The Financial Action Task Force (FATF), an international watchdog downgraded Turkey to a so-called grey list on Thursday, October 21, 2021, for failing to head off money laundering and terrorist financing.
Set up by the G7, FATF is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society.
Turkey, the first NATO country to be grey listed, needs to address “serious issues of supervision” in its banking and real estate sectors, and with gold and precious stones dealers, FATF President Marcus Pleyer told a news conference.
“Turkey needs to show it is effectively tackling complex money laundering cases and show it is pursuing terrorist financing prosecutions…and prioritizing cases of U.N.- designated terrorist organizations such as ISIL and al Qaeda” Pleyer added.
In response to the news, Armenian Council of America’s Washington D.C. representative Taniel Koushakjian stated “We applaud the Financial Action Task Force for taking the appropriate action with regard for Turkey’s terrorism financing and rampant financial corruption. Unfortunately, Turkey’s support of ISIS and other Islamist militant organizations has increased and has led to further destabilization across the region.”
In 2019, the FATF warned Turkey about “serious shortcomings” including the need to improve measures to freeze assets linked to terrorism and weapons of mass destruction proliferation.
Other FATF grey-listed countries include Pakistan, Morocco, Albania and Yemen.
Of note, Turkey facilitated the transport of Syrian based Islamist militant organizations to Azerbaijan, to aid Azerbaijan against the indigenous Armenian population during the recent Artsakh war. Turkey also supports, and in many instances actively promotes the Grey Wolves, an ultra-far right Turkish movement which has been banned in France. In May 2021, the European Parliament called all 27 member states of the European Union to designate the Grey Wolves as a terrorist group.
The FATF monitors countries to ensure they implement the FATF Standards fully and effectively, and holds countries to account that do not comply. Research shows a grey-listing downgrade strains a countries’ ties to foreign banks and investors that follow FATF rankings.