Turkey faces risk of being grey listed by global money laundering watchdog over non-compliance in measures

Turkey's opposition has said that the ruling AKP is rushing to pass a draft law on countering the financing of proliferation of weapons of mass destructions due to a risk of being placed on the Financial Action Taskforce (FATF)'s “grey list” for flocking measures to combat money laundering. Opposition MPs have slammed the AKP for using the relevant draft bill as a cover to exercise its control over NGOs as the bill also includes articles that allow the government to appoint trustees to NGOs.

Friday December 18 2020 11:53 am

FATF Plenary gathers to elect its next president in February in this file photo.

Müzeyyen Yüce / DUVAR

Turkey's opposition has said that the ruling Justice and Development Party (AKP) is rushing to legalize a draft law on countering the financing of proliferation of weapons of mass destruction as the country faces a risk of being placed on the Financial Action Taskforce (FATF)'s “grey list.”

The FATF is an international watchdog that helps combat money laundering and terrorist financing across the globe. Its “grey list” focuses on countries that have failed to meet international transparency standards, as requested by the G20.

Main opposition Republican People's Party (CHP) spokesperson for Parliament Justice Commission, Zeynel Emre, said that Turkey has not yet complied with some of the 40 recommendations previously conveyed by the FATF, especially with regards to the treatment of politically exposed people.

With regards to politically exposed persons, Turkish legislation has no definition, and therefore financial institutions cannot legally identify such beneficiaries. This issue highlights that the reasons for partial compliance with FATF rules are political rather than technical.

The FATF “has determined that Turkey has not yet taken sufficient precautions with regards to this issue and does not have effective measures, and is expecting the country to do this in the short-term,” said Emre.

The CHP lawmaker's comments came after the AKP submitted the relevant draft bill to Parliament on Dec. 17. The bill however has been found controversial as it also includes articles that allow the government to appoint trustee administrations to non-governmental organizations and temporarily suspend the NGOs' activities.

Parliament's Justice Commission is set to discuss the bill starting on Dec. 18.

Emre said that he does not believe the AKP will tackle the law's shortcoming in the area concerning politically exposed persons. “Because if we look at such people, they are all related to the AKP. If these recommendations [of the FATF] had been previously complied with, the Reza Zarrab incident would not have happened in this country,” he said.

Iranian-Turkish national Zarrab stood in a trial in the U.S. for his involvement in a massive money-laundering scheme that still sours relations between the two countries.

The CHP lawmaker slammed the AKP for including articles in the relevant draft bill that concerns the functioning of NGOs. “We will object to these articles,” Emre said.

A member of Parliament Justice Commission from the Peoples' Democratic Party (HDP), Mehmet Rüştü, similarly said that the AKP brought the relevant draft law to Parliament's agenda as FATF had given Turkey until Dec. 18 to undertake a step with regards to its recommendations.

“The international arena believes that Turkey has not undertaken a serious step with regards to the international financing of terror and nuclear armament,” Rüştü said.

The HDP lawmaker also said that the AKP is using the relevant draft bill as a cover to exercise its control over NGOs. He said that the government is seeking to “place opposition associations and NGOs under control” with this regulation.