Companies operating in the field of cryptoassets carry many obligations and responsibilities with rapidly evolving legal regulations both in Turkey and on international platforms. The compliance of these companies with the legislation not only increases their reliability, but also protects them from legal risks. Here are the main obligations and responsibilities that companies operating in the crypto asset field must comply with:
1. KYC (Know Your Customer) Obligation
- Crypto asset service providers should implement identity verification processes to recognise their customers.
- Identity information, address information and identity documents must be requested and verified in accordance with the rules set by the CMB and MASAK in Turkey.
- Within the scope of customer identification procedures, anti-money laundering (AML) and counter terrorist financing (CTF) policies must be complied with.
2. Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) Obligations
- Companies should monitor user transactions, report suspicious transactions and fulfil their reporting obligations to competent authorities such as MASAK.
- On a regular basis, the company should review and update its AML/CTF policies and provide necessary training to its employees.
3. Information Security and Data Protection Obligation
- Cyber security should be at the highest level in crypto asset transactions. Companies should implement advanced security protocols to protect user information and assets.
- It must comply with legal obligations regarding the storage, processing and sharing of users’ data with third parties within the scope of the Personal Data Protection Law (KVKK) in Turkey.
4. Tax Liabilities
- Current regulations regarding the taxation of gains from crypto asset transactions in Turkey should be followed.
- According to the tax legislation, earnings must be declared annually and taxes must be paid at the relevant rates.
5. Obligation to Inform Investors and Transparency
- It is important that companies inform their users openly and transparently about the risks of the services they offer on their platforms.
- Investors should be informed about factors such as potential losses and price fluctuations that they may be exposed to.
6. Advertising and Marketing Responsibilities
- Companies in the crypto asset sector should avoid misleading or misinforming in their advertising and marketing activities.
- Regulatory bodies such as the CMB should be complied with, and advertisements and promotions should not include statements that may be perceived as giving “investment advice”.
7. Legal Notification and Reporting Obligation
- Companies should regularly report to the institutions that oversee their activities, and in particular, share financial reports and annual reports on a regular basis.
- Accurate reporting of data such as financial statements, transactions and suspicious activities as well as the volume of user transactions is important.
8. Operating Permit and Licence Obligation
- Companies offering crypto asset trading and custody services in Turkey may need to apply for a licence and undergo the supervision of the relevant regulatory authorities.
- The licensing of companies is important for investor confidence and ensures that they are prepared for new regulations expected in the future.
9. Obligation to Comply with International Legislation
Companies must comply with not only local but also international legislation. For example, it is important to comply with EU regulations, US Securities and Exchange Commission (SEC) rules or AML and CTF regulations in other countries.
Here, we will explain the offence responsibilities respectively.
A.1. Offence of Laundering Proceeds of Crime
The offence of laundering proceeds of crime is defined in Article 282 of the Turkish Penal Code as follows: “Any person who takes the proceeds of crime out of the country or subjects them to various transactions in order to conceal their illegitimate origin or to create an opinion that they were obtained legitimately shall be sentenced to imprisonment from three to seven years and a judicial fine up to twenty thousand days.
In addition, without participating in the commission of the aforementioned offence, the person who buys, accepts, possesses or uses the asset value constituting the subject of this offence, knowing this feature, shall be sentenced to imprisonment from two years to five years.”
In this context, in order to talk about laundering offences in general;
– Firstly, an offence must have been committed.
This offence, which is called a predicate offence, must be regulated as an offence that makes it possible to obtain income and requires a lower limit of six months or more imprisonment in the Turkish Penal Code. For example, drug trafficking, forgery of official or private documents, fraud, theft, plunder, abuse of trust. An economic value must be obtained as a result of the predicate offence. Proceeds of crime are defined as all kinds of economic benefits and values obtained from the acts criminalised by law.
– Lastly, various actions must have been taken in order to make the values obtained appear to have been obtained from a legitimate source and not of an illegal nature.
All kinds of transactions and acts carried out in order to conceal the source of the proceeds of crime or to give the impression that they were obtained through legal means, as well as exporting these economic values abroad.
In order to be able to talk about the laundering offence, an offence must have been committed before the income is obtained.
