Global finance watchdog adds Turkey to its grey list

ERBIL, Kurdistan Region -- A global finance watchdog said late Thursday that it has added Turkey to its grey list for the country’s failings in approaches used to combat money laundering and terrorist financing. 

Financial Action Task Force (FATF) President Marcus Pleyer said during an online press conference that they have removed Mauritius and Botswana from their grey list while adding Turkey, Jordan and Mali to it. 

“Turkey had a mutual evaluation, country assessment in late 2019. The report outlined a large number of serious issues regarding Turkey’s efforts to prevent and combat money laundering and terrorist financing. Since then, the FATF recognizes Turkey has made some progress across all areas of concern,” he said. 

“However, serious issues remain. This includes issues concerning supervision, in particular high-risk sectors such as banks, golden precious stones dealers and real estate agencies,” added Pleyer. 

Grey list could further hit Turkey’s economy and lack of foreign investment. Turkish lira has lost about 20 percent of its value against the dollar this year, reaching an all-time low record. One dollar was worth nearly 9.5 liras on Thursday.

Turkish President Recep Tayyip Erdogan threatened Thursday to expel 10 Western ambassadors for calling for the release of philanthropist Osman Kavala.  

According to an IMF study, FATF’s grey list has had a “large, significant negative effect” on the economy of countries found in the list. 

“The FATF is aware of human rights groups’ concerns about Turkey’s treatment of non-profit organizations (NPOs). Turkey needs to implement a true, risk-based approach to NPOs and ensure authorities don’t disrupt or discourage legitimate activity,” said the FATF president. “Turkey needs to show its effectively tackling complex money laundering cases, and show its pursuing terrorist financing prosecutions in line with its risks and prioritising of UN-designated terrorist organizations such as ISIL and al-Qaeda.”

The Islamic State (ISIS), or ISIL, controlled swathes of land in Syria and Iraq in 2014 but was territorially defeated in both countries by 2019. The US Department of the Treasury has recently targeted “ISIS financial facilitators in Syria and Turkey.”   

Pleyer said Turkey has promised to make the changes suggested by FATF. 

When the FATF adds a country to the grey list, “it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring,” according to the watchdog.