FATF to Cite Turkey for ‘Serious Shortcomings’ in AML Regime: Report
17 Dec 2019

The Financial Action Task Force (FATF) on Monday will warn Turkey that it must address “serious shortcomings” in its efforts to prevent money laundering and terrorist financing, or face potential inclusion on the intergovernmental group’s “grey list,” the Financial Times reported.

As part of its findings, the Paris-based watchdog organization will add Ankara to its International Co-operation Review Group (ICRG), thereby subjecting the nation to “special monitoring” over the course of the next 12 months, the news outlet said. The designation and the consequent scrutiny that it brings could have an adverse effect on investor confidence in Turkey, Elizabeth Rosenberg, a senior fellow at the Center for a New American Security, told the newspaper.

Turkey’s missteps stem in part from its response to a 2016 coup attempt, which had a “fundamental impact” on the government’s priorities, FATF concluded. The task force believes that Turkish authorities have been “heavily focused” on using financial-crime laws against the alleged perpetrators of the failed coup, resulting in an “exponential rise” in the government’s workload at the expense of the nation’s broader efforts to shield itself from illicit funds, the FT said.

Turkish prosecutors have generally viewed charges related to money laundering and terrorism financing as low priorities, and have at times missed chances to “discover financiers and go deeper to understand the broader network” of terrorist groups, according to FATF, which also criticized Turkey’s efforts to enforce United Nations sanctions against Iran, North Korea and the Taliban.

FATF separately deemed Turkey in need “major” or “fundamental” improvements in nine of the group’s 11 effectiveness measures, the newspaper said.

Displeased with FATF’s findings, Turkish officials have recently lobbied other member-states to block the report prior to its publication, according to the Financial Times, which also noted that Turkey’s treasury and finance ministry did not respond to a request for comment.

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