A.2. The Offence of Financing Terrorism
The offence of financing terrorism is stipulated in Article 4 of the Law No. 6415 as follows “Any person who provides or collects funds to a terrorist or terrorist organisation, even without being associated with a specific act, for the purpose of being used wholly or partially in the realisation of the acts regulated as a crime under Article 3, or knowing and willingly knowing that they will be used, shall be sentenced to imprisonment from five to ten years, unless the act constitutes another crime requiring a more severe penalty.”
In summary; Providing or collecting funds to a terrorist or terrorist organisation for the purpose of being used or knowing and willingly knowing that they will be used in the realisation of the acts prohibited in Article 3 of the Law constitutes the crime of financing terrorism. It is known that terrorists and terrorist organisations have to find financial resources in order to finance their activities, even if their ultimate goal is not to generate income.
Terrorist financing can be provided from illegal sources as well as legal sources.
These sources can be summarised as follows: Dues and donations: People who are not members of terrorist organisations and who have no connection with the organisation may donate to terrorist organisations voluntarily or out of fear. These donations or aids can be made directly in cash or by providing food, medicine, equipment, etc. Use of non-profit organisations: Donations collected through non-profit organisations can also provide financial resources to terrorist organisations. Most of the time, donors do not know that the money they give will be transferred to terrorist organisations, and they give financial aid with the belief that it will be used within the framework of the legal purpose declared by these organisations.
Revenues from organisational publications: Terrorist organisations not only use the newspapers, magazines and books they publish to spread their ideology and educate their supporters in theoretical training, but also provide financial resources by selling these publications to their sympathisers.
External support: Throughout history, terrorism has been a foreign policy tool that some states have used and are using directly or indirectly (as a requirement of their domestic and international policies). External support plays a major role in the growth of terrorist organisations. It is difficult for a terrorist organisation without external support to continue its activities and to meet its needs such as nutrition, shelter, education, weapons, etc. only with internal resources.
Countries that support terrorist organisations provide assistance to terrorist organisations by granting them asylum, allowing them to establish subsidiary organisations such as associations and publications, providing them with arms, ammunition and ammunition, and providing them with logistical facilities such as shelter, clothing and food.
Commercial activities: Support for terrorist organisations can also be provided through the creation of enterprises operated by persons who are members of terrorist organisations, who have left membership, or who are apparently unconnected with the financing of terrorism, and through the transfer of legitimate commercial earnings.
Social events: Large amounts of money can be collected by terrorist organisations through social events such as concerts, festivals, exhibitions and shows.
Drug trafficking: Drug trafficking is an important source of income for terrorist organisations as it is a commodity with a very high return, easy to transport, abundant buyers, strong elasticity of demand, exchangeable for valuable currency in circulation, effortless to produce and easy to market.
Ransom kidnapping: Kidnapping for ransom is one of the financing methods used by organisations. When the organisation proves its success in these activities, it does not need to kidnap people and can continue to generate income through intimidation or threats.
Extortion: Extortion is carried out by organisations through methods such as protection, non-harm and threats. In this regard, forced collection of money from individuals under the name of “tax” is also encountered. Forgery: Today’s printing technology and the easy availability of all kinds of printing tools, equipment and materials have made organisations specialised in counterfeiting. In addition to printing fake money, organisations have also specialised in printing fake passports. Organisations, which print fake passports and ID cards primarily for their own members, can also provide income by printing fake passports and ID cards for organised crime groups upon request. Human trafficking: Terrorist organisations, which are in close connection with illegal migration organisations, both provide financial income and recruit recruits through human trafficking. Apart from these, illegal acts such as fraud, robbery, extortion and theft are also among the financing sources of terrorism.
Obligations
In order to prevent laundering proceeds of crime and financing of terrorism, to ensure effectiveness in combating these offences and to prevent the use of the financial system by criminals, “obligors” have been defined in the relevant legislation and certain obligations have been imposed on obligors. There is a possibility that financial and non-financial institutions and some business and professional groups, which are defined as obligors, may be used as intermediaries by criminals due to their fields of activity and the services they provide.
In other words, transactions and services provided by obliged parties may be used by criminals to commit offences. In order to prevent this situation and to raise the awareness of the obliged parties about the offences of laundering and financing of terrorism and the fight against these offences, it has been tried to ensure that they undertake a “preventive” function.
