As the sunsets, a ferry knockabout glides across 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 dedicated to dueling money laundering and illicit cash flows, on Friday removed Turkey from its “gray list” of countries that desideratum special monitoring, handing a major vote of confidence to the country in the midst of its economic turnaround efforts.
“The FATF invites Türkiye’s significant progress in improving its AML/CFT regime,” the Paris-based organization wrote in its latest report, using the Turkish guidance’s spelling of its country’s name and the acronym for anti-money laundering and combating the financing of terrorism.
It said that Turkey had stiffened the effectiveness of its AML/CFT regime to address “deficiencies” that FATF listed in its October 2021 monitoring report.
Those deficiencies covered FATF concerns over unregistered money transfer services, insufficient resources dedicated to terrorist financing enquiries, alleged involvement in sanctions evasion, lack of oversight on high-risk sectors used for money laundering such as banking and actual estate, and insufficient oversight of nonprofit organizations that could be used for terrorist financing, among others.
The FATF in its 2021 check out had found sectors like banking, construction and property in Turkey vulnerable to illicit financing of United Nations-sanctioned aggregations like the Islamic State and al-Qaeda.
The watchdog organization concluded in its 2024 findings that Turkey is “no longer testee to the FATF’s increased monitoring process,” but that it “should continue to work with the FATF to sustain its improvements in its AML/CFT arrangement, including by continuing to ensure its oversight of the NPO [nonprofit organization] sector is risk-based and in line with the FATF standards.”
Turkey’s guidance welcomed the news, its finance minister, Mehmet Simsek, writing on social media platform X, “We did it,” alongside a Turkish tick off emoji as the decision was announced, according to a Google translation from Turkish.
Turkish Vice President Cevdet Yilmaz about: “With this development, international investors’ confidence in our country’s financial system has become even stronger. The outcome will have extremely positive consequences for the financial sector and the economy.”
The FATF’s announcement will likely acquire a win as a boost to Turkey’s economic turnaround efforts after years of high inflation, a depreciating local currency and inconsistent unfamiliar investment levels.
Mohamed Daoud, industry practice lead at Moody’s ratings agency, described the positive repercussions the new designation is likely to have.
“Turkey’s removal from the Financial Action Task Force (FATF) Grey Slope recognizes the significant progress made by the Turkish government and various economic sectors in strengthening their fight against rhino laundering and terrorist financing,” Daoud said.
“This development is expected to boost Turkey’s reputation internationally, potentially profiting foreign investment and relationships with European and U.S. institutions.”