Turkey's measures to combat money laundering and terrorist financing

Publication details

Language

English

Country

Türkiye

Paris, 16 December 2019 - Turkey has understood the risks it faces from money laundering and terrorist financing but serious shortcomings remain, including the need to improve measures for freezing assets linked to terrorism and proliferation of weapons of mass destruction.

The Financial Action Task Force (FATF) assessed Turkey’s anti-money laundering and counter terrorist financing (AML/CFT) system. The report is a comprehensive review of the effectiveness of Turkey’s measures and their compliance with the FATF Recommendations.

This includes an assessment of its actions to address the risks emanating from designated terrorists or terrorist organisations. The report does not address the justification that led to the designation of an entity as a terrorist or terrorist group or organisation. 

Turkey completed a national risk assessment in 2018.  Due to its geographic location, the country faces the greatest money laundering risks from drug trafficking, migrant smuggling, human trafficking and fuel smuggling. The country also faces significant terrorist financing risks from both national and international threats.

In recent years, Turkey has significantly strengthened relevant laws and regulations. They form the foundation for positive action to address these risks and detect and prevent criminals and terrorist from misusing the financial system. However, it needs to swiftly improve implementation in a number of areas to boost effectiveness.

Authorities cooperate and coordinate well but they need to make better use of financial intelligence to improve and increase the number of money laundering investigations which currently result in few convictions only. The country must also develop a national strategy to permanently deprive criminals of the proceeds of their crimes.

When investigating terrorist financing cases, Turkey’s authorities focus largely on identifying the assets held by terror suspects, rather than expanding the scope to include the collection, movement, and use of funds or other assets. Turkey also needs to fundamentally improve its ability to freeze, without delay, assets linked to terrorism, financing of terrorism and proliferation of weapons of mass destruction.

Turkey’s authorities demonstrated a substantial level of effectiveness in their co-operation with foreign counterparts on a variety of requests and sharing information both spontaneously and on requests.

The Turkish banking sector has a good understanding of its potential exposure to transactions with links to crime, but less understanding of their exposure to terrorist financing. Non-financial entities, such as real estate agents, dealers in precious metal and stones have a less comprehensive and sometimes limited understanding of the risks they face. Supervision of the financial and other relevant sectors is generally well-developed but sanctions for non-compliance are not always effective, proportionate and dissuasive.

Turkey has understood the risks it faces from money laundering and terrorist financing and has established a legal framework that can form the basis for achieving effective outcomes, but it needs to swiftly address the gaps identified in this report.

The FATF adopted this report at its October 2019 Plenary meeting. 

Mutual Evaluation Report Turkey-2019

Filename
Mutual-Evaluation-Report-Turkey-2019.pdf
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3 MB
Format
application/pdf
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Technical Compliance

Ratings which reflect the extent to which a country has implemented the technical requirements of the FATF Recommendations.

Turkey Mutual Evaluation - 2019

R.1 - Assessing risk & applying risk-based approach
LC
R.2 - National cooperation and coordination
LC
R.3 - Money laundering offence
LC
R.4 - Confiscation and provisional measures
C
R.5 - Terrorist financing offence
LC
R.6 - Targeted financial sanctions related to terrorism & terrorist financing
PC
R.7 - Targeted financial sanctions related to proliferation
NC
R.8 - Non-profit organisations
PC
R.9 - Financial institution secrecy laws
C
R.10 - Customer due diligence
LC
R.11 - Record keeping
C
R.12 - Politically exposed persons
NC
R.13 - Correspondent banking
LC
R.14 - Money or value transfer services
LC
R.15 - New technologies
LC
R.16 - Wire transfers
LC
R.17 - Reliance on third parties
C
R.18 - Internal controls and foreign branches and subsidiaries
PC
R.19 - Higher-risk countries
LC
R.20 - Reporting of suspicious transactions
C
R.21 - Tipping-off and confidentiality
C
R.22 - DNFBPs: Customer due diligence
PC
R.23 - DNFBPs: Other measures
PC
R.24 - Transparency and beneficial ownership of legal persons
PC
R.25 - Transparency and beneficial ownership of legal arrangements
PC
R.26 - Regulation and supervision of financial institutions
PC
R.27 - Powers of supervisors
LC
R.28 - Regulation and supervision of DNFBPs
PC
R.29 - Financial intelligence units
C
R.30 - Responsibilities of law enforcement and investigative authorities
C
R.31 - Powers of law enforcement and investigative authorities
LC
R.32 - Cash couriers
LC
R.33 - Statistics
LC
R.34 - Guidance and feedback
LC
R.35- Sanctions
PC
R.36 - International instruments
LC
R.37 - Mutual legal assistance
C
R.38 - Mutual legal assistance: freezing and confiscation
C
R.39 - Extradition
C
R.40 - Other forms of international cooperation
LC

C = compliant   |   LC = largely compliant     |   PC = partially compliant   |   NC = non-compliant

Effectiveness

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Turkey Mutual Evaluation - 2019

IO1
SE
IO2
SE
IO3
ME
IO4
ME
IO5
ME
IO6
ME
IO7
ME
IO8
ME
IO9
ME
IO10
LE
IO11
LE

HE = high level of effectiveness   |   SE = substantial level of effectiveness    |   ME = moderate level of effectiveness   |   LE = low level of effectiveness

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