Mar 23 2009 Martin Coyle Complinet exclusive
Turkey's anti-money laundering regime has been enhanced to ensure that the country's banks, stockbrokers, insurance and pension companies comply with international standards. The steps, which were introduced at the start of the month, follow Financial Action Task Force figures that suggested that Turkey has failed to stop the flow of dirty cash despite increased efforts.
The new legislation forces financial institutions to introduce compliance programmes that are designed to combat the threat of money laundering. The programmes should also cover branches, agencies, representatives and other affiliated units whose head offices are in Turkey. Yildirim Bozbiyk, head of the Financial Crimes Investigation Board's (MASAK) foreign affairs department told Complinet that the new system was underpinned by know your customer requirements.
"The goal of the new regulation is to make the Turkish anti-money laundering/combating financing terrorist system more efficient in compliance with the international standards in this area. MASAK plays a key role in Turkish AML/CFT system and it has enough resources to carry out its duties and responsibilities," he said.
The new regime takes a risk-based approach and calls for firms to develop institutional policies and procedures, carry out risk management activities, and monitor and control activities. Firms should also assign a compliance officer and set up a dedicated anti-money laundering compliance unit. Firms must also put in place training schemes for staff and bolster internal control mechanisms. A firm's board should monitor the role of the compliance officer, according to the rules.
FATF noted last month that although Turkey had taken impressive steps to combat money laundering and terrorist financing, the number of suspicious transaction reports that firms file rose from 180 in 2003 to 4318 last year. MASAK estimates that as much as $5bn worth of illegal drugs is smuggled through Turkey each year and the proceeds of this constitute the lion's share of money laundered. It is thought that the income from drugs is largely used to fund terrorist activities.
FATF has given Turkey an additional year to improve its anti-money laundering controls following the measures it has taken over the past couple of years. In 2007 FATF failed the country in 33 out of 49 anti-money laundering categories.
