Turkey Spared Financial Regulatory Sanctions

Published: 01 March 2013


The Republic of Turkey risked being blacklisted by an international financial regulatory body on February 22, but the last-minute passing of a terrorism-financing law prevented the re-categorization of Turkey as non-compliant by the Financial Action Task Force (FATF).

The FATF sets international standards for curtailing terrorist financing, money laundering, and the proliferation of weapons of mass destruction. The body is comprised of 36 members, and relies as well on a network of regional bodies; over 180 jurisdictions are linked to the FATF.

In October 2012, the FATF stated it was “deeply concerned” regarding Turkey’s failure to meet its requirements as an FATF member, especially in relation to “fully criminalizing” terrorist financing and establishing an “adequate framework” to successfully pinpoint and freeze terrorist finances. The body said it would suspend Turkey’s membership on February 22, 2013 unless Turkey took remedial action.

Turkey came close to missing the FATF deadline, risking suspension from the organization. The Turkish Grand National Assembly adopted the Law on the Prevention of the Financing of Terrorism on February 7 and the legislation was signed into law on February 15. In a statement, , the FATF welcomed the Turkish government’s progress, noting that the new law addressed “many of the shortcomings” detailed by the FATF. The organization announced that despite a “number of ongoing shortcomings,” Turkey’s membership would not be suspended.

In the same statement, the FATF singled out Morocco and Tajikistan as members “not making significant progress” in their commitments. Morocco’s failure to address significant shortcomings in its terrorist financing laws, and “strategic” shortcomings in Tajikistan’s frameworks on money laundering and terrorist financing were noted.

Concurrently, the FATF welcomed “significant progress” by both Ghana and Venezuela in meeting membership responsibilities, noting that both nations had “established the legal and regulatory framework” necessary to meet their action plans. Both nations were removed from the FATF’s monitoring process, and will work with regional bodies affiliated with the FATF to ensure continued progress in addressing the “full range of issues” related to money laundering and terrorist financing.