Name
Global FinTech Guide
Country _ Name
Turkey
SectionTitle
KYC requirements
Body
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

Anti-money laundering is regulated by several different laws and regulations under Turkish law, the most important of which are:

  • the Turkish Criminal Law No. 5237 (“TCL”);
  • the Law on the Prevention of Laundering of Crime Revenues No. 5549 (the “AML Law”);
  • the Law on the Prevention of Money Laundering No. 4208 (although many of its provisions have been annulled);
  • the Law on the Prevention of Terrorist Financing No. 6415;
  • the Banking Law No. 5411;
  • the Turkish Misdemeanour Law No. 5326;
  • the Regulation on Measures to Prevent Money Laundering and Terrorist Financing;
  • the Regulation on the Compliance Programme with the Obligations Regarding the Prevention of Laundering of Crime Revenues and Terrorist Financing;
  • the Regulation on Investigation of Money Laundering Offence;
  • General Communiqué for Reporting Suspicious Transactions Regarding Terrorist Financing;
  • General Communiques No. 5, No. 7, No. 8, and No. 13 of the Financial Crimes Investigation Board (“MASAK”).
  • The CML
  • The Communiqué on Principles of Establishment And Activities Of Investment Firms

National regulator or relevant authority for AML controls

In the event that there is any information or suspicion that the assets subject to transactions made or attempted to be made before or through obliged parties are obtained illegally or used for illegal purposes, a reporting obligation is prescribed under the AML Law and the Regulation on the Prevention of Laundering of Crime Revenues and the Prevention of Money Laundering and Terrorist Financing for responsible institutions, such as banks and financial institutions, to detect and report any suspicious transactions to MASAK. In addition, responsible institutions must notify MASAK when a transaction exceeds certain amounts prescribed by law. MASAK has the power to request and access all relevant information. 

Money laundering is also described as a crime under article 282 of the TCL and is subject to criminal prosecution. According to article 160 of the Law of Criminal Procedure No. 5271, as soon as a public prosecutor receives notice of a situation that reasonably indicates that a crime has been committed, by denunciation or any other way, he or she must immediately investigate the truth of the matter to decide whether to file a public lawsuit. The public prosecutor may conduct any kind of investigation directly or through the judicial law enforcement officers under his or her command. The public prosecutor may request information from all public offices to reach a conclusion. The law enforcement authorities that assist the public prosecutors in investigations are the police, the Directorate of Customs Enforcement, the Gendarmerie General Command, and the Coast Guard Command.

Customer Due Diligence

Conduct of a typical KYC identification process

Traditionally, identification is made by face-to-face verification of the identity through an ID card, passport, or other accepted documents. 

In the remote identification, however, the obliged parties may use remote identification methods for the purpose of verifying the identity of the customer in the establishment of a permanent business relationship, if the legislation pertaining to their main field of activity permits
to establish a contract with methods that allow the verification of their identity without confrontation with their customers. These methods are determined separately by the obliged parties. 

Remote communication devices such as information technology or electronic communication devices through an electronic channel can be used in establishing a permanent business relationship with remote identification. 

The method to be applied must be designed to include all the information required for face-to-face identification and to contain minimum risk in the confirmation of the information. It is not mandatory to take a signature sample for remote identification.

The information obtained in remote identification is kept in a way that allows the information and documents for confirmation and the records in all kinds of media to be given to the competent authorities when requested.

With the customer's application, a risk assessment is made about the applicant in order to create and evaluate the customer profile. In this context, in addition to the mandatory information about the customer, at least the purpose and nature of the business relationship, the source of the assets and the funds belonging to the customer, and the average income information, the monthly estimated transaction volume and the number of transactions of the account to be opened are collected.

Moreover, investment firms under the CML must verify the identity information of their customers before opening an account pursuant to the provisions of the AML Law and other relevant legislation. Verification of identity must be made separately for each beneficiary in the case of joint accounts. Other than customer, persons only duly authorised by the customer through a notary certified power of attorney may conduct transactions in the name and account of the customer. Identity information of the proxy must be verified as per second paragraph hereof. Said information and any changes therein will be notified to the authorised clearing and custody institution and/or to Central Registry Agency immediately after receiving such information by investment firms. Investment firms must, before opening an account for foreign banks and intermediary institutions, receive a letter of undertaking from such banks or institutions stating that identity information of their customers for whose account the transactions are executed, will be disclosed.

Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

Not exempted under the Law.

Possibility to outsource customer due diligence by contract to other third parties who are not obliged by law to meet AML regulations and rely on these (e.g., WebID, IDnow, PostIdent)

It is not prohibited under the AML Law. However, it may be regulated or restricted under sector specific regulations. Please see our explanations on outsourcing of AML in banks above in this form. 
 

Presence of a license or registration requirement for the third party in case of outsourcing customer due diligence

There is no specific regulation regarding outsourcing of customer due diligence. No license requirement is foreseen.

Further questions

Entities that could be relied on specifically by law as a third party to comply with AML regulations (regardless of outsourcing)


Yes credit institutions
Yes financial institutions
Yes auditors, external accountants, and tax advisors
Yes notaries and other i
ndependent legal professionals
Yes other trust or company service providers
Yes estate agents
Yes other persons trading high-value goods
Yes providers of gambling services
Yes Insurance, reinsurance and pension companies, and insurance and reinsurance brokers; Crypto asset service providers; those who buy and sell immovables for trading purposes and intermediaries of these transactions; Dealers of any kind of sea, air and land transportation vehicles including construction machines; Dealers and auctioneers of historical artifacts, antiques and works of art; those who operate in the field of lotteries and betting including Turkish National Lottery Administration; Turkish Jockey Club and Football Pools Organisation Directorate; and Sports Clubs.


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