THE LEGAL ASPECTS OF MONEY LAUNDERING AND TERRORIST FINANCING

1. What is Money Laundering?

Money launderingrefers to all transactions aimed at concealing the source of illicit gains from crime or giving them a legal appearance. This process typically occurs in three stages:

Placement: The process of introducing criminal proceeds into the financial system.
Decoupling: Transferring money between different accounts or transactions to conceal its source.
Integration: The use of laundered money within the legal economy.

For example, laundering proceeds from drug trafficking through shell companies or fake invoices is a typical example of this crime.

2. What is terrorist financing?

Financing terrorismrefers to the provision, collection, or transfer of financial resources for the purpose of carrying out terrorist acts or the activities of terrorist organizations. It doesn't matter whether the funds used for terrorist financing come from legal or illegal sources; what matters is the purpose for which these funds are used in terrorist activities.

Therefore, Law No. 5549 on the Prevention of Money Laundering and Law No. 6415 on the Prevention of Financing Terrorismcontain specific provisions against such activities.

3. The Crime of Money Laundering in Turkish Law

Article 282 of the Turkish Penal Code defines the crime of money laundering as follows:

"A person who commits a crime punishable by a minimum sentence of six months or more of imprisonment, with the aim of concealing the illicit source of the assets or presenting them as legitimately obtained, shall be punished with imprisonment from three to seven years and a judicial fine of up to twenty thousand days."

Elements of the crime of money laundering:

Preliminary offense: The act that is the source of the money laundering must be a crime punishable by imprisonment under the Turkish Penal Code.
Property value: Assets obtained through crime that have economic value, such as money, movable and immovable property, rights, and receivables.
The act of money laundering must aim to conceal, transfer, transform, or give a legal appearance to the source.

4. The Crime and Punishment of Financing Terrorism

Article 3 of Law No. 6415defines the financing of terrorism as a crime and prescribes a prison sentence of 5 to 10 years.

For this crime to occur:

providing, raising or transferring funds ,
The aim is to support terrorist acts,
intent on the part of the perpetrator are required.

For example, transferring donations collected through an association to a terrorist organization falls within the scope of this crime.

5. MASAK and Financial Audit Mechanisms

MASAK (Financial Crimes Investigation Board)is a key institution in the fight against money laundering and terrorist financing. MASAK's duties include:

Receiving and reviewing suspicious transaction reports,
To oversee the compliance programs of financial institutions (banks, payment companies, etc.),
To cooperate internationally,
Ensuring the enforcement of asset freezing orders
is among the responsibilities.

Failure to report to MASAK or providing misleading information will result in administrative fines and criminal penalties.

6. Money Laundering in Light of Supreme Court Decisions

The Supreme Court emphasizes that for the crime of money laundering to occur, a prior conviction must have been finalized . For example, in a 2022 decision by the 7th Criminal Chamber of the Supreme Court , the practice of showing proceeds from drug trafficking through shell companies was considered money laundering under Article 282 of the Turkish Penal Code, and the perpetrator was sentenced to 5 years imprisonment.

7. International Regulations and FATF Standards

Because money laundering and terrorist financing crimes have an international dimension, the FATF (Financial Action Task Force) have established international standards. As a member of the FATF, Turkey the "40 Recommendations" . Furthermore:

UN Security Council Resolutions,
OECD Financial Action Task Force reports,
EU Directivesare
guiding regulations in the fight against money laundering and terrorist financing.

8. Banking Regulations and Know Your Customer (KYC) Rules

Banks and financial institutions are required to implement KYC (Know Your Customer) policies to prevent money laundering . This includes:

Identity verification,
Suspicious transaction reports,
Risk analysis,
continuous customer monitoring
are taken.

Banks face significant fines under the Banking Law and Law No. 5549 if they fail to make the necessary notifications

9. Blocking Assets and Freezing in Terror Financing Cases

Law No. 6415 provides an administrative mechanism for freezing the assets of individuals and entities linked to terrorist organizations . Within this framework, the Ministry of Treasury and Finance and the Ministry of Interior can make joint decisions. Assets in Turkey belonging to individuals and entities on international terrorist organization lists can also be seized.

10. Current Problems and Proposed Solutions

Cryptocurrencies and Money Laundering: The anonymous nature of digital assets creates new risks in money laundering and terrorist financing. Therefore, the responsibilities of cryptocurrency exchanges under the Financial Crimes Investigation Board (MASAK) have been increased.
Shell Companies: Companies established especially in offshore regions are frequently used in money laundering of criminal proceeds.
Insufficient International Cooperation: Since money laundering is often concealed through chain transactions across different countries, effective international coordination is essential.

Conclusion

Money laundering and terrorist financing crimes are acts that threaten not only the economy but also national security. The Turkish Penal Code, Law No. 5549, Law No. 6415, and MASAK regulations prescribe serious penalties against these actions. The increasing digitalization and use of cryptocurrencies in the global financial system, in particular, highlights the need for stricter oversight, stronger intelligence sharing, and international cooperation in combating these crimes

Law No. 6415, FATF standards, financial crimes, money laundering, cryptocurrencies and money laundering, MASAK (Financial Crimes Investigation Board) responsibilities, proceeds of crime, Turkish Penal Code Article 282, financing of terrorism, financing of terrorism.

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