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Trkiye has strengthened its defences against money laundering and terrorist financing but needs to do more to tackle cross-border illicit finance, professional money laundering and recover criminal assets, the Financial Action Task Force (FATF) said in its latest mutual evaluation of the country.
The global financial crime watchdog said Trkiye has made progress since its previous assessment in 2019, particularly in the use of financial intelligence, domestic coordination and international cooperation to pursue money laundering and related offences. More than 10,000 money laundering cases have been prosecuted in the past five years, according to the assessment. However, the report also identified a backlog of more than 7,000 cases pending prosecution, highlighting challenges in translating investigations into judicial outcomes. FATF said Trkiye's position as a regional financial, trade and logistics hub, combined with the size of its cash-based and informal economy, exposes it to significant illicit finance risks. It called for stronger operational efforts against professional money laundering, misuse of corporate structures and cross-border movement of illicit funds. "Trkiye has, since its last assessment in 2019, made important progress in strengthening its defences, but maintaining momentum is critical to economic resilience and protecting people and communities from harmful criminal activity," FATF President Giles Thomson said. He added that Trkiye should continue to improve its effectiveness in money laundering and terrorist financing investigations, financial sanctions and asset recovery efforts. The assessment found that Trkiye has strong domestic coordination among its financial intelligence unit, MASAK, law enforcement agencies and other authorities. MASAK's access to numerous databases provides a broad information base for producing financial intelligence used in money laundering, predicate offence and terrorist financing investigations and prosecutions. Trkiye also has mechanisms for international cooperation, with the FATF finding that the country generally seeks and provides mutual legal assistance, extradition and other forms of cooperation in line with its risk profile. However, the watchdog identified weaknesses in areas including the identification and monitoring of politically exposed persons, suspicious transaction reporting and reporting of terrorist-financing-related activity. The assessment also highlighted risks associated with Trkiye's financial and non-financial sectors. The banking sector was identified in national risk assessments as the sector most abused for money laundering and terrorist financing. Trkiye has strengthened supervision of higher-risk non-financial sectors, including accountants, real estate agencies and dealers in precious metals and stones. The country is among the world's top 10 jewellery-producing countries, according to the assessment. While authorities generally have timely access to beneficial ownership information and reporting levels are high, FATF said further improvements are needed to ensure such information remains accurate and up-to-date. On cross-border threats, FATF said Trkiye needs to deepen its understanding of money laundering and terrorist financing risks linked to trade and smuggling and strengthen operational responses in higher-risk areas. The watchdog also pointed to challenges in recovering criminal assets across borders. Although mechanisms exist to identify and trace criminal property, the amounts seized and confiscated remain modest relative to Trkiye's risk exposure. FATF said the limited number of cross-border seizures of cash and other goods was concerning despite Trkiye having advanced technology to detect illegal movements of cash at land and air checkpoints. At the same time, Trkiye has returned more than EUR 150 million in funds and assets to victims of crime, with about 92 per cent of the returned assets relating to fraud and forgery, according to the assessment. On terrorist financing, FATF said Turkish authorities have developed and implemented robust policies and operations in response to the country's elevated risks. The assessment found that Trkiye has strong institutional capabilities to identify and investigate terrorist financing involving organisations identified as threats in its national risk assessment. However, challenges remain in detecting financing linked to other organisations and networks identified through international sources and cooperation channels. FATF also said some higher-risk sectors, including exchange offices, money or value transfer services and, to some extent, virtual asset service providers, need a better understanding of terrorist financing risks. The mutual evaluation followed a 14-month assessment involving more than 300 experts from the public and private sectors. Those consulted included MASAK, the Turkish National Police, the Gendarmerie General Command, Trkiye's Central Bank, the Banking Regulations and Supervision Agency, as well as other financial and non-financial sector supervisors and self-regulatory bodies. Following the assessment, Trkiye received a roadmap of key recommended actions to be completed within three years. These include improving understanding of terrorist financing risks, prioritising money laundering investigations and prosecutions involving high-risk predicate offences such as drug trafficking, smuggling and illegal betting, strengthening terrorist financing-related prosecutions and convictions, and improving asset recovery. Based on its effectiveness and technical compliance ratings, Trkiye has been placed in enhanced follow-up and will report back to FATF on its progress. (ANI)
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