EU Anti-Money Laundering Directives Target Turkey in Fight Against Dirty Cash
The European Union has identified several countries, including Turkey, as high-risk jurisdictions for money laundering and terrorist financing, prompting increased checks and controls on financial transactions involving these nations.
High-Risk Countries Listed by the EU
According to a new delegated regulation adopted by the EU Commission on December 12, 2023, Turkey is among the list of countries with strategic deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CFT) regimes. The regulation amends an earlier measure from 2016 and updates the list of high-risk third countries.
International Efforts to Combat Money Laundering and Terrorist Financing
The EU’s efforts to combat money laundering and terrorist financing are part of a broader international effort, said officials. The Financial Action Task Force (FATF), a global standard-setter on AML/CFT, identifies jurisdictions with strategic deficiencies in their regimes. The EU takes into account the FATF recommendations when listing high-risk countries.
Objectives of the EU’s Anti-Money Laundering Directives
The Commission’s list of high-risk third countries aims to:
- Protect the integrity of the EU’s financial system and internal market
- Reinforce internal security
- Promote sustainable development
Methodology for Identifying High-Risk Countries
The methodology for identifying high-risk countries was developed in 2020 and is based on the faults in national AML/CFT regimes that pose significant threats to the EU’s financial system. Countries are considered relevant if they meet certain criteria, such as:
- Being identified by the European External Action Service or Europol as having a systemic impact on the integrity of the EU financial system
- Having strategic deficiencies in their AML/CFT regimes
High-Risk Third Countries Listed by the EU
Turkey is among 32 countries listed as high-risk third countries, according to the updated regulation. The list also includes:
- Afghanistan
- Iran
- North Korea
- Syria
- And others
The Commission will continue to monitor progress in these countries and assess additional jurisdictions.
Requirements for Gatekeepers
The EU’s anti-money laundering directives require gatekeepers such as banks to carefully consider business relationships and transactions involving high-risk third countries through increased checks and control measures defined under Article 18a of the directive.
Broader Efforts by the Commission
The listing process is part of a broader effort by the Commission to strengthen AML/CFT measures in the EU. The Commission is also a member of FATF, an observer at Moneyval, and participates in the Egmont Group, which provides financial intelligence units with a platform for secure exchange of expertise and financial intelligence to combat money laundering, terrorist financing, and associated predicate offenses.
Conclusion
The updated regulation is part of the EU’s efforts to address the threat posed by dirty cash and to maintain the integrity of its financial system. The Commission will continue to monitor progress in high-risk countries and assess additional jurisdictions as necessary.