Therefore, the obliged persons are the most important stakeholders of the Financial Crimes Investigation Board in the fight against crime. The obligors are defined in Article 2/1-d of the Law No. 5549 on Prevention of Laundering Proceeds of Crime and Article 4/1 of the Regulation on Measures to Prevent Laundering Proceeds of Crime and Terrorist Financing (Measures Regulation). According to subparagraph (ü) added to the first paragraph of Article 4 of the Measures Regulation with the amendment to the Regulation published in the Official Gazette dated 01 May 2021 and numbered 31471, “crypto asset service providers” have been included among the obliged parties as of the said date. In the Regulation on the Non-Use of Crypto Assets in Payments published by the Central Bank of the Republic of Turkey, crypto assets are defined as “intangible assets that are created virtually using distributed ledger technology or a similar technology and distributed over digital networks, but are not considered as fiat money, dematerialised money, electronic money, payment instrument, security or other capital market instrument”. Crypto asset service providers, on the other hand, intermediate the trading of such crypto assets through electronic trading platforms.
Liabilities
It was stated in the previous section that in order to prevent laundering proceeds of crime and financing of terrorism, to ensure effectiveness in combating these offences and to prevent the use of the financial system by criminals, “obligors” are determined in the relevant legislation and certain “obligations” are imposed on the obligors.
The aforementioned obligations are defined in Articles 3 to 9/A of Law No. 5549, and more detailed regulations regarding the obligations are included in the relevant Regulations and Communiqués
. In this context, the obligations that crypto asset service providers are subject to can be listed as customer recognition, suspicious transaction notification, providing information and documents, continuous information provision and preservation and submission.
Obligation to Recognise the Customer
Pursuant to Article 3 of the Law No. 5549, within the scope of the principles regarding customer identification, obligors are obliged to determine the identities of those who make transactions and those on whose behalf or accounts transactions are made, and to take other necessary measures before the transactions are made in the transactions made before them or in the transactions they intermediate. Detailed regulations on customer identification are set forth in Articles 5 to 26/A of the Measures Regulation.
The most important measure to be taken within the scope of the obligation to recognise the customer is “identification”.
The said Regulation explains in detail in which transactions and how identification will be made, and accordingly, the transactions that require identification are categorised as those that depend on the transaction amount and those that do not. Since it is essential to conclude a contract between the crypto asset service providers and the users who will receive services from these platforms and subsequent transactions can be carried out within the scope of the membership established based on the contract, the business relationship in question falls within the definition of “continuous business relationship” and it is necessary to determine the identity of the contracted users and those acting on behalf or account of these users by obtaining information regarding the identity regardless of the amount during the conclusion of the contract and confirming the accuracy of this information.
Crypto asset service providers; except for the establishment of a continuous business relationship, – Regardless of the amount in cases requiring suspicious transaction notification, – Regardless of the amount when there is doubt about the adequacy and accuracy of the previously obtained customer identification information,
-When the transaction amount or the total amount of more than one interconnected transaction is seventy-five thousand TL or more, they are obliged to make identification.
Identification must be completed prior to the establishment of a business relationship or transaction.
Identification Obligation for Natural Persons Identification for natural persons is regulated in Article 6 of the Measures Regulation. The said article includes the information to be taken within the scope of identification, the information to be confirmed from the information received and the documents based on confirmation.
Information to be taken within the scope of identification:
Identification of natural persons;
The name, surname, place and date of birth, nationality, type and number of the identity document, address and signature sample, information on work and profession, telephone number, fax number, e-mail address, if any, and for Turkish citizens, the name of the mother, father and Turkish ID number in addition to this information.
The information received within the scope of identification needs to be confirmed: The accuracy of the information regarding the name, surname, date of birth, Turkish ID number (for Turkish citizens) and the type and number of the identity documents should be confirmed on the Turkish identity card, Turkish driver’s licence or passport for Turkish nationals and identity documents with the Turkish ID number on them and clearly stated in special laws to be official identity documents, passport, residence document or identity document deemed appropriate by the Ministry for non-Turkish nationals.
A readable photocopy or electronic image is taken after the submission of the original or notarised copies of the identity documents to be presented when requested by the authorities, or information regarding the identity is recorded.
The accuracy of the address declared in the establishment of a permanent business relationship shall be confirmed by means of a certificate of residence, an invoice issued in the name of the relevant person for a service requiring subscription such as electricity, water, natural gas, telephone and issued within three months prior to the transaction date, or other documents and methods deemed appropriate by the Presidency.
