As the sunset sets, a ferry glides over the waters of the Golden Horn with the Suleymaniye Mosque and the city of Istanbul, Turkey in the background.
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The Financial Action Task Force, an international watchdog organization committed to combating money laundering and illicit financial flows, on Friday removed Turkey from its 'grey list' of countries requiring special supervision. his efforts for an economic turnaround.
“The FATF welcomes Türkiye’s significant progress in improving its AML/CFT regime,” the Paris-based organization wrote in its latest report, using the Turkish government’s spelling of the country’s name and its acronym for anti-money laundering and combating the financing of terrorism.
According to the report, Turkey had strengthened the effectiveness of its AML/CFT regime to address the “deficiencies” identified by the FATF in its October 2021 monitoring report.
These shortcomings included FATF concerns over unregistered money transfer services, insufficient resources for terrorist financing investigations, alleged involvement in sanctions evasion, lack of supervision of high-risk sectors used for money laundering , such as banking and real estate, and insufficient supervision of non-profit organizations. which can be used, among other things, for the financing of terrorism.
In its 2021 report, the FATF had found sectors such as banking, construction and real estate in Turkey vulnerable to illicit financing from United Nations-sanctioned groups such as Islamic State and Al-Qaeda.
The watchdog organization concluded in its 2024 findings that Turkey “is no longer subject to the FATF’s enhanced monitoring process,” but that it “should continue to work with the FATF to pursue improvements to its AML/CFT system, including by continuing to ensure its oversight of the NPO [nonprofit organization] sector is risk-based and in line with FATF standards.”
The Turkish government welcomed the news. Finance Minister Mehmet Simsek wrote on the social media platform X: “We did it,” using an emoji of the Turkish flag as he announced the decision, according to a Google translation from Turkish.
Turkish Vice President Cevdet Yilmaz said: “With this development, the confidence of international investors in our country's financial system has become even stronger. The decision will have extremely positive consequences for the financial sector and the economy.”
The FATF announcement is likely to provide a boost to Turkey's economic reforms after years of high inflation, a falling local currency and variable levels of foreign investment.
Mohamed Daoud, head of the sector practice at credit rating agency Moody's, described the positive impact the new designation is likely to have.
“The removal of Turkey from the Gray List of the Financial Action Task Force (FATF) recognizes the significant progress that the Turkish government and various economic sectors have made in strengthening their fight against money laundering and terrorist financing,” Daoud said.
“This development is expected to boost Turkey's international reputation, potentially boosting foreign investment and relations with European and American institutions.”
