Turkey could be added to “grey list” for money laundering and terrorism financing

Turkey has been warned by the Financial Action Task Force (FATF) that it must address its shortcomings in tackling money laundering and terrorism financing or face being added to an international “grey list” of countries with inadequate financial controls.

The international watchdog’s warning came after its 2019 Turkey Mutual Evaluation Report report issued on Monday, determined the country’s lack of a series of standards, that could severely harm Turkey’s ability to attract foreign financing.

FATF assessed Turkey’s anti-money laundering and counter terrorist financing system, finding that the country needs to improve fundamentally in nine out of the eleven areas evaluated.

Those include the need to improve measures for freezing assets linked to terrorism and to increase the current low rate of conviction for terrorism financing – despite progress made in courts, and proliferating weapons of mass destruction.

The country was also found to delay in implementing UN Security Council resolutions related to sanctions designations against Iran, North Korea and the Taliban.

While in recent years Turkey has strengthened its laws and regulations, it still needs to improve implementation in various areas, to boost effectiveness. According to the report, Turkish authorities need to make better use of financial intelligence increase the number of money laundering investigations and to develop a national strategy for investigating and prosecuting different types of money laundering.

“Turkey has understood the risks it faces from money laundering and terrorist financing and has established a legal framework that can form the basis for achieving effective outcomes, but it needs to swiftly address the gaps identified in this report”, highlighted the report.

Based on the report’s finding, the key threats leading to the crimes of money laundering (ML) and terrorism financing (TF) in Turkey, are illegal drug trafficking, migrant and fuel smuggling, human trafficking and terrorist attacks.

Turkey was removed from FATF’s list in 2014 after a four-year monitoring period. Ankara will be put again under special monitoring for one year and if it fails to comply with FATF’s recommendations, it will be re-added to the “grey list”, along with countries such as Pakistan, Mongolia and Yemen.