PREVENTIVE MEASURES
OBLIGED PARTIES
SANCTIONS
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PREVENTIVE MEASURES
 

In order to combat money laundering more efficiently and to prevent abuse of financial system by criminals some obligations have been established for financial institutions and some other professions both in international and national legal system.

According to article 2/d of the Law No. 5549 on Prevention of Laundering Proceeds of Crime obliged parties are those who operate in the field of banking, insurance, individual pension, 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, art works, antiques or intermediaries in these operations; notaries, sports clubs. Council of Ministers is authorized to determine obliged parties among other businesses and professions that are not listed above. Obliged parties have been separately determined in the Regulation on Measures Regarding Prevention of Laundering Proceeds of Crime and Financing of Terrorism.

 

Relevant Legislation:

Laws


Communiques


Obligations established as preventive measures in combating laundering proceeds of crime and financing of terrorism are as follows:

  • Customer Identification
  • Suspicious Transaction Reporting
  • Assignment of Compliance Officer
  • Establishing systems of internal audit, control and risk management
  • Obligation of submitting information and documents
  • Retaining and Submitting
  • Periodically reporting
  • E-Notification
     

1 - Customer Identification
In accordance with Article 3 of Law No. 5549 before the transactions are conducted obliged parties shall identify persons carrying out transactions and persons on behalf or for the benefit of whom the transactions are conducted within or through obliged parties. According to the second paragraph of the article the Ministry of Finance has the authority to determine document types required for customer identification, and the types of transactions necessitating customer identification, monetary limits for them and other related principles and procedures shall be determined by regulations. Principles regarding customer identification have been determined under chapter three of Regulation on Measures Regarding Prevention of Laundering Proceeds of Crime and Financing of Terrorism which has been issued based on the authority given by the Law.
 

Accordingly;

a) Regardless of the monetary amount in permanent business relationships;
b) When the amount of a single transaction or the total amount of multiple linked transactions is equal to or more than twenty thousand TRY;
c) When the amount of a single transaction or the total amount of multiple linked transactions is equal to or more than two thousand TRY in electronic transfers;
ç) Abolished.
d) Regardless of the monetary amount in cases requiring STR;
e) Regardless of the monetary amounts in cases where there is suspicion about the sufficiency and the truth of previously acquired identification information
 

Customer identification shall be completed before the business relationship is established or the transaction is conducted.
When establishing permanent business relationship, information on the purpose and intended nature of the business relationship shall be received.
The arrangements in relation to the Principles Regarding Customer Identification of Natural Persons, Legal Persons Registered to Trade Registry, Associations and Foundations, Trade Unions and Confederations, Political Parties, Non-Resident Legal Persons, Unincorporated Organizations, Public Institutions; Customer Identification of Those Acting on Behalf of Others; Control of the authenticity of documents which are subject to verification; Customer Identification in Subsequent Transactions; Recognition of beneficial owners and paying special attention to legal persons; Transactions which require special attention; Monitoring the customer profile and the transactions; Taking Measures Against Technological Risks; Reliance on Third party; Rejection of Transaction and Termination of Business Relationship; Correspondent Relationship; Wire transfers; Relationships with risky countries; and Simplified measures are established in Chapter Three of the Regulation. Please see the Regulation for further information.
 

2 - Suspicious Transaction Reports

Under Article 4 of the Law No: 5549, in case that there is any information, suspicion or reasonable grounds to suspect that the asset, which is subject to the transactions carried out or attempted to be carried out within or through the obliged parties, is acquired through illegal ways or used for illegal purposes, these transactions shall be reported to MASAK by the obliged parties.

Suspicious transaction is the case where there is any information, suspicion or reasonable grounds to suspect that the asset, which is subject to the transactions carried out or attempted to be carried out within or through the obliged parties, has been acquired through illegal ways or used for illegal purposes and is used, in this scope, for terrorist activities or by terrorist organizations, terrorists or those who finance terrorism in accordance with Article 27(1) of the Regulation On Measures Regarding Prevention Of Laundering Proceeds Of Crime And Financing Of Terrorism.

Suspicious transaction reporting is carried out personally by natural person who is an obliged party, by legal representatives of legal person who is an obliged party, by managers of unincorporated organizations or those who are authorized by them and compliance officers where an obliged party assigns a compliance officer.
According to the article 4 of the Law, the obliged parties shall not give the information to anybody including the parties of the transaction that they report the suspicious transactions to MASAK, other than the examiners assigned to conduct inspection of obligations and the courts during legal proceedings.


