KYC.IO

Global Regulations and Requirements for KYC Onboarding
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KYC to onboard domestic persons

identity cardnationalitypassportdriving license

KYC to onboard international persons

national identity carddriving licensepassportutility bill

corporate requirements

Trade gazettesnational identification carddriving licencepassport

National ID card name

Nüfus Cüzdanı

Does the country have Esignature Laws?

The Turkish Electronic Signature Law

E-sig law files

What year did the relevant AML laws and regulations become effective?

2011

Further details on AML regime

The Law on Preventing Money Laundering (Law No: 4208) was enacted on 19 November 1996. This was subsequently updated and strengthened by the Prevention of Laundering the Proceeds of Crime (Law No: 5549) which came into force on 18 October 2006 and was amended on 1 April 2008, 07 July 2011, 26 September 2011, and 11 October 2011.

Who is the regulator for AML controls for Banking

The Banking Regulation and Supervision Agency (“BRSA”)

Link to site

http://www.bddk.org.tr/websitesi/English.aspx

Other financial Services

The Capital Markets Board (“CMB”)

Website of Regulator

http://www.cmb.gov.tr/index.aspx

Financial Sector regulator

http://www.treasury.gov.tr/

Practical Guidance for AML

Yes - Financial Crimes Investigation Board (“MASAK”) has a series of guidance documents for firms subject to regulations

Is there a requirement to verify the identity of customers retroactively?

Retroactive details

Has the country been the subject of FATF mutal evaluation in the last 3 years?

The latest FATF Mutual Evaluation Report is dated 2 April 2007. The latest IMF Financial System Stability Assessment is dated September 2012.

PDF of FATF review

mutualevaluationofturkey.htm

Are there minimum transaction thresholds (Y/N)

Yes

More details on minimum transaction thresholds.

Yes. Obliged parties shall identify their customers or those who act on behalf or for the benefit of their customers by receiving their identification information and verifying it: a) Regardless of the monetary amount when establishing permanent business relationships. Customer identification shall be completed before the business relationship is established or the transaction is conducted. When establishing permanent business relationship, information on the purpose and intended nature of the business relationship shall be obtained. b) When the amount of a single transaction or the total amount of multiple linked transactions is equal to or more than TRY20,000; c) When the amount of a single transaction or the total amount of multiple linked transactions is equal to or more than TRY2,000 in wire transfers; d) Regardless of the monetary amount in cases requiring Suspicious Activity Report; e) Regardless of the monetary amounts in cases where there is suspicion about the adequacy and the accuracy of previously

What are the requirements for customer identification information for individuals

Turkish national real persons: National identification card, driving licence or passport. In the case of a continuous transaction relationship: any utility bill (water, electricity, gas etc.) issued within the last three months of the date of transaction for address verification. Foreign national real persons: Passport, residence permit or other identification cards determined to be valid by the Ministry of Finance. Address verification is the same as stated above.

Details to be Collected on Corporates

Trade gazettes, national identification card, driving licence or passport for Turkish national real persons and passport, residence permit or other identification cards determined by the Ministry of Finance for foreign national real persons authorised to represent the company, signature circulars, list of authorised company representatives and their signature circulars. The verification of the updated information is done through the Chamber of Commerce Databases and telephone, fax and email verification through using the same channels.

What are the high level requirements around beneficial ownership (identification and verification)?

On behalf of real persons: National identification card, driving licence or passport of the person performing the transaction and the beneficiary and proxy document stamped by the public notary. Legal persons: Trade gazettes, signature circulars, list of authorised company representatives and their signature circulars of the beneficiary, national identification card, driving licence or passport of the person performing the transaction. If the person performing the transaction is not listed as an authorised company representative of the beneficiary, then a proxy document stamped by the public notary is required.

What circumstances are enhanced customer due diligence measures required?

For complex and unusually high volume transactions, enhanced customer due diligence measures is required. There is a recommendation by The Financial Crimes Investigation Board (“MASAK”) stating that banks should utilise enhanced due diligence procedures for high-risk transactions. The risk is determined on the basis of various factors such as the background of the customer, country of residence, related bank accounts and commercial activities.