A readable photocopy or electronic image of the documents that are the basis for confirmation shall be taken or the distinctive information of the document shall be recorded. Identification Obligation of Legal Entities Registered in the Trade Registry Identification of legal entities registered in the trade registry,
It is regulated in Article 7 of the Regulation on Measures. The said article includes the information to be taken within the scope of identification, the information to be confirmed from the information received and the documents for confirmation.
Information to be taken within the scope of identification:
The title, trade registry number, tax identification number, field of activity, open address, telephone number, fax number and e-mail address of the legal entity, the name, surname, place and date of birth, nationality, type and number of the identity document and signature sample of the person authorised to represent the legal entity, and for Turkish citizens, in addition to this information, the name of the mother, father and Turkish ID number.
Those that need to be confirmed from the information received within the scope of identification:
The confirmation of the title, trade registry number, field of activity and address of the legal entity will be made through the documents related to the registration in the trade registry, and the confirmation of the tax identification number will be made through the documents issued by the relevant unit of the Revenue Administration.
The accuracy of the identity information of the persons authorised to represent the legal entity shall be confirmed through the identity documents required for real persons, and their representation authority shall be confirmed through the registration documents.
A readable photocopy or electronic image is taken after the submission of the originals or notarised copies of the documents that are the basis for confirmation, or information regarding the identity is recorded in order to be presented when requested by the authorities.
Identification of legal persons resident abroad shall be made on the copies of the documents corresponding to the documents required for legal persons resident in Turkey in the relevant country, certified by the consulates of the Republic of Turkey or certified by the authority of the country party to this Convention within the framework of the Convention on the Abolition of the Requirement of Legalisation of Foreign Official Documents.
In addition, within the framework of risk-based approach, identity information is confirmed through notarised Turkish translations of these documents when necessary. Articles 8 to 17 of the Regulation on Measures for the Prevention of Laundering Proceeds of Crime and Financing of Terrorism provide for the identification of other types of customers. Other types of customers are associations, foundations, trade unions, confederations, political parties, organisations without legal personality, public institutions, those acting on behalf of others and those acting on behalf of others.
Identification in Subsequent Transactions According to Article 16 of the Regulation on Measures, in the subsequent transactions of those whose identity has been duly identified before, which are made face-to-face within the scope of a continuous business relationship and require identification, information regarding identity is obtained and this information is compared with the information available in the obliged person. After the comparison, the name and surname of the real person who has the transaction written on the relevant document and a signature sample is taken.
If there is any doubt about the accuracy of the information received, this information is verified by comparing the information contained in these documents with the information in the obliged person after the submission of the identity documents or their notarised copies.
In subsequent transactions that require identification, which are carried out using systems that enable non-face-to-face transactions and require identification, necessary measures are taken to verify customer identity and to keep the information within the scope of identification up to date.
Subsequent transactions of seventy-five thousand Turkish Lira and above by users who have established a continuous business relationship by entering into a membership agreement with crypto asset service providers will be considered as subsequent transactions. In cases where crypto asset service providers do not meet face to face with the customer/user, how is identification performed?
The above-mentioned identification procedure for natural persons and legal entities registered in the trade registry is regulated by taking into account the situations where the obligor and the customer are face-to-face. However, in cases where cryptoasset service providers do not meet their customers face-to-face, they may fulfil their identification obligations through couriers and external support units (support service organisations). Since couriers and external support units act on behalf of cryptoasset service providers, they cannot be considered as third parties.
These persons should be considered as employees who assist the relevant crypto asset service providers in the proper fulfilment of the identification, which is an obligation of the crypto asset service providers. Therefore, the relevant crypto asset service providers are responsible for the transactions carried out by these persons within this scope. In order for crypto asset service providers to receive such services from courier and external support units, it is necessary to conclude a contract with the said units, and the subject, scope and responsibilities of the parties should be clearly and understandably expressed in the said contract. In determining the scope of the agreement, the conditions regarding the support service in the “Regulation on Outsourcing of Support Services by Banks” published by the Banking Regulation and Supervision Agency and the conditions regarding outsourcing services in the Ninth Section titled “Principles Regarding Outsourcing of Intermediary Institutions” of the “Communiqué on the Principles of Establishment and Activities of Investment Institutions” published by the Capital Markets Board may be used. On the other hand, crypto-asset service providers as “Obligors Carrying Out Their Activities Exclusively in Electronic Environment” may benefit from the provisions regarding Simplified Measures if they fulfil the conditions specified in Article 2.2.10 of the General Communiqué of the Financial Crimes Investigation Board No. 5. However, for this purpose, the conditions specified in the relevant article must be fulfilled. (The conditions in question are briefly as follows: – An agreement has been made with the bank resident in Turkey that the collection and payment transactions regarding the goods or services offered will be carried out electronically, – Confirmation of identity information by querying the database of the General Directorate of Population and Citizenship Affairs of the Ministry of Interior). Refusal of the Transaction and Termination of the Business Relationship Article 22 of the Measures Regulation regulates the refusal of the transaction and termination of the business relationship. Accordingly; In cases where identification cannot be made or sufficient information cannot be obtained about the purpose of the business relationship; the business relationship cannot be established and the requested transaction cannot be performed. In cases where the identification and confirmation of identity cannot be made due to doubts about the adequacy and accuracy of the previously obtained customer identification information, the business relationship should be terminated and it should also be evaluated whether these issues are suspicious transactions.
