Global watchdog removes Türkiye from ‘gray list’

ANKARA

The international financial crime watchdog Financial Action Task Force (FATF) removed Türkiye from its "gray list" of countries that require special scrutiny on June 28.

“We succeeded,” Turkish Treasury and Finance Minister Mehmet Şimşek wrote on X ahead of FATF’s official announcement of Türkiye’s removal – a long-awaited move that is expected to accelerate foreign investments.

Türkiye was downgraded to the "gray list" in 2021 due to concerns over money laundering and terror financing. The latest move came after an FATF team held meetings with Turkish authorities to assess progress in addressing those concerns.

Türkiye has made "significant progress" in improving its regime of anti-money laundering and combating the financing of terrorism and is "no longer subject to the FATF’s increased monitoring process,” the Paris-based body said in a statement.

The development has substantially bolstered the confidence of international investors in the country’s financial system, Turkish Vice President Cevdet Yılmaz said in a social media post.

"The decision will yield exceedingly positive outcomes for both our financial and real sectors.”

The resolution is anticipated to expedite the influx of international capital and exert a favorable impact on borrowing costs, he added.

In a written statement, the Treasury and Finance Ministry said that the measures taken to exit the list were the result of collaborative efforts with the justice, interior and justice ministries.

Speaking to daily Hürriyet, an expert highlighted the substantial efforts Türkiye has made to comply with the 40 criteria set forth by the FATF for removal from its list, emphasizing that the country's policies have been successful in building trust.

"In the short to medium term, we will witness the positive impacts of exiting the grey list. As you know, a significant portion of international investment funds were previously unable to invest in countries on the grey list due to regulatory constraints,” Dr. Erkan Kork said.

“With the recent decision, funds can now invest in Türkiye. I believe this will trigger a substantial influx of capital," he stated.

The FATF said in February that Türkiye "has substantially completed its action plan" and warranted an on-site assessment. It held talks in Türkiye last month to evaluate the country's actions against money laundering and illegal financing.

This week, the parliament adopted legislation covering crypto assets as part of the efforts. According to the bill, crypto asset service providers must obtain permission from the Capital Markets Board (SPK) before establishment and operation.

The FATF, an international body comprising 40 member countries, categorizes approximately two dozen nations on its “gray list,” indicating they require heightened scrutiny due to perceived risks related to financial crime.

In February, the FATF removed the United Arab Emirates from this list, recognizing improvements in its anti-money laundering and counter-terrorism financing measures.