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Measures to prevent money-laundering

The Council of Ministers issued a Regulation, effective from August 31 1996, aimed at the detection of money-laundering activities. Turkish banks and branches in Turkey of foreign banks are obliged to determine the identities of persons engaged in any transaction exceeding TL1 million (US$11,000). The amount will be reviewed every year in January by the Undersecretariat of Treasury in light of changes in the Wholesale Price Index.

Transactions particularly referred to in the Regulation are sales and purchases, transfers, safe-keeping, deposits and withdrawals, the issuing of cheques and promissory notes and the hiring of safety-deposit boxes. Banks are required to keep all relevant documents pertaining to identification of customers. Branches of Turkish Banks abroad are also subject to the Regulation provided that the legislation of the country where they operate does not prevent such branches complying with the Regulation. Transactions involving financial institutions and government agencies are exempt from the identification requirements.

Identification for real persons will be by examination of the identity card or driving licence or passport of the person involved. Notarized copies are acceptable. Once identity is established, reference to the first transaction will suffice for subsequent transactions. In the case of corporate persons, a certified copy of the record of the relevant registry of commerce, together with a notarized copy of a specimen signature of persons authorized to represent the corporation, is required.

A more comprehensive draft of the legislation is on the agenda of the Parliament.

Other recent developments

Other recent legislation passed in Turkey includes the following:

  • The Turkish Parliament has approved the treaties signed with Poland, Algeria, Malaysia, Egypt, Bulgaria, Mongolia, China and India on prevention of double taxation. The government also signed a protocol with Georgia on cooperation in the field of energy.
  • Parliament has passed a law authorizing the minister of State in charge of the Undersecretariat of Treasury to issue guarantees on payment obligations towards local and foreign corporations arising from loan agreements or contracts of sale of goods and services connected with the investment projects envisaged on the Build-Operate-Transfer model.
  • The Council of Ministers has approved the establishment of Saudi American Bank TAS in Istanbul with a capital of TL2 billion.
  • The Council of Ministers has approved and brought into force the Articles of Agreement establishing the Black Sea Trade and Development Bank. Parliament had previously empowered the Council of Ministers to do so.
  • The Council of Ministers also approved the formation by Ziraat Bankasi (Agricultural Bank), wholly owned by the government, a bank in Bosnia-Herzegovina with a share capital of Dm10 million (US$665 million).

Dr Hasan Nerad

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