Suspicious Transaction Notification Obligation
There are two different approaches to combating money laundering and terrorism financing offences. The first one is the so-called suppressive or deterrent measures, which aim to investigate, examine and uncover the offence committed, the perpetrators, the criminal act and the related proceeds of crime.
The second and more important approach is the set of activities called “preventive measures” aimed at preventing the commission of laundering and terrorist financing offences from the very beginning.
Suspicious transaction reporting (STR) is one of the most important elements of the fight against laundering and terrorist financing offences. Suspicious transaction notification aims to detect and prevent laundering and terrorist financing activities with the co-operation of obliged parties and the Financial Intelligence Unit (MASAK). Suspicious transaction is defined in Article 4/1 of the Law No. 5549 and Article 27/1 of the Measures Regulation, and the procedures and principles of suspicious transaction notification are regulated in Articles 27 to 30 of the Measures Regulation and MASAK General Communiqué No. 13. A suspicious transaction is any information, suspicion or suspicion that the assets subject to the transaction made or attempted to be made by or through the obliged parties have been obtained illegally or used for illegal purposes, or used for terrorist acts or used by terrorist organisations, terrorists or terrorist financiers, or related or connected to them. “Suspicion” refers to a subjective situation that may arise in those who perform and/or intermediate the transaction that the funds or assets subject to the transaction may have been obtained from an illegal source or will be used for an illegal purpose. The obligor determines his/her subjective assessments according to his/her perceptions and intuitions, the behaviour of the customer during the transaction, the information previously obtained about the customer, the compatibility of the transaction and the amount of the transaction with the financial profile of the customer and other factors. When a suspicious transaction is encountered, a suspicious transaction notification must be made to the MASAK Presidency by filling out the Suspicious Transaction Notification Form (SIB form) within the framework of the information and findings obtained after conducting an investigation on the transaction to the extent of the authorisation and possibilities. Suspicious transactions shall be notified to the MASAK Presidency regardless of any monetary limit. The fact that suspicious transactions are reported within the scope of continuous information provision does not remove the obligation to report suspicious transactions.
* The term “transaction” in the concept of suspicious transaction is not limited to a single transaction, but may cover multiple transactions.
* When multiple transactions are evaluated together, a single SIB form is issued for suspicious transactions. Suspicious transaction notification should not be confused with a denunciation. First of all, the suspicious transaction notifications sent to the MASAK Presidency, which is an administrative unit, are tried to concretise the suspicion arising before the obligor, and no action is taken for suspicious transaction notifications that cannot be linked to laundering and terrorist financing offences.
The sender of the notification is never disclosed from the first to the last stage of the suspicious transaction. If it is understood that the suspicion is based on concrete evidence during the analysis stages carried out in full confidentiality, only then the file is forwarded to the judicial authorities together with the necessary evidence, information and documents, again without revealing the identity of the sender.
Suspicious transactions must be reported to the MASAK Department within ten business days at the latest from the date of suspicion.
What types of transactions may be suspicious?
It is obvious that the existence of “information” about the transactions and customers subject to the suspicious transaction report based on the press or similar sources is a situation that requires a suspicious transaction report to be made directly. The question is how to determine the existence of a suspicion or a matter that requires suspicion? Suspicious transactions are a product created by the obligor and/or its employees within the scope of combating possible financial crimes by starting from behaviours that even a person with a reasonable mind would suspect and supporting them with various donations such as knowledge, experience and professional responsibility. In this context, the suspicious transaction types in the “Sectoral Suspicious Transaction Notification (SFT) Guides” on the official website of the MASAK Presidency have been determined to guide you in identifying suspicious transactions, and you should not limit yourself to only the types of suspicious transactions; you should report suspicious transactions even if the suspicious transaction does not fit any of the types listed. At the end of the guide, suspicious transaction types are given as examples.
