What Is Money Laundering?
It is included in the Turkish Penal Code as the crime of laundering the values of assets arising from crime. The crime of laundering the values of the assets arising from the crime, that is to say money laundering as it was formerly known, occurs when there is a preliminary crime. This crime occurs when this economic value is no longer illegal and gives a legal appearance. All serious crimes are considered a prime offense.
What Are The Stages of Money Laundering?
Money laundering consists of three stages. The first stage is the introduction of the proceeds from crime into the financial system. In this stage, called the placement stage, mostly banks are used. The second stage is the separation stage. At this stage, the aim is to remove the money from its illegal source, thus preventing the money from being traced and caught. The last stage is the integration stage. During the integration stage, money disconnected from its illegal source is brought into the country through legal proceedings. In this way, money is laundered.
What Are The Methods of Money Laundering?
Money laundering methods vary from country to country, depending on the variety of instruments used in financial systems. However, the most used laundering methods are as follows;
o Physical smuggling of funds out of the country,
o Operation of screen (on paper) or fictitious companies or workplaces where cash is used,
o Exchange Offices,
o Casinos and Casinos,
o Fake invoice
o Alternative remittance systems
o Internet banking and electronic money.
National Legislation for the Prevention of Money Laundering
1) Law No. 5549 on Prevention of Laundering Proceeds of Crime
There is no regulation regarding the penalty for money laundering in the law. The liable persons were specified and the sanctions to be applied in case these persons took part in the money laundering process or did not report this crime were shown. The liable parties are obliged to report these transactions to MASAK in the event that there is a suspicious matter that the assets subject to the transaction are obtained illegally.
2) Law No. 4208 on the Prevention of Money Laundering
Obligations, which are a set of measures to prevent money laundering, and those who are subject to these obligations have been introduced with this regulation. Later, the Law was abolished and Law No. 5549 was replaced.
3) Turkish Penal Code
The crime of laundering of property values arising from the crime, which is regulated in Article 282 of the Turkish Penal Code, has rearranged the crime shown in the Law No. 4208. The law stated that the person who takes the assets of a crime, whose lower limit requires a prison sentence of six months or more, abroad, or who subjected to various procedures in order to conceal their illegitimate source or to make the opinion that they were obtained through a legitimate way. would be punished with imprisonment from three to seven years and a judicial fine of up to twenty thousand days.
4) Regulation on Measures to Prevent Money Laundering and Terrorist Financing
While preparing this Regulation, developments in the field of informatics, diversification in financial instruments, fast, complex and unlimited dimension of financial activities were taken into consideration and it was aimed to meet the needs of Turkey and at the same time to harmonize the legislation with international standards.
The basic measures included in the regulation include the fact that obliged parties, especially financial institutions, know their customers with whom they have a business relationship, report suspicious transactions related to money laundering and terrorist financing to MASAK, maintain the relevant information and documents and records and submit them when requested by the authorized units.
International Legislation for the Prevention of Money Laundering
Financial Action Task Force
1) FATF Recommendations
FATF was established in 1989 by G-7 countries to prevent money laundering in the international arena. The Recommendation published by FATF includes the standards to be followed by the member countries in legal, financial and international cooperation in the fight against money laundering and terrorist financing. These recommendations are as follows;
All countries should criminalize money laundering and apply it to all serious crimes by interpreting the crime of money laundering broadly.
Financial institutions should be prohibited from keeping anonymous accounts or accounts with obviously false names. Measures to know the customer should be taken. These measures;
• Identifying the customer and confirming the identity information of this customer using documents, data or information from a reliable, independent source,
• Taking reasonable measures to identify the beneficial owner and to verify his identity by the financial institution to make sure that the beneficial owner is.
• Understanding the purpose and real nature of the business relationship and obtaining information about them as appropriate,
• Continuous attention to the transactions being carried out, the organization's customers and their business and risk profiles, including the sources of funds when necessary, as well as their business relationship, and a detailed examination of the transactions to be carried out during this business relationship.
Financial institutions should be required to keep all records relating to national and international transactions for at least five years in order to be able to respond quickly to information requests from competent authorities.
When a financial institution suspects that the funds are income from a criminal activity or are related to the financing of terrorism, it should be required by law to promptly report these suspicions to the financial intelligence unit.
European Union
1) Money Laundering Directive No. 4
It is highly vulnerable to large amounts of cash payments, money laundering and terrorist financing. In order to mitigate the risks posed by such cash payments and reduce the money laundering trade, commodity traders are covered by this Directive when paying in cash of EUR 10,000 or more.
The increasing use of electronic money products suggests that these coins replace bank accounts. Therefore, regulations have been made in the Directive. Member States should be allowed to exempt electronic money products from certain customer due diligence processes.
Measures such as identification and verification of the customer and the beneficial owner should be taken.
