Turkey Removed from Financial Watchdog’s Gray List, Boosting Economic Confidence

A Major Victory for Turkey’s Economic Turnaround Efforts

In a significant development, Turkey has been removed from the gray list of countries that need special monitoring by the Financial Action Task Force (FATF), an international organization dedicated to combating money laundering and illicit cash flows. This announcement is a major boost to Turkey’s economic confidence, as it demonstrates the country’s progress in improving its anti-money laundering and combating the financing of terrorism regime.

FATF’s Concerns Addressed

Last year, the FATF listed several “deficiencies” in Turkey’s AML/CFT regime, including:

• Unregistered money transfer services
• Insufficient resources dedicated to terrorist financing investigations
• Alleged involvement in sanctions evasion
• Lack of oversight on high-risk sectors such as banking and real estate
• Insufficient oversight of non-profit organizations that could be used for terrorist financing

However, the FATF’s latest report concludes that Turkey has made significant progress in addressing these deficiencies, strengthening the effectiveness of its AML/CFT regime.

Government Response

Turkey’s government welcomed the news, with Finance Minister Mehmet Simsek tweeting “We did it” alongside a Turkish flag emoji. Vice President Cevdet Yilmaz also commented on the decision, stating that it would have extremely positive consequences for the financial sector and the economy, boosting international investors’ confidence in Turkey’s financial system.

Impact on Economic Turnaround Efforts

The FATF’s announcement is expected to have a significant impact on Turkey’s economic turnaround efforts, which have been hampered by high inflation, a depreciating local currency, and inconsistent foreign investment levels. According to Mohamed Daoud, industry practice lead at Moody’s, the removal from the gray list will boost Turkey’s reputation internationally, potentially increasing foreign investment and relationships with European and US institutions.

Conclusion

Turkey’s removal from the FATF’s gray list is a major victory for its economic turnaround efforts, demonstrating the country’s commitment to improving its AML/CFT regime. This development is expected to have a positive impact on international investors’ confidence in Turkey’s financial system, potentially leading to increased foreign investment and improved economic stability.