An evaluation team from the Financial Action Task Force (FATF) is expected to visit Turkey this month, nearly a year after the country was removed from the organization’s “grey list” for progress in tackling money laundering and terror financing, five sources told Reuters.
The visit is aimed at assessing whether Ankara has maintained the commitments that led to its removal from the list. Failure to do so could result in Turkey being put back under increased monitoring, potentially hurting its improving financial reputation.
According to the sources the FATF delegation plans to hold meetings from November 24 to 28 with the Financial Crimes Investigation Board (MASAK), banks, payment service providers and other institutions across the economy. The review could last as long as three weeks.
Turkey was added to the grey list in October 2021, shortly before the country’s currency entered one of its most severe crises, due to what the watchdog said was insufficient oversight of sectors vulnerable to money laundering, including banking and real estate.
Crackdown ahead of inspection
A FATF representative confirmed that an on-site visit is planned for November but declined to give further details. MASAK, which coordinates directly with the international body, did not respond to Reuters’ request for comment.
In the weeks leading up to the visit, Turkish authorities launched multiple investigations into alleged money laundering and suspended or seized the operations of dozens of companies.
According to central bank announcements published in the Official Gazette, at least 10 payment companies, among them the prominent brand Papara, have had their licenses suspended or revoked, some over alleged illegal transactions. The central bank currently lists 61 licensed electronic money institutions.
Ramazan Başak, a former deputy head of MASAK, told Reuters that the recent investigations into banks, payment firms and holding companies were appropriate but overdue.
“The current state of the sector stems from three key errors: insufficient attention to company ownership during establishment, ineffective audits and failure to take timely and adequate action,” Başak said.
Payment companies under scrutiny
FATF’s 2023 evaluation rated Turkey as “partially compliant” in its regulation of virtual assets. That year also marked a shift toward more orthodox economic policies, encouraging some foreign investors to return to Turkish markets.
One of the sources, a banker, said the industry had submitted reports to authorities on ownership structures and licensing procedures as payment service providers expanded rapidly over the past five years.
Both banks and payment companies have voiced concerns about the fast pace of growth, the large number of licenses issued and whether relationship networks have been adequately monitored, the source added.