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Turkey

Last updated: 24/09/2009

CENTRAL AUTHORITY FOR REPORTING

Mali Suclari Arastirma Kurulu (“MASAK”), the Turkish Financial Crimes Investigation Board, has been a member of FIUs Egmont Group since 1998.

MASAK receives Suspicious Transaction Reports and evaluates cases that are forwarded to the relevant public prosecutor for bringing action against money laundering.

OTHER ANTI-MONEY LAUNDERING REGULATOR(S)

HAVE THE TURKISH PROVISIONS BEEN HARMONISED WITH THOSE OF THE THIRD EU MONEY LAUNDERING DIRECTIVE? IF NOT, IS IT EXPECTED TO HAPPEN?

Turkish Regulations and Communiqués were not officially harmonised with Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

However, the extension to include lawyers within the scope of the law’s application and subsequent changes with respect to customer due diligence reflect the influence of the European Union legislation.

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

Laws

  • Turkish Criminal Code (Law 5237)
    (Published in the Official Gazette in October 12, 2004
    Amended by Law 5377 published in the Official Gazette dated July 8, 2005)

Regulations

Communiqués

  • General Communiqué on the Rudiments on the Identification of Customers
    Published in the Official Gazette dated December 2, 2008(not available online)
  • General Communiqué Number 6 (on Suspicious Transaction Reports with respect to Money Laundering and Terror Financing)
    Published in the Official Gazette dated September 27, 2008
  • General Communiqué Number 5 (on Simplified Due Diligence Measures with respect to Money Laundering and Terror Financing)
    Published in the Official Gazette dated April 9, 2008

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

No reference is made with respect to visiting lawyers in the Anti-Money Laundering Law.

However, foreign lawyers are likely to be subjected to the requirements of the aforementioned law if they decide to work in the country on a permanent basis.

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

The MASAK Communiqué on Suspicious Transaction Reports with respect to Money Laundering and Terror Financing

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

No.

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

Circumstances which require customer due diligence by lawyers:

Under Regulation 26751, lawyers are required to undertake client due diligence with respect to :

  • The sale and purchase of real estate or companies;

  • The establishment, management and transfer of an association or foundation.

Lawyers must verify the identities of their customers and the persons who act in the name and on the account of the customers in the following circumstances:

  • When they observe that there is a lack of consistency in the continuation of the trade relationship;

  • When the transaction amount or the total amount of more than one related transaction is 20,000 TRL or more;

  • When the amount of the transaction in electronic transfers or the total amount of more than one interrelated transaction is 2,000 TRL or more;

  • When the total amount of the premium amount to be paid within one year with respect to life insurance agreements exceeds 2,000 TRL or in the case of a single premium, exceeds 5,000 TRL;

  • Where a doubt has arisen with respect to the sufficiency and accuracy of the identification information obtained previously regardless of the amount of the current transaction.

Such identity determination shall be made prior to the establishment of a work relationship or the conduct of the transaction.

Confirmation of the addresses and other communication information shall be made within 10 business days from the completion of the transaction.

Identity information which must be obtained:

The information which must be obtained depends on the nature of the client.

For individuals, this information includes his or her name, surname, place and date of birth, both parents’ names, nationality and type and number of the identity certificate.

For legal entities registered with the trade registry, the following information must be obtained: the title, trade registry number, tax liability number, subject matter of activity, full address, telephone number, fax number, if there is any, as well as the electronic mail address of the legal entity are obtained. Additionally, the name, surname, place and date of birth and both parents’ names must be obtained, along with the nationality of the person authorized to represent the legal entity, and the Republic of Turkiye identification number (for Turkish citizens), and type and number of the identity documents and sample signatures are obtained.

For associations, the following information must be obtained: information regarding the name, purpose, generation number, full address, telephone and fax, if there is any, number and electronic address of the association are obtained. Additionally, the name, surname, place and date of birth and both parents’ names must be obtained, as well as the nationality of the person authorized to represent the legal entity, and the Republic of Turkiye identification number (for Turkish citizens) and type and number of the identity documents.

For foundations, the following information must be obtained: the name, purpose, registration number, full address, telephone and fax, if there is any, number and electronic address of the association are obtained. Additionally, the name, surname, place and date of birth and both parents’ names must be obtained, as well as the nationality of the person authorized to represent the legal entity, the Republic of Turkiye identification number (for Turkish citizens) and type and number of the identity documents.

For Foreign Associations and Foundations, determination of the identities of the branches and representation offices of foreign associations and foundations in Turkiye is made based upon the documents obtained from the Ministry of Internal Affairs,

Verification of Information

Accuracy of the identity of any individual (including those authorized to act on behalf of legal entities) is verified through the identity certificate, driving license or passport, or (in the case of foreign citizens) passport, certificate of residency or identification certificate as deemed appropriate by the Ministry of Finance.

The identity of legal entities registered with the trade registry is verified through documents pertaining to the trade registry. The verification of the tax liability number is performed through the documents issued by the relevant unit of the Revenue Administration.

The identity of associations is verified through documents regarding the registration present with the charter and lodge of the association.

