Bloomberg/Nicole Tungby Kudakwashe Muzoriwa
Paris-based Financial Action Task Force (FATF) has urged Turkish authorities to address shortcomings in tackling money laundering (ML) and terrorism financing (TF) or risk being added to a gray list of countries with inadequate financial controls.
In a report, Anti-money laundering and counter-terrorist financing measures: Turkey, FATF stated that Turkey has a low rate of conviction for terrorism financing, pointing to data that the watchdog obtained from authorities showing more than 6,000 people were prosecuted in 2017 but only 115 convicted.
FATF said that Turkish law enforcement agencies’ identification of ML activity for investigation through their analysis of STRs and other reports submitted to the Financial Crimes Investigation Board (MASAK) is not commensurate with the risk profile in Turkey.
Out of 11 areas evaluated, Turkey was deemed to require major or fundamental improvements in nine and the report’s findings mean Ankara will be put under observation for a year and risk being added to the ‘gray list’ if it does not make improvements.
The report stated that while Turkish banks have the best understanding of ML among the reporting entities, the understanding of TF risk is relatively weaker. Additionally, the level of understanding of ML/TF risks across designated non-financial businesses and professions (DNFBPs) is also said to be limited.
The watchdog said that Turkey should address the gaps in its legal framework to fully meet its obligations concerning targeted financial sanctions related to ML/TF.