Financial watchdog conducts assessment visit in Turkey

A team from the Financial Action Task Force, an international crime watchdog that “grey-listed” Turkey in 2021, held meetings with Turkish authorities last week ahead of its highly-anticipated report on the country next month, two sources said.

The “on-site” visit, which was not publicised, assessed Turkey’s progress in curbing the money laundering and terrorist financing concerns that prompted the downgrade in 2021, said one of the people familiar with the multi-day visit.

The person said that the team’s report will form the basis of the FATF’s decision at a June 28 plenary, which Finance Minister Mehmet Simsek has signalled will mark Turkey’s departure from the grey list of countries under special scrutiny.

Turkey’s Treasury and central bank did not immediately respond to requests for comment on the matter.

In its last statement on Turkey, in February, the FATF said it made an initial determination that the country “has substantially completed its action plan” and warrants an on-site assessment.

It was unclear which government, private sector or non-governmental entities or officials met with the team from the FATF, which was set up by the G7 group of advanced economies to protect the global financial system.

The FATF grey listed Turkey in October 2021 for failing to supervise its banking, real estate and other sectors vulnerable to money laundering and to financing groups such as Islamic State and al Qaeda that are on the United Nations’ sanctions list.

Twenty other countries are on the FATF’s grey list. IMF research shows such a downgrade can strain countries’ ties to foreign banks and investors that follow FATF rankings, so an upgrade in June could boost the Turkish lira and assets.

Simsek, who has spearheaded a U-turn to more orthodox economic policies over the last year, said in late February: “We have successfully completed our technical studies to remove our country from the grey list.”

“The process of leaving the grey list will be completed with the on-site inspection to be held in June,” he added on social media platform X.