FATF Puts Turkey Under Enhanced Follow-Up After AML Review

The Financial Action Task Force has placed Turkey under enhanced follow-up after its latest assessment found gaps in money laundering prosecutions, cross-border asset recovery, and the handling of high-risk financial crime.

FATF said Turkey has strengthened its use of financial intelligence and international cooperation since its 2019 evaluation. However, the assessment found that more than 7,000 money laundering cases were still awaiting prosecution, with difficulties in turning investigations into judicial outcomes.

The watchdog called on Turkey to prioritize money laundering investigations and prosecutions linked to high-risk predicate offenses, including drug trafficking, smuggling, and illegal betting. It also called for stronger terrorist financing prosecutions, convictions, and criminal asset recovery.

FATF identified professional money laundering, misuse of corporate structures, and inconsistent use of international cooperation to recover assets moved abroad as the country’s continuing weaknesses. It also said Turkey’s large cash-based and informal economy and its position as a regional trade and financial hub create significant money laundering risks.

On technical compliance, Turkey was rated compliant or largely compliant with 38 of FATF’s 40 recommendations, with the remaining two rated partially compliant. FATF assessed its effectiveness as substantial in three of 11 areas and moderate in the other eight.

Turkey now has three years to address FATF’s key recommended actions and report on its progress. Enhanced follow-up is a separate process from FATF’s increased monitoring, commonly known as the gray list, and does not mean Turkey has been placed back on that list.