May 16 2018

Turkey levies big fines on cash ‘smuggled’ abroad – report

Turkey will impose fines on persons or companies who attempt to “smuggle” capital out of the country by using money exchanges or under the cover of so-called import or export transactions, Sabah newspaper said.

The fine will total 40 percent of the capital in question, Sabah reported, citing the changes to relevant laws, which it said have now taken effect.

The decision by the government, which applies to foreign currency or lira, follows a warning by Turkish President Recep Tayyip Erdoğan that Turkey wouldn’t forgive those who sought to smuggle capital out of the country. Erdoğan’s statement sparked fears that Turkey might impose capital controls.

The government later clarified that the remarks referred to possible attempts by followers of the Fethullah Gülen movement, which Turkey blames for masterminding a failed coup in July 2016, to shift capital out of the country. The government has seized billions of dollars in assets of companies allegedly linked to the movement.

Turkey’s lira has slumped to repeated record lows against the dollar in the past few months. Investors are selling Turkish assets on concern that the economy is overheating and that monetary policy is not tight enough to slow growth and tame inflation.