Turkish Parliament to Grant Financial Crimes Unit Power to Instantly Freeze Accounts

Expanded Powers for MASAK

The Turkish Parliament is preparing to grant the Financial Crimes Investigation Board (MASAK) significant new powers, allowing the unit to instantly freeze bank accounts and cryptocurrency accounts suspected of involvement in illicit financial activities. This legislative initiative, outlined in a 20-article bill, is designed to enhance Turkey's fight against money laundering, illegal gambling, cyber-fraud, and other financial crimes.

Under the proposed legislation, MASAK will be able to monitor and intervene in financial operations in real time. Beyond freezing accounts, the new authority will include the ability to impose transaction limits, block mobile banking services linked to criminal activity, and blacklist cryptocurrency addresses associated with illegal use.

Alignment with International Standards

Officials state that the measure follows recommendations from the Financial Action Task Force (FATF), the global watchdog on money laundering and terrorist financing. Turkey, a member of FATF, aims to align its financial crime framework with international guidelines, a step that contributed to its removal from the FATF's 'grey list' in June 2024. The reforms are presented as an effort to enhance financial transparency and strengthen the country's credibility in the international arena.

MASAK, which operates under the Ministry of Treasury and Finance, was established in 1997 and is Turkey's central financial intelligence unit. Its primary duties include preventing money laundering, conducting research, developing measures, and processing information for relevant authorities.

Targeting 'Rented Accounts' and Broader Oversight

A particular focus of the new bill is the crackdown on 'rented accounts,' a scheme where criminals pay individuals to use their bank or crypto accounts for illegal activities such as fraud or betting. The legislation seeks to curb these practices by enabling MASAK to act directly without requiring prior court orders in cases of suspected financial crimes.

The bill, part of Turkey's 11th Judicial Reform Package, is expected to be introduced in parliament during the new legislative session, which commenced on October 1. If approved, the law would expand MASAK's oversight to include banks, payment systems, e-money firms, and cryptocurrency exchanges. Account holders would retain appeal mechanisms to challenge freezing decisions through administrative and judicial processes.

Concerns and Context

While authorities emphasize the need for stronger oversight, critics have raised concerns regarding the timing of the move, suggesting it reinforces worries about the government's increasing control over private enterprise. Recent high-profile corporate seizures based on MASAK findings have also alarmed the business community.