How should FI's deal with Politically exposed persons

There is a recommendation by the Financial Crimes Investigation Board (“MASAK”) stating that financial institutions should utilise appropriate risk management policies to determine whether the customer is a PEP. In addition, financial institutions should obtain senior management approval to allow transactions for the PEP and to continue the relationship, if the beneficiary of an existing account turns out to be a PEP. They are also required to take appropriate measures to determine the source of funds of PEPs and apply continuous monitoring of their relationships with PEPs.

What enhanced due diligence must be performed for correspondent banking relationships?

Financial institutions shall take necessary measures in foreign correspondent relationships in order to: a) Obtain, by making use of publicly available resources, reliable information on whether the respondent financial institution has been subject to a money laundering and terrorist financing investigation and been punished as well as information on its business field, reputation and the adequacy of inspection on it; b) Assess anti-money laundering and terrorist financing system of the respondent financial institution and to ascertain that the system is appropriate and effective; c) Obtain approval from a senior manager before establishing new correspondent relationships; d) Clearly determine their and the respondent financial institution’s responsibilities by a contract in a way that meets the obligations in Chapter 3 of Regulation on Measures Regarding Prevention of Laundering Proceeds of Crime and Financing Terrorism; e) In cases where the correspondent relationship includes the use of payable- through accounts, be satisfied that the correspondent financial institution has taken adequate measures pursuant to principles in the Chapter 3 of the Regulation on Measures Regarding Prevention of Laundering Proceeds of Crime and Financing Terrorism and will be able to provide the identification information of the relevant customers when requested.

Are relationships with banks who might be considered a 'shell' and without substance permitted?

Yes. Financial institutions are prohibited to have respondent institution relationships with shell banks or with banks which are not confirmed not to be shell banks.

In what circumstances is additional due diligence required for non face-to-face transactions and/or relationships?

Financial institutions are required to take appropriate and effective measures including paying special attention to operations such as depositing, withdrawing and wire transfers which are carried out by using systems enabling the institutions to conduct non face-to-face transactions, closely monitoring the transactions that are not consistent with financial profile or activities of the customer or do not have connection with their activities, and establishing a limit to amounts and number of transactions.

To whom are SAR's made? (suspicious activity reports)

Suspicious Activity Reports are made to Financial Crimes Investigation Board (“MASAK”)

Link to website of SAR reporting

http://www.masak.gov.tr/en/default.aspx

Other Suspicious or unusual transactions obligations.

a) The obliged parties shall report to Financial Crimes Investigation Board (“MASAK”) any transactions exceeding the amount determined by the Ministry of Finance to which they are party or intermediaries. (For this purpose, transactions which are linked to each other as to their natures shall be considered as a single transaction. Transactions carried out at weekends, on holidays and during night shall be considered as the transaction of the first workday following the date when the transactions were carried out.) b) Transaction types subject to periodically reporting, reporting procedure and periods, excluded obliged parties and other implementation principles and procedures shall be determined by the Ministry of Finance. The Ministry is authorised to determine, separately for each obliged party, the principles and procedures of filling the periodical reporting forms, submitting them to Financial Crimes Investigation Board (“MASAK”) through all types of electronic means and communication forms and using electronic signature in the reports. Application dates for electronic reporting shall be determined by the Ministry of Finance.

Are there any de-minimis thresholds below which transactions do not need to be reported?

Are there any penalties for non compliance with reporting requirements e.g. tipping off?

Yes – Financial Crimes Investigation Board (“MASAK”) states that: “According to Article 13 of Law No. 5549; The obliged parties violating any obligation shall be punished with administrative fine of TRY5,000 by the Presidency. If the obliged 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, administrative fine shall be applied two-fold.”

Are there any requirements (legal or regulatory) to use automated Suspicious Transaction monitoring technology?

No. There is no clear requirement to use automated monitoring technology. However, the Article 5 of Law 5549 states that “In the scope of necessary measures, the Ministry of Finance has the authority to determine obliged parties and implementation principles and procedures, including measures to assign an officer with necessary authority at administrative level for ensuring compliance with this Law and to establish training, internal control and risk management systems by regarding size of business and business volumes.”

Is there a requirement to obtain authority to proceed with a current/ongoing transaction that is identified as suspicious?

Does the local legislation allow transactions to be monitored outside the jurisdiction?

