Istanbul– Yesterday, Friday, the General Group of the Financial Action Task Force (FATF) removed Turkey from the gray list of countries subject to special scrutiny regarding money laundering and terrorist financing crimes, after meeting 40 criteria specified by the group.
The international organization charged with coordinating and evaluating policies to combat money laundering and the financing of terrorism reported, during a statement issued after the conclusion of the General Assembly meeting of the Financial Action Task Force in Singapore, that Turkey has achieved remarkable progress in strengthening its system to combat money laundering and terrorist financing.
The statement praised Ankara’s efforts to improve response to mutual assessments and activate strategic measures to combat these dangerous phenomena, noting that Turkey will no longer be subject to the increased monitoring process carried out by the Financial Action Task Force.
In October 2021, the FATF included Turkey on the “gray list” due to what it called shortcomings in combating money laundering and terrorist financing. The latest step came after a team from the group held meetings with Turkish authorities to assess progress made in addressing those concerns.
What is Türkiye’s official position on its removal from the gray list?
The Turkish government welcomed the decision to remove it from the list of countries whose financial systems are in question. The following are the most prominent reactions:
- Turkish Vice President Cevdet Yilmaz noted that “this development will strengthen international investors’ confidence in the Turkish economy and the country’s position on the international stage.”
- The Treasury and Finance Ministry said in a statement that this result will facilitate the achievement of the economic program goals by increasing confidence in the Turkish financial system. It stressed that Turkey will continue its fight against money laundering and terrorist financing, while fully adhering to international standards.
- Trade Minister Omer Bulut said that “removing Turkey from the gray list is one of the indicators of the success of the policies we have implemented.”
- In this context, Mohamed Dawoud, head of industry practices at Moody’s, the credit rating agency, expressed his expectation that removing Turkey from the anti-money laundering gray list will have a positive impact on its global reputation, and will enhance foreign investments and relations with international institutions such as European and American.
Why was Türkiye on the list?
The FATF Group works to monitor and address deficiencies in countries’ systems related to combating money laundering, the financing of terrorism, and the financing of arms proliferation. The procedure for placing a country on the “grey list” depends on whether it has deficiencies in combating these issues.
In announcing Turkey’s listing, then-FATF Chairman Marcus Pleyer noted the need for Turkey to put in place regulations in high-risk sectors such as banking, gold and precious stones, and real estate.
“Turkey must monitor money laundering and financial transactions linked to terrorist groups as designated by the United Nations, such as Al-Qaeda and the Islamic State,” Bleier said. “Turkey must show that it is taking serious steps to prevent money laundering and combat terrorism and criminal networks.”
For his part, economic researcher Bilal Baghaish told Al Jazeera Net that Turkey has successfully completed all the necessary steps to exit the Financial Action Task Force’s “gray list,” explaining that the Ministries of Treasury, Finance, Justice, and Interior have worked intensively since the start of the mutual evaluation process to achieve this goal.
He added, “All the points included in the FATF’s 40 recommendations were implemented one by one. These reforms included amendments to many important legislation such as the Turkish Penal Code, the Anti-Terrorism Law, the Criminal Procedure Code, the Turkish Commercial Code, in addition to the Law to Prevent the Laundering of Proceeds of Crime.” And the Terrorist Financing Prevention Law.
How did Türkiye get off the list?
Baghaish pointed out that the announcement issued by the FATF in October 2021 referred to 7 points related to Turkey. But after the general meeting in June 2023, this number dropped to just two points.
He added, “Special investigation offices were established after identifying the courts and prosecution offices specialized in combating money laundering and terrorist financing. The Financial Crimes Investigation Unit was also restructured, the risk analysis for legal persons was completed, and the National Strategy Document was activated to enhance the effectiveness of combating money laundering and terrorist financing.”
Bagish noted that the Turkish parliament had approved the regulation of crypto assets prior to the meeting in Singapore, granting the Capital Markets Board multiple powers over these assets. “With this, Turkey has met all the FATF recommendations, putting it in a strong position to finally exit the grey list and restore the international community’s confidence in its financial system,” he added.
What are the most important results expected after the decision?
The move is likely to boost Turkey’s efforts to attract foreign capital to its $1.1 trillion economy, a Bloomberg report said.
For his part, economic researcher Muhammad Abu Alyan explained to Al Jazeera Net that the decision has multiple positive effects on the financial system and the Turkish economy in general. He explained that Turkey’s exit from this list will enhance confidence in its financial system, which will reflect positively on many different sectors.
He added that this decision will help Turkish banks strengthen their international financial relations and raise their credit ratings, enabling them to obtain financing at a lower cost and bring in greater resources from international markets. He also pointed out that the positive effects of the decision will include various fields such as energy, construction, infrastructure, tourism, industry, and real estate.
He stressed that enhancing confidence in the Turkish financial system will contribute to achieving the goals of the economic program, noting that the decision will help accelerate the entry of international resources into the country and improve borrowing costs.
Regarding the impact of the decision on citizens, the economic researcher believes that it will be indirect during the period of economic improvement that Turkey may witness.
