MASAK Proposes Tiered Reporting System for High-Value Financial Transactions

Introduction

The Financial Crimes Investigation Board (MASAK) has taken a significant step in the fight against money laundering and the financing of terrorism. A newly published draft communiqué proposes the introduction of a gradual declaration system for financial transactions.
This regulation is expected to impose important obligations on both financial institutions and individuals or legal entities engaging in high-value transactions.

Content of the Draft

According to the MASAK draft communiqué:

1. Gradual Declaration System

• A tiered reporting obligation will apply to financial transactions above certain thresholds.
• As the transaction amount increases, the scope of information and documentation required for declaration will expand.

2. Transactions Covered by the Declaration

• Bank transfers (domestic and international)
• Cash deposits and withdrawals
• Precious metals and gemstones trading
• Cryptocurrency transactions

3. Threshold Amounts

• The draft sets different thresholds for different types of transactions.
• For example, transfers above ₺250,000 would require identification and disclosure of the transaction’s purpose; for transactions exceeding ₺1,000,000, additional documentation such as contracts or invoices would be mandatory.

Purpose and Expected Impact

• Purpose: To enhance transparency in the financial system and detect illicit funds or money laundering activities more effectively.
• Expected Impact: Banks and financial institutions will be able to report suspicious high-value transactions more quickly, enabling MASAK to perform detailed monitoring based on transaction volume.

Legal Assessment

• Under Law No. 5549 on the Prevention of Laundering Proceeds of Crime and the MASAK Compliance Guide, both institutions and individuals who fail to fulfill their reporting obligations may face substantial administrative fines.
• This new regulation will directly impact Know Your Customer (KYC) procedures and Suspicious Transaction Reporting (STR) requirements.
• Companies engaged in high-volume financial activities will need to review and, if necessary, revise their internal compliance policies.

Recommendations for Businesses and Individuals

1. Keep your documents: Always have supporting documentation (invoices, contracts, receipts, etc.) ready for high-value transfers.
2. Plan your transactions: Be aware that splitting large transactions into smaller amounts to avoid declaration may be considered structuring and carry legal risks.
3. Seek professional advice: For international transfers, ensure compliance with both MASAK regulations and foreign jurisdiction requirements.

Conclusion

MASAK’s new draft communiqué marks the beginning of a stricter monitoring and transparency era in Turkey’s financial system. The gradual declaration system will not only strengthen the fight against financial crimes but also impose new compliance obligations on financial institutions.
Once enacted, both companies and individuals will need to adopt a more structured and well-documented approach in conducting their financial transactions to avoid legal liabilities.