Yes

Is there a legal requirement for a bank’s external auditor/other external organisation to report on the bank’s AML systems and controls?

N/A

If an external report on the bank’s AML systems and controls is required: a) how frequently must the report be provided?

N/A

To whom should the report on AML systems be submitted?

N/A

Is an AML system part of the financial statement audit?

N/A

What are the requirements for the content of this external report on a bank’s AML systems and controls? Does it require: a) sample testing of KYC files? b) sample testing of SAR reports? c) examination of risk assessments?

N/A

Data Protection Laws And Personal Data

N/A

Data Protection for Corporate Data

N/A

Data protection for "sensitive Data" and additional protections.

N/A

Do any restrictions on the transfer of credit reports exist?

N/A

Regulator Acronym

BRSA, CMB

Year of last FATF mutual evaluation

2012

Field 67

financial institution

National ID card details

The Turkish ID card is compulsory for all Turkish citizens from birth

Compulsory?

Passport Photo

practical Guidance yes / no

Is there a risk based approach

Legal Requirement

Regulator allows for monitoring transactions outside jurisdiction

Requirement to proceed

requirement to use automated suspicious transaction tools

Who are SARS made to?

MASAK

shell banks

Yes

EDD for correspondent banking

Yes

Minimum transactions

TRY 20,000;

Min transaction USD

6454

key restrictions

There are no critical exceptions to the law.

Summary

Turkey follows the UNCITRAL model law and is similar to the laws of many EuTurkey follows the UNCITRAL model law and is similar to the laws of many European Union member states. However, its laws are focused solely on the legality of what are called digital, advanced or qualified electronic signatures. These types of signatures require that the signing party have a digital certificate that has been issued by a qualified service provider. Those advanced electronic signatures have the same legal effect as handwritten signatures. There is no clear provision for simple electronic signatures under Turkish law. Summary of law Articles 5 and 22 provide that advanced electronic signatures have the same status as handwritten signatures. The burden is on the party challenging such signatures to prove they are invalid. An agreement shall not be denied legal effect solely on the grounds that such offer or acceptance is made electronically.ropean Union member states. However, its laws are focused solely on the legality of what are called digital, advanced or qualified electronic signatures. These types of signatures require that the signing party have a digital certificate that has been issued by a qualified service provider. Those advanced electronic signatures have the same legal effect as handwritten signatures. There is no clear provision for simple electronic signatures under Turkish law. Summary of law Articles 5 and 22 provide that advanced electronic signatures have the same status as handwritten signatures. The burden is on the party challenging such signatures to prove they are invalid. An agreement shall not be denied legal effect solely on the grounds that such offer or acceptance is made electronically.

If the AML laws and/or regulations became effective in the last 2 years, what were the requirements of the previous AML regime?

N/A

Non financial sector (e.g. casinos, high value goods etc.)

The Undersecretariat of Treasury

Does the country have a risk based approach?

Article 19 of the ‘Regulation On Measures Regarding Prevention Of Laundering Proceeds Of Crime And Financing Of Terrorism’ says that “The obliged parties shall be required to follow up permanently the transactions conducted by their customers whether they are in compliance with the information regarding the customer’s profession, commercial activities, business history, financial status, risk profile and sources of funds within the scope of permanent business relationships and keep up-to-date information, documents and records regarding the customer. Furthermore, the accuracy of information regarding the telephone and fax number and e-mail address of customers received for customer identification shall be verified, if necessary, within the scope of risk-based approach using these means by contacting the relevant person. Financial institutions shall also take the necessary measures in order to follow up the transactions conducted out of permanent business relationship in the risk-based approach. Financial institutions shall establish, with this purpose, appropriate risk management systems.” Separately, the Ministry of Finance has the authority to determine obliged parties and specify the implementation of principles and procedures, including measures to assign an officer with necessary authority at an administrative level for ensuring compliance with this Law and to establish training, internal control and risk management systems regarding the size of business and business volumes.

Where copies of identification documentation are provided, what are the requirements around independent verification or authentication?

Submitted national identification cards, passports, driving licences and residency permits should be originals or copies stamped by the notary public. Trade gazettes and signature circulars should be stamped by Chambers of Commerce and public notaries, respectively