Turkey

1. Does Turkey have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes. The laundering of funds obtained from crime is defined as an offence in Article 282 of the Turkish Criminal Code No. 5237 (“Criminal Code”), while principles and procedures of anti-money laundering.

(“AML”) are set out in the Law on the Prevention of Laundering Proceeds of Crime No. 5549 (“AML Law”) which entered into force in 2006.

Separately, terrorism financing is defined as an offence in Articles 3 and 4 of the Law on the Prevention of Terrorism Financing No. 6415 (“Terrorism Financing Law”) which entered into force in 2013, and principles and procedures of combating the financing of terrorism (“CFT”) are set out in the same Terrorism Financing Law.

The Regulation on Measures Regarding Prevention of Laundering Proceeds of Crime and Financing of Terrorism (“Measures Regulation”) and General Communiqués of the Financial Crimes Investigation Board (“MASAK”) constitute the other principal legal instruments that formulate the Turkish AML & CFT legislation.

2. To whom does the legislation apply?

The legislation applies to all AML and CFT crimes committed in Turkey regardless of the offender’s nationality. The legislation applies to natural persons including public officers and professionals, as well as legal entities.

3. What does the legislation prohibit?

The legislation bans laundering (transferring abroad, concealing illicit source, giving false impressions about the source) of assets acquired from an offence (Article 282 Criminal Code) as well as provision or collection of funds for terrorists, terrorist organisations or perpetration of certain terrorism acts (Articles 3 and 4 Terrorism Financing Law).

Further, purchasing, acquiring, possessing or using the proceeds which is the subject of the laundering offence and knowing the nature of the proceeds is also prohibited. Where the laundering offence is committed by a public officer or professional person in the course of his duty, the penalty to be imposed increases by one half. Where the laundering offence is conducted in the course of the activities of an organisation established for the purpose of committing an offence, the penalty to be imposed shall be doubled. Where a legal entity is involved in the commission of the laundering offence it shall be subject to measures specific to the legal entities.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

The money laundering offence (laundering of assets acquired from a criminal offence as is the statutory phrase) is defined as transferring abroad the assets acquired from an offence requiring a minimum penalty of six months or more imprisonment, or processing such proceeds in various ways in order to conceal the illicit source of such proceeds or to give the impression that they have been legitimately acquired (Article 282 Criminal Code).

For an act to be established as a money laundering offence, the assets at issue have to be acquired from a predicate crime which requires imprisonment of minimum six months under Turkish law (e.g. forgery, fraud, fraudulent bankruptcy, smuggling, embezzlement, etc.), hence this predicate crime will have to be proven. If there is no separate judicial proceeding or an existing verdict about the predicate crime, the competent court shall prosecute and first decide on whether the predicate crime has been committed or not. Where it is decided that there is not any predicate crime committed, the court is expected to give an acquittal in the laundering case.

5. What level of intent or knowledge is required to establish a violation?

General intent is required as the subjective element of the laundering offence; that is, the offender has the knowledge of the acts and consequences and willingly carries out the acts. When the predicate crime is committed by another person, the offender of the laundering offense should have knowledge that the assets or proceeds at issue were acquired from an offense.

As for the terrorism financing offence, any person who provides or collects funds for a terrorist or terrorist organisations with the intention that they are used or knowing and willing that they are to be used, even without being linked to a specific act, in full or in part, in perpetration of the terrorist acts shall be subject to punishment. It shall not be necessary that the funds have actually been used to commit an offence.

6. What are the potential penalties for infringing the legislation?

The Criminal Code sets out the imprisonment penalty of between three and seven years and judicial fine of up to 20,000 days for the laundering offence. For situations that increase the penalty, see Question 3. No penalty shall be imposed upon a person who directly enables the securing of financial assets, or who facilitates the securing of such assets, by informing the relevant authorities of the location of such before the commencement of a prosecution (Article 282 Criminal Code).

The Terrorism Financing Law stipulates an imprisonment penalty of between five and ten years for the offense of terrorism financing. In cases where the terrorism financing offence is committed through undue influence in the public service, the punishment to be imposed shall be increased by half. In cases where the terrorism financing offence is committed within the framework of a legal entity’s activity, measures specific to legal entities shall be applied (Article 4 Terrorism Financing Law).

7. Does the legislation have extra-territorial reach?

In the preamble of Article 282 of the Criminal Code, it is stipulated that if, for instance, money acquired from an offense committed abroad is transferred into Turkey through foreign investment incentives legislation, creating the false impression that it was acquired by legitimate means, then this shall constitute the laundering crime.

Further, the National Terrorist Asset Freezing Mechanism has extra-territorial reach; as per the relevant UNSC Resolutions and the provisions of the Terrorism Financing Law, Turkey freezes assets of persons designated by the UNSC, responds to the freezing requests of foreign countries (UNSCR 1373) and makes requests for freezing assets in foreign countries (UNSCR 1373) through the decision of the President published in the Official Gazette.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Obligations adopted as preventive measures in combating the laundering of 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
• periodic reporting
• e-notification

Obligated parties are those who operate in the field of banking, insurance, individual pension, capital markets, money lending and other financial services, postal service and transportation, lotteries and betting; those who deal with foreign exchange, real estate, precious stones and metals, jewellery, all kinds of transportation vehicles, construction machines, historical artifacts, art works, antiques or intermediaries in these operations; notaries, sports clubs (Article 2(d) AML Law). With the amendment to the AML Law on 27.12.2020, lawyers are also included within the list of obliged parties.

9. What are the potential penalties for failing to comply with these obligations?

AML Law stipulates imprisonment of between 1-3 years and a judicial fine up to 5000 days for the obligated parties who fail to comply with Article 4/2 (the obligated party must not give information to anybody that they are reporting the suspicious transactions, other than the examiners assigned to conduct supervision of obligations and the courts during legal proceedings), Article 7 (the obliged party must provide the requested information and documents) and Article 8 (the obliged party must retain documents for 8 years and submit related documents once requested) AML Law (Article 14).

Obligated parties shall be punished with an administrative fine of between TRY 40,860 – 54,480,000 for the year of 2022 if they violate the obligations of customer identification, periodical reporting and suspicious transaction reporting. If the obligated party is a bank, finance company, factoring company, money lender, financial leasing company, insurance and reinsurance company, pension company, capital market institution or bureau de change, an administrative fine shall be applied two-fold (Article 13 AML Law).

The obligated parties who fail to comply with the obligations regarding training, internal control, control and risk management systems and other measures shall be given at least 30 days in order to remove deficiencies and to take necessary measures. If the obliged parties do not remove deficiencies and take necessary measures within the given time the above-mentioned fines shall apply.

Persons, institutions and organisations who fail to comply with the obligations of e-notification shall be punished with an administrative fine of between TRY 54,480 – 1,362,000 during the year of 2022 by MASAK for each failure to comply.

10. Who are the relevant enforcement authorities in Turkey and what are their contact details?

MASAK (Mali Suçları Araştırma Kurulu/Financial Crimes Investigation Board), under the Ministry of Treasury and Finance

address: T.C. Hazine ve Maliye Bakanlığı, Devlet Mahallesi Dikmen Caddesi No: 12 06420 Çankaya

Ankara phone: +90 312 415 2900