During the notification process, it may be necessary to conduct a more detailed investigation into the nature of the transaction or the customer profile. The purpose of this investigation to be conducted to the extent of the authorisation and possibilities is to determine whether there are additional findings to support the suspicion. During the investigation, attitudes and behaviours that may cause the customer to suspect that a notification will be made about him/her should be avoided. In cases requiring suspicious transaction notification, necessary identification procedures should be carried out by you. However, in cases where the suspicious transaction subject to the notification remains at the attempt stage and is not realised, the identification obligation is fulfilled to the extent possible. The fact that a suspicious transaction notification has been made to the MASAK Presidency may not be disclosed to anyone, including the parties to the transaction, except for the audit staff assigned with liability audit and the courts during the proceedings. Violators shall be sentenced to imprisonment from one to three years and a judicial fine up to five thousand days.
Obligation to Provide Information and Documents
Pursuant to Article 7 of the Law No. 5549 on Prevention of Laundering Proceeds of Crime, public institutions and organisations, real and legal persons and entities without legal personality are responsible for providing all kinds of information, documents and records in all kinds of media related thereto to be requested by the Presidency and audit staff, all information and passwords necessary to access these records or to make them readable, fully and accurately and to provide the necessary convenience. Without prejudice to the provisions regarding the right of defence, those who are requested may not refrain from providing information and documents by claiming the provisions written in special laws.
Preservation and Presentation Obligation
Pursuant to Article 8 of the Law No. 5549 on Prevention of Laundering Proceeds of Crime, obliged parties are obliged to keep the documents in all kinds of media related to the obligations imposed by the aforementioned Law and their transactions for a period of eight years from the date of issue, books and records from the date of the last record, and documents related to identification for a period of eight years from the date of the last transaction and to submit them to the authorities upon request. According to Article 6 of the Law No. 5549 on Prevention of Laundering Proceeds of Crime, obliged parties are obliged to notify the Presidency of the transactions to which they are a party or intermediary, exceeding the amount to be determined by the Ministry. The types of transactions within the scope of continuous disclosure of information, how and within what periods the information will be provided, the obligors to be excluded from the scope and other procedures and principles regarding the implementation shall be determined by the Ministry.
In this context, you are obliged to provide continuous information within the procedures and principles determined by our Ministry.
Sanctions
According to the first paragraph of Article 13 of the Law No. 5549, in the event that violations of the obligation to recognise the customer, the obligation to provide continuous information and the obligation to report suspicious transactions are detected as a result of the obligation audits, MASAK imposes administrative fines in the amounts specified in the Law and per transaction. The total amount of the administrative fine to be imposed cannot exceed a certain amount for each obligation as of the year of the violation. In the event of a violation of the same type of obligation in the following year, these limits are applied twice as much. In this context, based on the amendment made in Article 13 of the Law No. 5549 with the Law No. 7262, the following administrative fines and upper limits are applied for breaches of obligations in 2021.
According to the seventh paragraph of Article 17 of the Law No. 5326 on Misdemeanours; administrative fines shall be applied by increasing the revaluation rate determined and announced in accordance with the provisions of the repeated Article 298 of the Tax Procedure Law No. 213 dated 4.1.1961 and dated 4.1.1961 for that year, effective from the beginning of each calendar year. Again, according to Article 14 of the Law No. 5549; in case of breach of the obligation stipulating that “obliged persons shall not disclose the fact that a suspicious transaction notification has been made to anyone other than the audit staff assigned with the audit of the obligation and the courts during the proceedings” and in case of breach of the obligations to provide information and documents and to preserve and submit, imprisonment from one year to three years and a judicial fine up to five thousand days shall be sentenced. Specific security measures shall be imposed on legal entities for this offence.
