Compliance

Scope

The term uyum, which is used as the equivalent of “compliance” in English, has no general definition in Turkish legislation; its meaning is determined according to the regulation in which the term appears. The field that uses the term in the most detail is the prevention of the laundering of proceeds of crime and of the financing of terrorism. Article 5 of Law No. 5549 authorizes the Ministry to determine measures, including the obligation of obliged entities to establish training, internal audit, control and risk management systems and to appoint an authorized officer to ensure compliance with statutory obligations. The Regulation on the Compliance Program issued on this basis defines the compliance program as the set of measures established for this purpose, and the compliance officer as the officer employed to ensure compliance with the obligations and equipped with the necessary authority (Art. 3). The program includes institutional policy and procedures, risk management, monitoring and control, the compliance officer and unit, training and internal audit activities (Art. 5).

Practical significance

The obligation to establish a compliance program applies to the institutions listed in the regulation; among them are banks other than the exceptions listed in the regulation (such as the Central Bank and Takasbank), brokerage firms, insurance and pension companies, electronic money institutions, payment institutions other than the exceptions, and crypto-asset service providers (Art. 4). Risk management and monitoring and control activities are carried out by the compliance officer under the supervision and responsibility of the board of directors (Art. 5). Obligations such as customer identification and suspicious transaction reporting, however, apply to the broader group of obliged entities defined in Law No. 5549 (Art. 2–4). For companies outside this scope there is no general statutory obligation to establish a compliance program; however, in a joint-stock company, the senior supervision of whether the persons entrusted with management act in accordance with the laws, the articles of association and the internal directives is among the non-delegable duties of the board of directors (Turkish Commercial Code (TTK) Art. 375).

Commonly confused concepts

Compliance is confused with internal audit: the compliance function continuously monitors and guides whether activities conform to legislation and internal rules, whereas internal audit independently evaluates the functioning of these systems. “Concerted practice” in competition law, on the other hand, is a separate concept: it refers to undertakings coordinating their conduct and is prohibited if it has the object or effect of restricting competition (Law No. 4054, Art. 4).