Turkey’s Anti-Money Laundering Regulations Come Under Scrutiny as FATF Releases Follow-Up Report for 2023

The Financial Action Task Force (FATF) has released its follow-up report on Turkey’s implementation of anti-money laundering regulations, assessing the country’s compliance with technical requirements. The report highlights both strengths and weaknesses in Turkey’s efforts to combat financial crimes.

Compliance Highlights

Turkey is largely compliant with several key requirements, including:

• Assessing risk and applying a risk-based approach (R.1)
• National cooperation and coordination (R.2)
• Confiscation and provisional measures (R.4)
• Addressing terrorist financing offenses (R.5)
• Implementing targeted financial sanctions related to terrorism and terrorist financing (R.6)

Shortcomings

However, the report identifies areas where Turkey falls short of compliance, including:

• Financial institution secrecy laws (R.9)
• Customer due diligence (R.10)
• Internal controls and foreign branches and subsidiaries (R.18)
• Reliance on third parties (R.17)
• Tipping-off and confidentiality (R.21)

Partial Compliance

Turkey is partially compliant in the following areas:

• New technologies (R.15)
• Wire transfers (R.16)
• DNFBPs: other measures (R.23)

Limited Capacity Compliance

The country has also been found to be compliant with certain requirements in a limited capacity, including:

• Transparency and beneficial ownership of legal persons (R.24)
• DNFBPs: customer due diligence (R.22)

Conclusion

The FATF report serves as a critical evaluation of Turkey’s anti-money laundering regulations, highlighting areas where improvement is needed to effectively combat financial crimes. The Turkish government will need to address these shortcomings in order to maintain its position as a key player in the global fight against money laundering and terrorist financing.

Note: R.1-R.24 refer to specific recommendations outlined by the FATF.