Turkey Removed from FATF Gray List, Boosting Confidence in Economic Turnaround Efforts

After significant efforts to combat money laundering and illicit cash flows, Turkey has received a major vote of confidence as it has been removed from the "gray list" of countries that require special monitoring by the Financial Action Task Force (FATF).

The FATF, an international watchdog organization based in Paris, acknowledged Turkey's significant progress in enhancing its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. In its latest report, the FATF recognized the steps taken by Turkey to address the deficiencies highlighted in the October 2021 monitoring report, leading to the strengthening of the effectiveness of its AML/CFT regime.

Deficiencies Addressed

The deficiencies that were of concern included unregistered money transfer services, insufficient resources for terrorist financing investigations, alleged involvement in sanctions evasion, lack of oversight on high-risk sectors such as banking and real estate, and inadequate monitoring of nonprofit organizations that could potentially be used for terrorist financing.

Following the announcement, the Turkish government expressed its appreciation for the decision. Finance Minister Mehmet Simsek shared his reaction on a social media platform, emphasizing the significance of this achievement. Vice President Cevdet Yilmaz highlighted the positive impact this development will have on international investors' confidence in Turkey's financial system and its economy.

Impact on the Economy

This recognition by the FATF is expected to have a positive effect on Turkey's economic turnaround efforts. Moody's ratings agency predicts an improvement in Turkey's reputation internationally, potentially leading to increased foreign investment and enhanced relationships with European and U.S. institutions. The removal from the FATF "Gray List" is anticipated to strengthen the financial sector and contribute to the country's economic growth.