3 - Assignment of Compliance Officer

Under Article 5 of the Law No: 5549, it is stipulated that obliged parties are required to assign an officer with necessary authority at administrative level for ensuring compliance with this Law.
• The principles and procedures of assignment of compliance officers are laid down in the Regulation On Program of Compliance with Obligations of Anti-Money Laundering and Combating the Financing of Terrorism. Thus:

a)Banks.
b)Capital Markets Brokerage Houses
c)Insurance and pension companies
d)General Directorate of Post (pertaining only to banking activities)
e)Institutions other than banks that have the authority to issue bank cards or credit cards.
f)Authorized exchange offices given in legislation on foreign exchange.
g)Financing and factoring companies within the scope of legislation on money lending.
h)Reinsurance companies
i)Financial leasing companies.
j)Institutions furnishing settlement and custody services within the framework of capital markets legislation.
k)futures brokerages
 

are obliged with assigning a compliance officer. For further information please see the Regulation on Compliance.
 

4 – Establishing Compliance Program

In article 5 of the Law on Prevention of Laundering Proceeds of Crime, no:5549 dated 11.10.2006 titled training, internal control and risk management systems and other measures , it is regulated that the Ministry has the authority to determine obliged parties and implementation principles and procedures, including measures to assign an officer with necessary authority at administrative level for ensuring compliance with this Law and to establish training, internal control and risk management systems by regarding size of business and business volumes
In accordance with the article of this Law, Regulation On Program of Compliance with Obligations of Anti-Money Laundering and Combating the Financing of Terrorism was prepared and published in the Official Gazette no 26999 on 16 September 2008.
The regulation introduces the principles and procedures regarding establishment of compliance program on prevention of laundering proceeds of crime and terrorist financing by the obliged parties.
Among the obliged parties, banks, capital markets brokerage houses, insurance and pension companies and General Directorate of Post (pertaining only to banking activities) are called for establishing a compliance program on prevention of laundering proceeds of crime and terrorist financing, and within the context of compliance program, the measures below are needed to be covered by the said parties:

a) developing institutional policy and procedures,
b) carrying out risk management activities,
c) carrying out monitoring and controlling activities,
ç) assigning compliance officer and establishing the compliance unit,
d) carrying out training activities,
e) carrying out internal control activities.
 

5 – Providing Information and Documents

In accordance with Article 7 of Law No.5549, when requested by MASAK or examiners, the obliged parties shall provide all kinds of information, documents and related records in every type of environment, all information and passwords necessary for fully and accurately accessing to or retrieving these records, and render necessary convenience.

Those from whom information and documents are requested in accordance with the previous paragraph may not avoid giving information and documents by alleging the provisions of special laws, providing the defense right is reserved.
 

6 - Retaining and submitting

In accordance with Article 8 of Law No.5549, the obliged parties shall retain the documents, books and records, identification documents kept in every kind of environment regarding their transactions and obligations established in this Law for eight years starting from the drawn up date, the last record date, the last transaction date respectively and submit them when requested. The beginning date of the keeping period of documents related to customer identification concerning the accounts within obliged parties is the closing date of the account.

The documents and records related to suspicious transaction reports submitted to MASAK or internal reports submitted to compliance officer, the documents annexed to report, the written justifications concerning suspicious transactions decided not to be reported by compliance officers are in the scope of retaining and submitting obligation.
 

7 - Periodically Reporting

In accordance with Article 6 of Law No.5549, the obliged parties shall report the transactions, to which they are parties or intermediaries, exceeding the amount determined by the Ministry to MASAK.

Periodically reporting may be requested by MASAK from the public institutions and organizations, and institutions and organizations in the nature of public bodies other than the obliged parties.
 

8- E-Notification


According to Article 9/A of Law No.5549 on Prevention of Laundering Proceeds of Crime; The notifications to be drawn up under the implementation of this Law and the Law No.6415 on Prevention of the Financing of Terrorism may be notified electronically and response may be requested electronically notwithstanding the procedures relating to electronic notification established in Article 7/A of Notification Law No.7201. This type of notifications shall be deemed as notified when reached to the other side.
Also, under the aforementioned article, MASAK has been authorized to construct all kinds of technical infrastructure or to use the existing ones, to impose obligations for using electronic addresses suitable for notification and giving responses electronically, to determine the procedures and principles relating to ones to be notified electronically and electronic notifications.


Based on this authority, “the Regulation Regarding Principles and Procedures on Technical Infrastructure of Electronic Notification System” of MASAK was prepared and published in the Official Gazette No:29311 on 30 March 2015.


According to this regulation, notifications to be made by MASAK upon the laws 5549 and 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 Organisation Company should be made in electronic environment. Furthermore, other obliged groups mentioned in 2(1)(d) of the Law 5549 may apply to MASAK for receiving e-notification, and if MASAK approves they may receive e-notification. The obliged party which will receive e-notification shall:


a) fully and accurately provide the information and documents that are necessary for application to MASAK in a timely manner;
b) immediately inform MASAK of any changes that occur in the information provided during the application;
c) abide by all the terms specified in the application form;
ç) protect the access information provided to himself after the account opening; not share it with third parties; and not have it used by anyone else;
d) immediately inform MASAK in cases where he finds out that third parties, without consent, acquire information providing access to the account.

Please see the regulation for further information.