The identity of foundations is verified through the trust indenture and documents regarding the registration kept with the General Directorate of Foundations. Additionally, the authority granted to agents is verified through the documents evidencing that those authorities have been granted.

When establishing an ongoing business relationship (defined by Regulation 26751 as a legal entity, an association or a foundation), lawyers shall verify the currency and accuracy of the information contained in the registration documents by applying to the records of the relevant trade registry office or searching through the database of The Union of Chambers and Commodity Exchanges of Turkey.

Verification of the accuracy of the telephone and fax numbers as well as the electronic mail address is performed through contacting the relevant person using those means.

Verification of the address of an ongoing business relationship shall be made with reference to a service that requires a subscription, such as electricity, water, natural gas or telephone, within the previous three months prior to the date of the transaction. Alternatively, the accuracy of the address may be verified by another document provided by a public institution, or by any other document and methods as deemed appropriate by the Ministry.

The accuracy of the identity information of the person authorised to represent the entity may be verified through the notarized signature circular containing the information indicated in the identity documents, provided that it can be proven that the instruction has been given by the officer of the entity.

Miscellaneous Information:

Pursuant to the Communiqué, the period for compliance for gathering information for the purposes of verifying a client’s identity has been extended to June 1, 2009. The obligation shall be fulfilled before the stated date.

In cases where liable parties have doubts over the authenticity of the documents which have been obtained for verification purposes, liable parties shall, to the extent possible, seek to verify the authenticity of the documents.

Record-Keeping Obligations

Once the above information has been verified, legible photocopies or electronic images of the documents must be obtained. Alternatively, the distinctive information pertaining to the document must be registered.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Yes. Please refer to the answer regarding the question on enhanced due diligence measures.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

Enhanced due diligence exists in the following circumstances:

Transactions Calling for Special Attention

In connection with (i) transactions that are complicated and extraordinary in size, and (ii) transactions having no apparent reasonable legal and economical aim, the liable parties are obliged to pay special attention, to take the necessary actions for the obtainment of sufficient information regarding the purpose of the requested transaction, and to maintain the information, documents and records which are obtained thereby for the purpose of presenting them to the officers upon request.

Taking Precautions against Risk

The development of new technologies contains risks with respect to terror financing and money laundering. Therefore, it is provided by virtue of the Regulation (Article 20) that regarding issues that do not require face-to-face contact such as:

  • Depositing cash into an account;

  • Withdrawing cash;

  • Electronic transfer;

… that due “special attention” must be paid when the client profile is found to be unsuitable.

Relations with Risky Countries

In establishing trade relations in risky countries with (i) the resident real and legal persons, (ii) organizations having no legal personality, and (iii) the citizens of those countries, lawyers shall pay special attention, to collect and register as much information as possible about the objective and nature of the transactions having no reasonable legal and economic aim.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

Scope of Application for Simplified Due Diligence Measures

Article 26/1 (b) and (d) of Regulation 26751 envisages simplified due diligence measures for situations in which the client is a public administration subject to general management under the Public Finance Administration and Control Law (Law 5018) or if the client is a company registered on the stock exchange. This does not preclude the application of the obligation set out in Article 27 to report suspicious transactions to MASAK. Thus, the simplified precautions shall not apply in case of a suspicion for the crimes of money laundering and terror financing.

Additionally, the General Communiqué on the Rudiments on the Identification of Customers made under Regulation 26751 further extends the scope for simplified due diligence measures to:

  • Transactions between financial institutions related to their own accounts;

  • Transactions carried out by public administrations or by professional institutions acting as the client that are qualified as public administrations which are subject to general management;
     
  • Salary payment contracts;

  • Transactions with respect to pension contracts.

Content of the Simplified Due Diligence Measures

The simplified precautions which are to be followed by lawyers, in accordance with the provisions of the Regulation 26751, have been determined by the Board of Financial Crimes Investigation in the Communiqué published in the Official Gazette dated April 9, 2008 (Sequence No. 5).

  1. The simplified precautions are limited by (Communiqué Article 2.1-3rd paragraph);
  • ID identification;

  • Identification of the real beneficiary;
     
  • Special care for the legal entities;

  • Monitoring of the status and transactions of the client;

This information shall be registered in writing or in electronic form.

  1. The liable parties are obliged to evaluate - for every transaction separately - whether there is an abuse in terms of the crimes of money laundering and financing terror.

Absence of Verification for Companies Listed on the Stock Market and Public Institutions

  1. The liable parties shall register the information and certificate of authority of the real persons in transactions where the client is a public administration or a professional institution qualified as a public institution. The liable parties are not obliged to verify the address and other contact details.

  2. If the transactions are entered into by a client who is a company listed on the Stock Market, the necessary information shall be registered without the need for confirmation from the company. However, the IDs and state of authority of the persons authorized to represent the legal entity shall be determined in accordance with Regulation 26751.

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Lawyers are not permitted to rely on third party due diligence.

The right to rely on third party due diligence under Article 21 of Regulation 26751 only applies to financial institutions.

