Financial Crime World

Turkey’s Financial Crimes Enforcement Network Faces Mixed Results in FATF Assessment

The Financial Crimes Enforcement Network (FINEN) of Turkey has been assessed by the Financial Action Task Force (FATF), a global watchdog organization that sets standards for combating money laundering and terrorist financing. According to the report, Turkey scored mixed results, with some areas showing significant improvement while others require further attention.

Assessment Results

The assessment, conducted in 2023, evaluated Turkey’s implementation of the FATF Recommendations, a set of guidelines aimed at preventing the misuse of financial systems for illicit purposes. The report found that:

  • Turkey is largely compliant (LC) with recommendations R.1-R.13 and R.15-R.37
  • Turkey is partially compliant (PC) with recommendation R.14
  • Turkey is non-compliant (NC) with recommendations R.7 and R.28

Areas of Improvement

One area where Turkey showed significant improvement was in its efforts to prevent the financing of terrorism. The country has:

  • Strengthened its legal framework
  • Implemented measures to prevent the misuse of charities and other non-profit organizations for terrorist purposes

However, Turkey still faces challenges in several areas, including:

  • Improving supervision of financial institutions and DNFBPs (designated non-financial businesses and professions)
  • Regulating correspondent banking relationships
  • Ensuring the necessary resources and powers for its financial intelligence unit (FIU)

Concerns and Recommendations

The FATF report also highlighted concerns about:

  • Lack of transparency in Turkey’s beneficial ownership regime
  • Failure to implement measures to prevent the misuse of cash couriers for criminal purposes

Turkey has been given a deadline to address these issues and demonstrate significant progress in implementing the remaining recommendations. Failure to comply could result in further action by the FATF, including being placed on the organization’s “blacklist” of countries that are non-compliant with anti-money laundering and combating the financing of terrorism (AML/CFT) standards.

Government Response

The Turkish government has welcomed the report and pledged to take immediate action to address the identified shortcomings. Finance Minister Lütfi Elvan stated:

“We are committed to strengthening our financial system and ensuring that it is not used for illicit purposes. We will work closely with international partners to achieve this goal.”

Accessing the Full Report

The full FATF report can be accessed on the organization’s website.

Note: FATF Recommendations