Sample Suspicious Transaction Types Types Related to Customer Profile
In the applications of customers to obliged persons;
The documents required to be submitted or deposited contain insufficient information, the information provided is contradictory or there is reluctance to provide information. The existence of a concrete situation that requires suspicion, such as the offer of money or various gifts for making a transaction, or the existence of negative news about the customer in the media related to laundering proceeds of crime or financing terrorism. The customer deviates from the general customer behaviour patterns, for example, sometimes very close, sometimes threatening behaviour in order to prevent the reporting of suspicious transactions. There is no reasonable proportion between the customers’ business/profession, financial status and transactions. Customers have a commercial or other relationship with risky persons or organisations. The companies have an unusual capital, shareholding, management and employment structure compared to other organisations in the sector of activity or company structures in general.
Types of Realised Transactions
Individual transactions that should be repeated within the scope of the activities of persons or entities engaged in commercial activities remain as individual transactions or, on the contrary, continuous repetition of transactions that are not frequently performed in ordinary commercial life. Dividing the financial transactions, which should be made collectively in customary practices, without a reasonable justification in order to avoid detection and notifications. The transaction performed or intended to be performed does not have a customary and reasonable legal or economic justification or logic. Unusual use of payment instruments, such as the customer making a large cash payment in small denominations or a payment in a foreign currency that is not frequently used.
General Types Related to Transactions
The customer tries to obtain information about identification and suspicious transaction reporting obligation, transaction limits, control methods of the obligor in the fight against money laundering before making a transaction and asks questions in this direction. Difficulties encountered in obtaining personal information such as activity, occupation or identity, address and telephone from the customer. The customer has difficulty in explaining or refrains from providing information about the purpose of the transaction or the source of the funds subject to the transaction. The customer attempts to persuade the obliged transaction officer not to submit or complete a document that is legally or administratively required to be submitted or completed. Customers acting apparently independently from each other provide the same address, telephone and similar contact details.
In the accounts of persons who are not related to each other by kinship or any business relationship and who have opened a joint time deposit account, there is a remarkable and intensive cash transaction or electronic transfer traffic directed from within and outside the country that does not comply with the savings deposit profile.
Real or legal persons or entities appearing as partners or managers of legal entity customers are not real partners or managers of the company; there is information or a situation that requires suspicion that the capital and management of the company is under the control of third parties with a bad reputation or known to have been sued or investigated by the official authorities. The new controlling shareholder and/or partners of legal entity customers refrain from providing information about their personal and commercial background, and there are indications that they do not have any interest, education and work experience in the field in which the company operates.
Attempts by the customer to make transactions or to have transactions made on behalf of others under a name suspected to be fake or fictitious without presenting an identity card or valid identity document. Offer, pressure or threat by the customer to the obliged employees not to report suspicious transactions
Types of Transactions with Persons Suspected of Links with Terrorist Organisations or with High-Risk Countries
Carrying out transactions or opening accounts with the obligor on behalf of real and legal persons known to be linked to a terrorist organisation, and making electronic fund transfers in connection with the account. Transferring money electronically to a commercial account opened in risky countries with no commercial explanation and economic purpose and/or withdrawing these funds from the account.
Sending or receiving funds to and/or from risky countries, opening accounts in financial institutions in these countries or using credit cards issued by banks in these countries Transferring funds on behalf of the customer to countries where terrorism and smuggling are intensely seen or known as tax havens and where there is no open business connection with the customer by exchanging foreign currency by third parties. Transferring deposits created in a short period of time as a result of transfer transactions from or through risky countries to third parties. Collecting funds from or to particularly risky countries by using a large number of individual and commercial accounts and directing these funds to a small number of beneficiaries.
The use of financial transactions of a commercial nature in the transfer of funds from or to risky countries, without a commercial purpose that would make the transaction reasonable.
Situations That May Occur as a Result of a Suspicious Transaction
As a result of suspicious transactions, the accounts of the Company or the relevant persons are blocked by the Ministries or Prosecutor’s Offices.
Although the amount and type of this blockage varies depending on the specific case, most investigations remain idle due to lack of legislation and inadequate equipment.
For this reason, the follow-up of the process with specialised and experienced lawyers in this field is extremely important for the fast and complete removal of the blocks.
This is because the company cannot continue its activities until the blocks are removed.