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

Obligation to Report Suspicious Transactions

In accordance with the Anti-Money Laundering Law, transactions which have been:

  • Carried out; or
  • Attempted to be carried out

in the presence of lawyers shall be reported to the Financial Crimes Investigation Board Chairmanship (MASAK) in case there is any piece of information, doubt or any issue calling for doubt to the effect that the asset subject to the transaction in question:

  • Has been obtained illegally; or
  • Has been/is being used for illegal purposes.

Suspicious transaction is defined as “the presence of any kind of information, doubt, or issue calling for doubt, indicating that the asset underlying the transaction that has been carried out or that is intended to be carried out before the liable parties, which include lawyers, is utilized for terrorist actions, terrorists, terrorist organizations, or those which finance terror, or that it is related or connected to any of those or by means of such liable parties has been acquired illegally or utilized for illegal purposes”.

Obligation to Report Transactions with Certain Sums on a Permanent Basis

Lawyers may be required to report transactions on a permanent basis with respect to transactions with certain sums.

Additionally, under Regulation 26751, the Ministry of Finance has the authority to determine situations where a reporting obligation arises on a permanent basis with respect to the information provided.

The scope of the Ministry’s authority to prescribe circumstances which trigger reporting requirements extends to:

  • Types of transactions required to be informed;

  • Mode and term of informing;

  • Liable parties to be excepted from the obligation to inform;

  • Procedures and principles of application.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

Regulation 26751 does not mention the duty of confidentiality. However, according to its Article 4 (s), lawyers are bound by the requirements of the Anti-Money Laundering Law as far as those requirements do not breach the right of defence as envisaged in other laws.

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Lawyers who have reported a suspicious transaction shall not be subject to any criminal or civil prosecution (Article 28/4 of Regulation 26751).

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

Regulation 26751 is silent as to whether lawyers should proceed with the legal advice once the suspicious transaction report has been filed.

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

A tipping-off prohibition exists pursuant to Article 4 of the Anti-Money Laundering Law (Law 5549). According to the duties stated in Article 29 of Regulation 26751, lawyers shall not disclose the fact that information has been transmitted or is about to be transmitted with respect to a money laundering or terrorist financing investigation.

The tipping-off prohibition includes all contacts liable parties may have in foreign countries.

The prohibition does not include disclosure to the competent authorities or disclosure concerning judicial proceedings.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

Lawyers shall not engage in a business relationship with a new client if pursuant to customer due diligence they can not identify the customer or that the information obtained regarding the purpose of the business relationship is insufficient.

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

Identity Determination in Subsequent (Successive) Transactions

Information related to the identity of the persons whose identity determination has been duly previously made shall be collected in the subsequent transactions covered within the scope of the continuous trade relation and compared to the documents previously acquired.

If and when a doubt arises with respect to the accuracy of the obtained information, the accuracy of that information must be verified through the identity certificates underlying the verification or the comparison of the information contained therein to that remaining with the liable party following the presentation of the notarized copies of the same (Article 16 of Regulation 26751).

For the purposes of a continuous trade relation, the accuracy of the address is verified though the invoice issued with respect to a service that requires a subscription such as a . Alternatively, the accuracy of the address may be verified by another document provided by a public institution, or by any other document and methods as deemed appropriate by the Ministry of Finance.

Lawyers must keep copies of the documents regarding the clients’ address by making legible photocopies or electronic images of the documents, or by registering the relevant information.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

A lawyer may be liable to an administrative fine of 5,000 TRL payable to the MASAK Chairmanship if they do not comply with:

  • The requirement of identity determination;

  • The requirement to inform MASAK on a permanent basis; or

  • The requirement to notify MASAK in case of a suspicious transaction.

Additionally, a lawyer shall be sentenced to a prison term starting from one year up to a maximum of three years and shall fined up to 5,000 days for:

  • Disclosure of a reported a suspicious transaction;

  • Refusal to give information and documents to the supervisory personnel and to MASAK;
     
  • Failure to preserve and disclose when necessary the relevant information and documents for a period of eight years.

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

So far, no complaint, arrest or prosecution was filed against a Lawyer with respect to money laundering.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

Yes, the FATF released a Mutual Evaluation Report for Turkey on Anti-Money Laundering and Combating the Financing of Terrorism in February 2007.

The FATF strongly recommended that Turkey introduce AML/CFT measures for lawyers and implement systems for monitoring and ensuring the compliance of all DNFBPs with AML/CFT requirements.

The FATF also recommended that MASAK should begin providing feedback in response to STRs. The report suggested that MASAK should issue further guidance to this sector regarding when and how to report suspicious transactions as well as outline what steps should be implemented to ensure any internal AML measures are effective.


Information provided by:

Fuat Tuac & Esra Kilic

PEKIN & PEKIN
10 Lamartine Caddesi
Taksim 34437
Istanbul
Turkey

Official Website: http://www.pekin-pekin.com

SOURCES:

  1. eStandards Forum- Financial Standards Foundation
  2. FATF Mutual Evaluation Report on Turkey, 23 February 2007