higher risks are found, enhanced due diligence is necessary to ensure a more thorough examination. This pertains to: 

• Cross-border or high-value transactions that might suggest possible money laundering or illegal activity;
• Transactions involving Politically Exposed Persons (PEPs), who may be more vulnerable to corruption risks because of their public roles;
• EDD entails gathering thorough documentation to confirm the funding source and carrying out continuous monitoring to spot anomalous activity. Institutions can proactively prevent financial crimes by enforcing stricter measures in high-risk cases.

3. Suspicious Transaction Reporting (STR - Şüpheli İşlem Bildirimi) 

A key component of AML compliance is Suspicious Transaction Reporting, which mandates that entities report any transactions that seem out of the ordinary or at odds with typical consumer behaviour. When suspicious activity is discovered, reports must be sent to MASAK (Turkiye's Financial Crimes Investigation Board) within ten days, or right away if it involves the financing of terrorism. 

To find irregularities, compliance teams usually use sophisticated monitoring tools, internal controls, and pattern recognition software. 

4. Record-Keeping Obligations

In order to ensure that all pertinent documentation is kept for regulatory audits and investigations, record-keeping is an essential part of Turkey's AML framework. The following must be accurately documented by obligated entities: 

• Transaction records that specify the type, quantity, and intent of financial transactions. 
• Customer verification documents, such as identification and proof of address. 
• For a minimum of eight years, these records must be kept in a secure location so that regulators can access historical data as needed. 
• Organisations in Turkey can successfully combat money laundering risks, protect their operations, and uphold trust with both customers and regulators.

Major Money Laundering Cases in Türkiye

Sectors Governed by AML Regulations

AML responsibilities cover a number of industries, some of which are listed below:

Institutions of Finance 

The legal framework provides extensive coverage for banks, cryptocurrency exchanges, leasing companies, and payment companies.

Designated Non-Financial Businesses and Professions, or DNFBPs 

Article 2 of Law No. 5549 applies to professionals like jewellers, auditors, and solicitors.

Platforms for Cryptocurrencies 

The regulations governing Virtual Asset Service Providers (VASPs) are based on the 2021 MASAK guidelines. This covers real-time transaction reporting for sums over ₺75,000 as well as mandatory KYC procedures.

Penalties for Non-Compliance 

There are serious consequences for organisations that disregard AML procedures:

Administrative Penalties 

Serious financial penalties, with fines ranging from ₺30,000 to ₺4,000,000, can result from breaking regulatory requirements. 

Criminal Sanctions 

Article 282 of the Turkish Penal Code imposes severe penalties on those found guilty of aiding or abetting money laundering activities. These actions highlight how important it is to fight financial crimes and their effects on the economy.

License Revocation 

Businesses that disregard rules run the risk of losing their operating licenses, especially those with persistent or systemic infractions. In order to guarantee that only compliant entities remain active in the market, this penalty is intended for institutions that exhibit a lack of commitment to regulatory standards.

Türkiye and the FATF Grey List

Due to deficiencies in beneficial ownership and enforcement transparency, Turkey has been on the FATF Grey List since October 2021. MASAK and the Turkish government, however, have made reforms a top priority with an exit in 2024.

• A rise in non-compliance fines and audits. 
• Strengthening interagency cooperation with FATF recommendations.
• Concentrating on crypto platforms and beneficial ownership disclosures.

How Sanction Scanner Supports AML Compliance in Türkiye

Sanction Scanner offers strong tools designed to adhere to MASAK regulations:

Real-Time Sanction Screening 

Ensures regulatory compliance and lowers risk exposure by providing quick and precise identification of sanctioned people and organisations across international watchlists. 

Turkish Language Support 

Improves compliance efforts by providing sophisticated fuzzy matching capabilities that are adapted to the Turkish language, guaranteeing comprehensive and efficient name screening. 

Transaction Monitoring

This feature streamlines compliance procedures and guarantees flawless reporting accuracy.