As part of its fight against money laundering and financing terrorist acts and organizations, the Ministry of Finance (the “Ministry”) issued the Regulation on Suspension of Suspicious Transactions (the “Regulation”) on July 29, 2016. The Regulation focuses on suspending suspicious fund transfers.
Who are the responsible parties?
The parties that are responsible for implementing the Regulation are legal entities and real persons as stated under Article 4 of the Regulation on Measures Regarding Prevention of Money Laundering and Financing of Terrorism, published in the Official Gazette No. 26751 dated January 9, 2008. These responsible parties include mainly banks and other financial institutions.
What the regulation says
According to the Regulation, fund transfers will be suspended in the following events:
Suspicious transaction report
- If there is a document or serious indication supporting the suspicion that the asset subject to the attempted transaction is related to money laundering or financing of terrorism, the responsible party must send a suspicious transaction report to the Financial Crimes Investigation Board (“MASAK”) with the request for suspension of the transaction.
- To suspend a transaction, there must be a serious suspicion such as:
- the transaction has an extraordinary nature;
- the person(s) carrying out the transaction have been identified to be related to the crime as a result of research through several databases or other sources; or
- there is a probability that the completion of the transaction will inhibit or aggravate confiscation of the funds which may be related to financing of terrorism or crime proceeds.
- Related parties shall abstain from carrying out the transactions included in a suspicious transaction report until MASAK serves the Ministry of Finance’s decision to them.
- The suspension may last for up to seven business days.
Assets identified by MASAK
- If there are documents or serious indications supporting that the concerned assets are related to money laundering and/or financing of terrorism, the Minister of Finance will decide on the suspension of the transactions and the decision will be served to the relevant responsible party by MASAK.
- The responsible party will not be able to carry out the transactions specified in the Minister of Finance’s decision for seven business days.
Requests of AML institutions
- If there are documents or serious indications supporting that transactions reported by foreign AML institutions are related to money laundering and/or financing of terrorism, MASAK will evaluate the request and the Minister of Finance will decide thereon.
- The Minister of Finance will render its decision based on the reciprocity principle.
- MASAK will serve the Minister of Finance’s decision on suspension of the transactions and the responsible party will not be able carry out the concerned transactions for seven business days.
Conclusion
As part of the fight against the terrorist organization that orchestrated the attempted coup, the Turkish Government, under the constitutionally granted authority, has been expected to issue expedient and effective legislation for expeditious elimination of terrorist threats. The Regulation is among the precautions taken in the last two weeks to provide for a legal infrastructure which will enable Government officials to respond strongly to those who have been involved in the coup attempt by making it possible to block suspicious fund transfers.
