Finance watchdog visited Turkey ahead of ‘grey list’ decision: report

Photo: FATF

A team from the Financial Action Task Force (FATF), an international watchdog that placed Turkey on its “grey list” in 2021, recently held meetings with Turkish authorities ahead of its upcoming report on the country, Reuters reported.

The unpublicized, on-site visit aimed to assess Turkey’s progress in curbing the money laundering and terrorist financing concerns that led to its 2021 downgrade, according to a source familiar with the multi-day discussions.

The report will form the basis of the FATF’s decision at the June 28 plenary session, which Turkish Finance Minister Mehmet Şimşek has indicated could lead to Turkey’s removal from the grey list of countries under special scrutiny.

In its last statement on Turkey in February, the FATF said the country “has substantially completed its action plan,” warranting an on-site evaluation.

Turkey was placed on the FATF grey list in October 2021 for failing to supervise sectors vulnerable to money laundering and terrorist financing, such as banking and real estate. FATF flagged concerns that the country did not sufficiently prevent financing for groups like the Islamic State in Iraq and the Levant (ISIL) and al-Qaeda, which are on the United Nations sanctions list.

FATF was founded in 1989 to combat money laundering, terror financing and other similar threats to the integrity of the international financial system.

Twenty other countries are currently on the FATF grey list. Research by the International Monetary Fund shows that such a downgrade can strain ties to foreign investors and banks that monitor FATF ratings. An upgrade in June could provide a significant boost to Turkey’s lira and other assets.

Şimşek, who has championed a return to more orthodox economic policies in the past year, said in late February, “We have successfully completed our technical studies to remove our country from the grey list.”

“The process of leaving the grey list will be completed with the on-site inspection to be held in June,” he added on social media platform X.

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