Istanbul: Turkey is preparing for a crucial assessment from the Financial Action Task Force (FATF), just over a year after it exited the international “grey list” of countries under enhanced money-laundering and terrorist-financing scrutiny. Sources familiar with the matter confirmed that the FATF is dispatching an onsite review team later this month, signaling that Ankara must prove its reforms are firmly implemented or risk being re-listed.
Turkey’s placement on the FATF grey list in October 2021 had highlighted significant gaps in its regulatory oversight of banks, real estate, and other sectors vulnerable to illicit financial flows. In 2024, Ankara secured its exit from the list by pledging stronger enforcement and regulatory compliance. However, FATF’s exit does not represent a permanent endorsement; the organization regularly conducts follow-up reviews to ensure that promised reforms are substantive rather than superficial. The upcoming visit is expected to last up to three weeks and will involve meetings with key institutions, including the Financial Crimes Investigation Board (MASAK), banks, and payments-service firms.
Experts say the FATF team will focus on several high-risk areas. These include oversight of payment-service providers and electronic-money institutions, transparency in beneficial ownership of firms, audit and supervision quality, virtual asset regulation, and monitoring of high-value cross-border transactions, particularly in the real estate sector. Previous FATF assessments rated Turkey as only “partially compliant” in monitoring virtual assets, highlighting ongoing vulnerabilities in digital financial services.
Ahead of the FATF review, Turkish authorities have intensified investigations and enforcement measures. At least ten electronic-money companies have had their licenses temporarily suspended or revoked, according to the official gazette. Ramazan Basak, a former deputy head of MASAK, noted that past weaknesses stemmed from insufficient scrutiny of controlling shareholders, inadequate audits, and delayed regulatory response to red flags. These measures suggest Ankara is actively addressing FATF’s prior concerns to strengthen the credibility of its financial system.
A positive FATF review would bolster Turkey’s financial reputation, potentially attracting investment and lowering borrowing costs. Conversely, a negative assessment could reintroduce reputational risks, complicate cross-border banking relations, and pressure the Turkish lira amid existing currency volatility. For global investors and financial institutions, the review will be closely watched, as FATF ratings directly influence risk assessments and due diligence protocols.
The FATF is expected to release its findings shortly after the onsite review, likely in late November or early December. Turkish authorities have indicated that further enforcement actions, particularly in the payments sector, may be announced as a demonstration of their commitment to reform. While Turkey has made significant strides since leaving the grey list, the upcoming evaluation represents a pivotal test of whether its financial reforms are durable and effective.
Turkey’s journey from grey-listing to regulatory improvement underscores the high stakes of maintaining international financial credibility. With the FATF review imminent, Ankara must balance the need for robust oversight with the pressures of economic stability, ensuring that its reforms are both comprehensive and enduring.