March 6, 2014 | Quote
The Gray List: Turkey’s Financing of Terrorism
The Financial Action Task Force (FATF) gathered in Paris, France on February 14th for a plenary session to analyze the efforts of its 36 member countries and of another 180 jurisdictions around the world in combating the financing of terrorism. In this last session, particular scrutiny was placed on the member country of Turkey, which was at risk of being blacklisted for its reluctance and non-compliance to follow anti-terrorism financing guidelines set up by FAFT. With a plummeting currency, a debilitating internal political imbroglio that has no end in sight, and a weakening relationship with the West, the stage had been set for a decision that could further push the country into further isolation and turmoil.
The FAFT is the inter-governmental body that was established in 1989 by the Group of Seven (G-7). From the beginning, the FAFT focused on developing specific proposals to combat money laundering. However, following the September 11 terrorist attacks in the United States, the FATF issued 8 Special Recommendations on Terrorism Financing, enlarging its mandate by encapsulating efforts to combat the financing of terrorists as well. In pursuit of this new goal, the FAFT has employed a new practice of blacklisting countries that the organization assesses as deliberately dealing in or ignoring corruption and illicit finance.
In Paris, FATF urged that Turkey, the only NATO country on FATF’s gray list, needed to tighten laws blocking the financing of terrorist groups or face disciplinary action by the FATF. Specifically, FAFT requested that the Turkish government criminalize the act of terrorist financing, establish a legal framework for identifying terrorist assets, confront inadequate monitoring of bank transfers, as well as freezing the accounts of suspected terrorists.
At this latest meeting FATF welcomed this significant step made by Turkey, which improved the country’s compliance with some international standards. As a consequence, FATF has decided not to suspend Turkey’s membership. However, because of other additional concerns that were not addressed, it was still left on the gray list with the countries including Algeria, Ecuador, Ethiopia, Indonesia, Myanmar, Pakistan, Syria, and Yemen. It would seem that Turkey is still not out of clear, and will be closely watched by political, financial, and security analysts for months to come. As Jonathan Schanzer, former terrorism finance analyst at the treasury stated, “Turkey’s terrorism finance problem is growing but has not reached the blatantly rogue state levels of Iran and North Korea, the only two blacklisted countries.”