Turkey: CIRCULAR Number 75 - Statute 4208 Concerning The Prevention Of Money-Laundering

Last Updated: 5 December 1996
Reference: YMM-200-S/6366

Statute 4208 concerning the prevention of money-laundering was passed by the Grand National Assembly on November 13th and went into effect with its publication in issue 22822 of the official gazette on 19 November 1996. This circular discusses the new law in detail, dwelling on a number of important practical issues.

A. OBJECT OF THE LAW

The purpose of the act is to prevent the laundering of illicit funds.

B. DEFINITION OF ILLICIT FUNDS

Article 2 of the law defines "illicit funds" to be money, all negotiable instruments, goods, or revenues that have been secured as a result of the commission of any of the acts referred to in the laws cited below as well as any and all material benefits and values that are secured as a result of converting such money, instruments, goods, or revenues into one another (including their exchange from one currency unit to another).

C. CRIMINAL ACTS THAT ARE CONSIDERED TO GIVE RISE TO ILLICIT FUNDS

1. The following offenses set forth in Statute 1918 concerning the prohibition and prosecution of smuggling:

a) Importing any substance or article into Turkey without clearing it through customs;

b) Importing into or exporting from Turkey any substance or article whose importation into or exportation from Turkey is prohibited;

c) Knowingly transporting smuggled articles from any location within the country to another location within the country, or purchasing, selling, or storing them, or offering them for sale, or acting as an intermediary in their purchase or sale;

d) Importing, transporting, concealing, selling, knowingly accepting, purchasing, using, or consuming any substance subject to a state monopoly without being entitled or authorized to do so;

e) Using or selling any substance that has been imported duty-free or with reduced duties under particular laws for specific purposes or any government-supplied substance that is subject to duty or monopoly in any way other than that for which it was allocated, or knowingly purchasing the same, or receiving the same when one has no legal right to do so or receiving more than one is legally entitled to, or to fill out, have certified, or certify declarations pertaining to such matters.

2. The offenses set forth in Statute 6136 concerning firearms and knives (offenses involving illegal trade in weapons).

3. The offenses set forth in Statute 2238 concerning the receipt, storage, and transport of organs and tissues (offenses involving illegal trade in organs and tissues).

4. The offenses set forth in Statute 2863 concerning the protection of cultural and natural properties (offenses involving smuggling of antiquities and of protected natural properties and the illegal trade therein)

5. The following acts of tax evasion as set forth in subparagraphs 2 and 3 of article 344 of the Tax Procedures Code (Statute 213):

a) Drawing up documents that are false or misleading in terms of their contents or causing a tax loss by knowingly making use of them;

b) Fraudulently altering documents, drawing up documents and copies that do not conform to their originals, or knowingly causing a tax loss by making use of documents that have been fraudulently altered as well as documents and their copies that have been drawn up in a manner not conforming to their originals.

6. Offenses against the sovereign personality of the state as set forth in the Turkish Penal Code (Statute 765) and, from the same law:

a) Acts of ransoming as set forth in article 179;

b) Acts of blackmail as set forth in article 192;

c) Illegal traffic in and transport of explosives as set forth in article 264;

d) The acts of counterfeiting as set forth in articles 316, 317, 318, 319, 322, and 325;

e) The acts of fraud as set forth in articles 332, 333, 335, 339, 341, 342, 345, and 350;

f) Acts related to trade in narcotics as set forth in articles 403, 404, and 406;

g) Acts related to prostitution as set forth in articles 435 and 436;

h) Acts related to looting, banditry, and kidnapping as set forth in articles 495, 496, 498, 499, and 500;

i) Acts of swindling and fraudulent bankruptcy as set forth in articles 504 and 506.

D. THE CRIME OF MONEY-LAUNDERING

The law defines the crime of money-laundering has having occurred whenever illicit funds that have been secured as a result of the commission of any of the acts referred to above

1. are taken advantage of by those securing them for the purpose of acquiring legitimacy for the funds;

2. are acquired by others even though it was known the funds had been secured illicitly;

3. are found in one's possession;

4. are used by those securing them or by others;

5. are subjected to an alteration of source, or nature, or possessorship, or ownership;

6. are concealed, or are moved across national borders, or their movement across national borders is concealed;

7. are subjected to an alteration of source or location with the aim of aiding someone who has committed any of the above-cited offenses to avoid the legal consequences of his acts, or are laundered through transfers, or are the object of attempts to hinder the identification of illicit funds.

