Anti Money Laundering (AML) By Country: Turkey

Anti-Money Laundering (AML) in Turkey

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Money laundering in Turkey is an ongoing problem, mainly because the country is extremely vulnerable to drug trafficking. In order to strengthen its Anti-Money Laundering (AML) system, Turkey has recently added several new pieces of legislation to its AML regime.

Money laundering in Turkey takes place in both banks and non-bank financial institutions. Money laundering methods in Turkey include: the cross-border smuggling of currency; bank transfers into and out of the country; and the purchase of high value items such as real estate, gold, and luxury automobiles. It is believed that Turkish-based traffickers transfer money to pay narcotics suppliers in Pakistan and Afghanistan, reportedly through alternative remittance systems. The funds are transferred to accounts in the United Arab Emirates, Pakistan, and other Middle Eastern countries. The money is then paid to the Pakistani and Afghan traffickers.

Turkey first criminalized money laundering in 1996 with the Law on preventing Money Laundering (No. 4208). The law included a wide range of predicate offenses, including narcotics-related crimes, smuggling of arms and antiquities, terrorism, counterfeiting, and trafficking in human organs and in persons. Under the law, whoever commits a money laundering offense faces a sentence of two to five years in prison, and is subject to a fine of double the amount of the money laundered and asset forfeiture provisions.

The Council of Ministers subsequently passed a set of regulations that require the filing of Suspicious Transaction Reports (STRs), customer identification, and the maintenance of transaction records for five years. These regulations apply to banks and a wide range of non-bank financial institutions, including insurance firms and jewelry dealers.

In 2004, the Government of Turkey (GOT) enacted additional AML legislation, a new criminal law, and a new criminal procedures law. The new Criminal Law, which took effect in June 2005, broadly defines money laundering to include all predicate offenses punishable by one year’s imprisonment. Previously, Turkey’s AML law comprised a list of specific predicate offenses. A new Criminal Procedures Law also came into effect in June 2005.

The AML legal framework established by Law No. 4208 was updated and strengthened by the passing of the Prevention of Laundering the Proceeds of Crime (No. 5549) in October 2006. In February 2013, the Government of Turkey enacted the Law on the Prevention of the Financing of Terrorism (No. 6415) which further defined terrorist financing offenses and provided new powers to the authorities to take action against suspected terrorist financing.

AML regulations have also been issued to supplement the provisions of these laws in the past few years. The central authority for reporting in Turkey is Mali Suclari Arastirma Kurulu (MASAK), the Turkish Financial Crimes Investigation Board, which is a service unit instituted within the Ministry of Finance.

The Economy of Turkey

Turkey's dynamic economy is a complex mix of modern industry and commerce along with a traditional agriculture sector that still accounts for about 25% of employment. It has a strong and rapidly growing private sector, yet the state still plays a major role in basic industry, banking, transport, and communication.

After Turkey experienced a severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an IMF program. The reforms strengthened the country's economic fundamentals and ushered in an era of strong growth averaging more than 6% annually until 2008. Today Turkey has a GDP (PPP) of $1.512 trillion (2014 est.).

Banking in Turkey

The Central Bank of the Republic of Turkey was founded as a joint stock company with the exclusive right to issue banknotes in the nation.

The Central Bank sets rediscount ratios to regulate money markets, facilitates and executes Treasury operations, and takes measure along with the government to promote the value of the Turkish Lira.

The Banking Regulation and Supervision Agency (BRSA) is the banking regulator in Turkey.

Turkish Currency

The Turkish Lira is the currency of Turkey and the Turkish Republic of Northern Cyprus. The symbol is TRY or Kr (kuruş). Its nicknames include Kağıt, Mangır, and Papel.

Coins are printed in denominations of 1, 5, 10, 25, and 50. Banknotes are printed in denominations of 5, 10, 20, 50, 100, and 200.

Other Key Statistic of Turkey

Time Zone: UTC+2 (7 hours ahead of Washington, DC during Standard Time). Daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October.

Location: Southeastern Europe and Southwestern Asia (that portion of Turkey west of the Bosporus is geographically part of Europe), bordering the Black Sea, between Bulgaria and Georgia, and bordering the Aegean Sea and the Mediterranean Sea, between Greece and Syria.

Population: 81,619,392 (July 2014 est.)

Labor Force: 27.56 million (2014 est.). Approximately 25.5% work in agriculture, 26.2% in industry and 48.4% in services industries. The unemployment rate is 9.4%.

Languages Spoken: Turkish (official), Kurdish, Dimli (or Zaza), Azeri, Kabardian note: there is also a substantial Gagauz population in the European part of Turkey.

Trade Organizations: Turkey is a member of the World Trade Organization (WTO) and of the Egmont Group.


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