Turkey Fails to Meet International Standards on Money Laundering Detection, Report Says

The Financial Action Task Force (FATF) has released a recent report assessing Turkey’s efforts to detect and prevent money laundering and terrorist financing. The report reveals significant shortcomings in the country’s anti-money laundering and counter-terrorist financing system.

Shortcomings Identified

Insufficient asset freezing: Turkey’s authorities are unable to effectively freeze assets linked to terrorism and proliferation of weapons of mass destruction, leaving the country vulnerable to abuse by criminals and terrorists.
Limited understanding among non-financial entities: Real estate agents, dealers in precious metals and stones, and other non-financial entities have a limited understanding of their potential exposure to transactions with links to crime.
Ineffective sanctions for non-compliance: While Turkey has a good legal framework in place, it needs to do more to ensure that its regulatory regime is effective and proportionate.

Recommendations for Improvement

Enhance asset freezing mechanisms: Turkey’s authorities must improve their ability to freeze assets linked to terrorism and proliferation of weapons of mass destruction.
Increase awareness among non-financial entities: The country needs to raise awareness among non-financial entities about the risks they face from money laundering and terrorist financing.
Improve sanctions for non-compliance: Turkey should ensure that its regulatory regime is effective and proportionate, with robust sanctions for non-compliance.

Progress Made

While Turkey has made progress in strengthening its anti-money laundering and counter-terrorist financing regime, there are still significant challenges to be addressed. The country’s financial sector has a good understanding of its potential exposure to transactions with links to crime, but less understanding of its exposure to terrorist financing.

Conclusion

Turkey must address the gaps identified by the FATF report if it wants to meet international standards on money laundering detection. The country needs to improve its asset freezing mechanisms, increase awareness among non-financial entities, and enhance its sanctions for non-compliance.