E. EMPOWERED MINISTRY AND UNITS

The law empowers the Ministry of Finance to take action in combating money-laundering and for this purpose a "Department of the Fiscal Offense Investigation Board". This board will carry out its duties of investigating and studying money-laundering offenses through fiscal inspectors, auditors, revenue comptrollers, sworn bank auditors, Treasury comptrollers, and Capital Market Board experts. Within this framework these authorities are empowered to demand information and documents on matters falling within the scope of their duties, to perform investigations and examinations, to monitor and scrutinize performance, and for this purpose to examine any and all manner of documents.

F. OBLIGATION TO PROVIDE INFORMATION AND DOCUMENTS

Public agencies and organizations as well real persons and legal entities are obliged to adduce all documents and information that may be demanded by those empowered by the law. Under article 12 of the law, those who fail to comply with this obligation are to be punished by prison sentences of from six months to one year and by fines of from twelve million to one hundred twenty million liras.

G. PENALTIES FOR THE CRIME OF MONEY-LAUNDERING

Those committing acts of money-laundering are to be penalized by prison sentences of from two to five years and by fines equal to twice the amount of money laundered. Goods and assets (including any interest their on) falling within the scope of illicit funds will be confiscated. If the goods etc themselves cannot be seized, recourse will be had to property assets corresponding to the same value.

If illicit funds have been secured as a result of terrorist crimes or of the illegal movement of any substance or article whose importation into or exportation from Turkey is prohibited by law or if the offense is committed with the aim of securing resources for the commission of terrorist crimes, the minimum prison sentence that can be imposed is four years.

The law also provides for a doubling of penalties depending upon the professional positions of those committing the offenses and of the manner in which an offense is committed.

Situations that necessitate this doubling of penalties are the following:

  • An offense is committed by those who have formed an organization with the purpose of laundering illicit funds as well as by those managing such an organization and by its members
  • An offense is committed by a civil servant or public officer in the course of his duties or by anyone working in any entity engaged in activities governed by the Banks Act (Statute 3182), the Insurance Control Act (Statute 7397), the Financial Leasing Act (Statute 3226), the Law concerning the Protection of the Value of the Turkish Currency (Statute 1567), the Capital Market Act (Statute 2499), and laws and regulations governing the business of lending money or pertaining to principles and procedures concerning the establishment, activities, and winding-up of private finance houses.
  • An offense is committed along with the use of force, threats, or weapons.

If offenses related to illicit funds are committed within a corporate entity, the same penalties will be imposed on those in positions of authority who committed the acts and, in addition, the corporate entity will be levied a fine of from five hundred million liras to five billion liras.

H. STATUTE OF LIMITATIONS

The statute of limitations on the investigation of offenses related to the laundering of illicit funds is ten years.

I. PRECAUTIONARY MEASURES

In situations where there is serious circumstantial evidence concerning money-laundering, justices of the peace (during the preliminary investigation phase) and courts (during the trial phase) are authorized to freeze all entitlements and claimsincluding the contents of safe-deposit boxesheld by banks and non-bank financial institutions as well as by other real persons and legal entities; to completely or partially void powers of disposition thereto; to order the seizure of goods, negotiable instruments, cash, and other assets and have them placed in safekeeping; and to take other measures concerning such entitlements and claims.

In situations where any delay may appear to entail risks, public prosecutors may also decide to have entitlements and claims frozen.

J. IMPLEMENTATION AND REGULATIONS

Implementation of the law is to be governed by regulations that are to be issued within six months of the date on which the law is published.

These regulations will cover the following matters:

1. Provision of information

2. Establishment of identity

3. Methods of investigation and examination

4. Suspicious transactions

5. Identification of benefits and assets that may be the subject of laundering.

Please do not hesitate to contact us if you need any additional information regarding the matters discussed here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Mustafa Camlica, Tax Manager on tel: +90 212 232 1210, fax: +90 212 230 8231, or e-mail mustafa.camlica@arthurandersen.com or enter a text search 'Arthur Andersen' and 'Business Monitor'.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions