Turkey’s Compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Standards

Introduction

The Financial Action Task Force (FATF) plays a crucial role in preventing and combating money laundering and terrorist financing globally. As a member of the FATF, Turkey has been working to implement AML/CFT measures to strengthen its financial system and protect against illicit activities. This article provides an overview of Turkey’s progress in implementing AML/CFT measures, challenges it faces, and its compliance with FATF standards.

Turkey’s Progress in AML/CFT

Turkey has made significant efforts to implement AML/CFT measures, including:

• Strengthening anti-money laundering laws: Turkey has introduced several laws and regulations aimed at preventing money laundering and terrorist financing.
• Improving customer due diligence: Turkish financial institutions have enhanced their customer due diligence procedures to identify and report suspicious transactions.
• Enhancing transparency and beneficial ownership: Turkey has implemented measures to improve transparency and disclose beneficial ownership information.

FATF Standards

The FATF has set out 40 recommendations for countries to follow to prevent and counter money laundering and terrorist financing. These recommendations cover a range of areas, including:

• Customer due diligence
• Record-keeping
• Reporting suspicious transactions
• International cooperation

Turkey’s Compliance with FATF Standards

Turkey has been rated as “increased monitoring” by the FATF, which means that it is considered a high-risk jurisdiction for money laundering and terrorist financing. This rating indicates that Turkey needs to continue its efforts to strengthen its AML/CFT framework.

MASAK’s Role in AML/CFT

The Money Laundering and Suspicious Transaction Investigation Unit (MASAK) is responsible for implementing AML/CFT measures in Turkey. MASAK has made efforts to strengthen its capacity in this area, including:

• Providing training and guidance: MASAK provides regular training and guidance to financial institutions on AML/CFT best practices.
• Conducting investigations: MASAK conducts investigations into suspicious transactions and reports any findings to the relevant authorities.

Challenges Facing Turkey

Despite its efforts, Turkey faces several challenges in its efforts to combat money laundering, including:

• Lack of resources: Turkey’s financial institutions face a lack of resources to implement effective AML/CFT measures.
• Inadequate legislation: Turkey’s AML/CFT laws and regulations are not always adequate to prevent money laundering and terrorist financing.

Conclusion

Turkey has made significant progress in implementing AML/CFT measures, but there is still much work to be done. The FATF’s “increased monitoring” rating indicates that Turkey needs to continue its efforts to strengthen its AML/CFT framework. By addressing the challenges it faces and continuing to cooperate with international organizations, Turkey can improve its compliance with FATF standards and protect against illicit activities.