Turkey Bolsters Masak's Powers to Combat Financial Crime and Money Laundering

Turkey is poised to significantly expand the authority of its financial crime watchdog, the Financial Crimes Investigation Board (Masak), as part of a comprehensive initiative to tackle money laundering and other illicit financial activities. The proposed changes would empower Masak to freeze and restrict access to bank and cryptocurrency accounts, align its operations with international anti-money laundering (AML) standards, and enhance its investigative reach.

This legislative upgrade reflects Turkey's commitment to adhering to the Financial Action Task Force (FATF) standards. The measures are set to be introduced to Turkey's parliament, playing a pivotal role in shaping the country’s financial security framework.

Turkey’s FATF Transformation

For years, Turkey struggled to address deficiencies in AML and counter-terrorist financing, which led to its placement on FATF’s "gray list" of jurisdictions under enhanced monitoring. However, in June 2024, Turkey was removed from the list after implementing significant reforms to strengthen its AML regulations and enforcement.

The proposed enhancements to Masak’s powers further solidify Turkey’s commitment to combating financial crime, a move likely to bolster its global reputation as a jurisdiction actively working to meet FATF and international compliance standards.

Enhanced Authority for Masak

Under the proposed legal changes, Masak would be granted sweeping new powers to decisively tackle suspicious financial activity across multiple platforms. These powers include:

• Freezing accounts suspected of involvement in illegal activities across banks, payment companies, electronic money platforms, and cryptocurrency exchanges.
• Imposing transaction limits to restrict the flow of suspicious funds.
• Suspending mobile banking accounts associated with fraudulent operations.
• Blacklisting cryptocurrency wallet addresses linked to criminal enterprises.

An especially critical focus is on “rental” accounts—personal or business accounts that are leased to criminals for a fee, enabling activities such as fraud, illegal betting, and illicit financial transactions. Suppressing these accounts represents a key priority within the new framework.

Part of the 11th Judicial Reform Package

The proposed legislative measures to strengthen Masak’s authority are expected to be included in Turkey’s 11th judicial reform package, anticipated during the upcoming parliamentary session. While the reform package aims to address various legal challenges across several domains, its focus on financial crime reflects Turkey’s urgency in tackling both domestic and cross-border illicit financial activities.

As part of parliamentary proceedings, amendments to the draft law could be introduced. Such adjustments may refine plans to ensure the legislation is effective while balancing interests within Turkey’s regulatory and financial sectors.

Masak’s Expanding Role in AML Enforcement

Masak plays an instrumental role in Turkey’s AML efforts. As the country’s central investigative authority for financial crimes, its responsibilities include analyzing reports of suspicious transactions, referring cases to prosecutors for legal action, and liaising with international organizations to promote compliance with global standards.

With the upcoming expansion of its powers, Masak is positioned to assume an even greater role in Turkey’s broader strategy to enhance financial security and transparency. The extra powers will allow it to act swiftly in neutralizing threats, ensuring individuals, businesses, and institutions adhere to increasingly robust anti-crime regulations.

Implications for Financial Ecosystems

The tightening of financial crime regulations is set to bring heightened scrutiny to Turkey’s financial and cryptocurrency ecosystems. Banks, payment companies, and industry participants will need to prepare for advanced compliance requirements and more rigorous audits. Cryptocurrency platforms, which were already under watch, are expected to implement enhanced monitoring protocols to identify and report suspicious activities to avoid blacklisting or penalties.

As Turkey moves to fortify its AML framework, collaborations between Masak, financial institutions, and international compliance entities will likely intensify. This will ensure that Turkey’s regulatory environment aligns with global best practices, preventing loopholes that could be exploited by criminal organizations.

Conclusion

Turkey’s efforts to empower Masak signal a decisive shift in its approach to combating financial crime and money laundering. By integrating stricter oversight on bank accounts, virtual payment systems, and cryptocurrency platforms, the government is demonstrating its commitment to securing its financial ecosystem. As the legislative process unfolds, these reforms will serve as a cornerstone for Turkey’s path to becoming a global benchmark for AML compliance and enforcement. Institutions operating within Turkey must proactively adapt to the evolving regulatory landscape to align with these increasingly stringent standards.