There should be risk-reducing conditions. Electronic money products should be exempted from being used exclusively for the purchase of goods or services, and the amount stored electronically should be low enough to prevent circumvention of Anti-Money Laundering and Anti-Terrorist Financing rules.
New technologies provide time-efficient and cost-effective solutions to businesses and customers and should therefore be taken into account when assessing risk. Competent authorities and incumbent bodies must be active in combating new and innovative ways of money laundering.
2) EU Directive No.2005/60 EC
All preventive measures listed in this Directive are such that they also cover the financing of terrorism.
It has been proven time and again that the use of large amounts of cash payments is very vulnerable to money laundering and terrorist financing. Therefore, in Member States that allow cash payments above the set threshold, all natural or legal persons trading goods for commercial purposes must be covered by this Directive when accepting such cash payments. Sellers and auctioneers of high-value goods such as precious stones, metals or works of art are covered by this Directive to the extent that payments made to them are EUR 15,000 or more in cash.
This Directive, in which the "Know your customer" regulation takes place for the first time, also covers the providers of trust and company service.
With this Directive, the EU's Directive No.91/308 / EC has been abolished.
3) Directive No.2001/97 EC
The scope of predicate offenses and liable groups has been extended by this Directive. All of the serious crimes are included in the preliminary crimes.
Apart from financial institutions and credit institutions, tax consultants, casinos, notaries, real estate buyers and lawyers are obliged to identify, keep records and report suspicious transactions.
Member States are required to establish the identity of their customers when entering into business relations with the persons and institutions included in this directive, in order to assist evidence, especially when opening accounts and providing safe deposit box services.
United Nations
1) UN Convention against Transnational Organized Crime
The purpose of this Convention is to improve cooperation to prevent and combat organized crime more effectively. The convention required States parties to determine the predecessor crimes in money laundering, including serious crimes, participation in an organized criminal group, corruption and obstruction of justice.
Banks and other financial institutions are obliged to identify their customers, keep records and report suspicious transactions.
It was emphasized that a national financial intelligence unit should be established to detect money laundering.
2) UN Convention against Trafficking in Narcotic Drugs and Psychotropic Substances (Vienna Convention)
There is no regulation under the title of money laundering in the contract. The acquisition, possession or use of assets, knowing that it results from drug crimes or participation in these crimes, is deemed a crime. It has been arranged that measures should be taken in this regard.
Confiscation is defined in the convention and it is stipulated that each state party must take the necessary measures in order to confiscate the gains obtained from drug crimes or their assets corresponding to these gains.
3) UN Political Declaration and Action Plan Against Money Laundering
It is an action plan that recommends special efforts against laundering money earned through drug trafficking. It argues that for this purpose, it is necessary to strengthen regional and subregional cooperation.
Council of Europe
1) Council of Europe Convention on the Financing of Terrorism and Laundering, Search, Seizure and Confiscation of Proceeds from Crime
It covers the financing of terrorism as well as money laundering. It has the same provisions as the Strasbourg Convention.
2) Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (Strasbourg Convention)
In order to prevent revenue from crime, the confiscation and laundering of the proceeds of crime and also to ensure international cooperation for this purpose, this Convention has been signed.
In the contract, a predicate offense definition has been made. Any criminal offense that may be the subject of one of the laundering offenses is considered a predicate offense. All crimes are regarded as precursor offenses. In accordance with the convention, the states parties shall take the necessary legal and other measures to confiscate the proceeds obtained from the crime or assets used in the crime or its equivalent.
Basel Committee
1) Basel Committee Declaration of Principles
Banks and other financial institutions may unwittingly accept money from criminal activity as deposits or play a role in the transfer of money from criminal activity. The purpose behind such transactions is to hide the beneficiary of these funds. The declaration was published to help prevent money laundering through the banking system. In order to ensure that the financial system is not used as a channel for criminal proceeds, banks should make reasonable efforts to identify the true identity of all customers involved in institutional services.
EGMONT Group
It is a group established by 24 countries in order to help countries to develop their national anti-money laundering systems and to remove the barriers to international information exchange. "Working groups" have been established in order to take concrete steps to achieve the targets. Egmont Group continues its activities with five working groups. These groups are legislation working group, education working group, outreach working group, operational working group and information technology working group.
Egmont Group has defined the financial intelligence unit in its studies. The purpose of the financial intelligence unit is to collect financial information on money laundering and terrorist financing, and forward it to the relevant units.
The Egmont Group has worked to make the exchange of information between financial intelligence units more comprehensive and systematic. One of its most important works is a computer network system, called the "Egmont Secure Web-ESW", that enables direct and rapid communication, including information exchange between financial intelligence units; the other is the "Memorandum of Understanding-MOU", which aims to systematically exchange information