These blocks are regulated under Article 128 of the Code of Criminal Procedure. This Article
In cases where there is a strong reason for suspicion based on concrete evidence that the offence subject to investigation or prosecution has been committed and obtained from these offences, the suspect or defendant;
a) Immovables,
b) Land, sea or air transport vehicles,
c) All kinds of accounts in banks or other financial institutions,
d) All kinds of rights and receivables before real or legal persons,
e) Negotiable instruments,
f) Partnership shares in the company in which he/she is a partner,
g) Safe deposit boxes are available,
h) Other assets may be seized. Seizure may be made even if these immovable properties, rights, receivables and other assets are in the possession of a person other than the suspect or the accused. (Additional sentence: 21/2/2014 – 6526/10 Art.) In order to take a seizure decision within the scope of this article, a report on the value obtained from the crime shall be obtained from the Banking Regulation and Supervision Agency, Capital Markets Board, Financial Crimes Investigation Board, Undersecretariat of Treasury and Public Oversight, Accounting and Auditing Standards Authority. This report shall be prepared within three months at the latest. When special reasons necessitate, this period may be extended by two months upon request.(1)
(2) Provision of the first paragraph;
a) Defined in the Turkish Penal Code;
- Genocide and crimes against humanity (Articles 76, 77, 78),
- Smuggling of migrants and trafficking in human beings (Articles 79, 80) and trafficking in organs or tissues (Article 91),
- Theft (Articles 141, 142),
- Looting (Articles 148, 149),
- Abuse of confidence (Article 155),
- Fraud (Articles 157, 158),
- Fraudulent bankruptcy (Article 161),
- Manufacture and trafficking in narcotic or stimulant substances (Article 188),
- Forgery of money (Article 197),
- (Repealed: 21/2/2014 – 6526/10 Art.; Revised: 24/11/2016 – 6763/25 Art.) Establishing an organisation to commit crime (Article 220, paragraph three),
- Bid rigging (Article 235),
- Collusion in the performance of an obligation (Article 236),
- (Additional: 24/11/2016-6763/25 Art.) Usury (Article 241), (2)
- Embezzlement (Article 247),
- Deceit (Article 250)
- Bribery (Article 252),
- Offences against the Security of the State (Articles 302, 303, 304, 305, 306, 307, 308),
- (Amended: 2/12/2014-6572/41 Art.) Crimes against the Constitutional Order and the Functioning of this Order (Articles 309, 311, 312, 313, 313, 314, 315, 316),
- Offences against State Secrets and Espionage (Articles 328, 329, 330, 331, 333, 334, 335, 336, 337).
b) Offences of arms smuggling as defined in the Law on Firearms, Knives and Other Instruments (Article 12),
c) Embezzlement offence defined in paragraphs (3) and (4) of Article 22 of the Banking Law,
d) Offences defined in the Anti-Smuggling Law and punishable by imprisonment,
e) Offences defined in Articles 68 and 74 of the Law on the Protection of Cultural and Natural Heritage
(3) The decision to seize the immovable shall be executed by annotating it in the land registry.
(4) The seizure order issued on land, sea and air transport vehicles shall be executed by annotating the registry in which these vehicles are registered.
(5) The decision to seize all kinds of accounts in banks or other financial institutions shall be executed by immediately notifying the relevant bank or financial institution through technical means of communication. The said decision shall also be notified to the relevant bank or financial institution. After the seizure decision has been taken, any transactions made on the accounts in order to neutralise this decision shall be invalid.
(6) The decision on seizure of the partnership shares in the company shall be executed by immediately notifying the relevant company management and the trade registry office where the company is registered by technical means of communication. The said decision shall also be notified to the relevant company and the trade registry directorate.
(7) The decision on seizure of rights and receivables shall be executed by immediately notifying the relevant real or legal person through technical means of communication. The said decision shall also be notified to the relevant real or legal person.
(8) In case of breach of the requirements of the seizure decision taken in accordance with the provisions of this Article, the provisions of Article 289 of the Turkish Criminal Code entitled “Abuse of custody duty” shall apply.
(9) (Amended: 24/11/2016-6763/25 Art.) Only a judge may decide on the seizure pursuant to the provisions of this Article and the appointment of a trustee pursuant to the tenth paragraph.
(10) (Addition: 15/8/2016-KHK-674/13 Art.; Accepted as it is: 10/11/2016-6758/13 Art.) A trustee may be appointed for the management of immovables, rights and receivables seized pursuant to this article, and when necessary, for the management of these assets. In this case, the provisions of Article 133 shall apply by analogy.
Although these blocks are in the nature of a precautionary measure, in practice, they are frequently imposed by the prosecutor without a judge’s request, which is a breach of procedure.
