Speculation Arises as FATF Conducts On-Site Inspection in Turkey, Potential Removal from 'Grey List' Looms

Recent discussions between a team from the Financial Action Task Force (FATF) and Turkish authorities have sparked speculation regarding Turkey's potential removal from the FATF's watchlist, commonly known as the "grey list." Turkey's inclusion on the list dates back to 2021, and the recent on-site visit by the FATF team, conducted discreetly, evaluated Turkey's progress in addressing concerns related to money laundering and terrorist financing.

According to sources familiar with the matter, the team's report from the visit will play a pivotal role in the FATF's decision, set to be announced at a June 28 plenary session. Finance Minister Mehmet Simsek has hinted at Turkey's anticipated departure from the grey list during this event. However, both Turkey's Treasury and central bank have refrained from commenting on the ongoing speculation.

The FATF's previous statement on Turkey, issued in February, suggested that the country had made significant strides in completing its action plan to address the identified issues. The upcoming decision will be closely watched, particularly as Turkey aims to transition out of the grey list status.

The grey listing of Turkey in October 2021 was attributed to deficiencies in supervising sectors vulnerable to money laundering, such as banking and real estate, as well as shortcomings in preventing the financing of sanctioned groups like Islamic State and al Qaeda. Currently, twenty other countries share Turkey's status on the FATF's grey list.

Finance Minister Simsek, known for championing more orthodox economic policies, expressed confidence in Turkey's progress, stating on social media platform X, "We have successfully completed our technical studies to remove our country from the grey list." He further emphasized that the on-site inspection scheduled for June would mark the final stage in the process of exiting the grey list.

Should Turkey receive a favorable assessment from the FATF and be removed from the grey list, it could potentially strengthen ties with foreign banks and investors, who often take FATF rankings into consideration. This, in turn, may positively impact the Turkish lira and assets, highlighting the significance of the forthcoming decision.

By fLEXI tEAM