Türkiye Nears End of FATF Review: Grey List Risk Seen as Low
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Türkiye is approaching the final stage of its Financial Action Task Force (FATF) fifth-round evaluation, with early signals pointing to a positive outcome. Experts say the likelihood of Türkiye being placed back on the grey list is low, citing significant improvements in legal frameworks, enforcement capacity, and financial oversight in recent years.
Final phase of FATF evaluation underway
Türkiye’s fifth-round mutual evaluation process by the Financial Action Task Force (FATF) has entered its final stage.
According to former MASAK Chairman Osman Dereli, initial impressions following on-site inspections are broadly positive.
A final decision is expected to be announced at the FATF General Assembly in June.
“Low probability” of returning to grey list
Experts believe Türkiye is unlikely to be placed back on the FATF grey list.
Dereli noted that unless a major deficiency is identified in the final report, the country has largely moved beyond the risk of enhanced monitoring status.
Türkiye exited grey list in 2024
Türkiye was previously placed on the FATF grey list due to:
- Weaknesses in technical compliance
- Gaps in implementation and enforcement
However, following a series of reforms, the country was removed from the list in February 2024.
Major progress in legal and institutional reforms
Authorities have implemented a broad set of measures to strengthen the fight against money laundering and terrorist financing.
Key reforms include:
- Expansion of MASAK’s authority
- Increased administrative penalties
- Introduction of asset-freezing mechanisms for terrorism financing
- Establishment of specialized units within the judiciary for financial crime investigations
These steps have significantly enhanced both regulatory compliance and enforcement capacity.
Strong improvement in technical compliance
Recent assessments show notable progress in Türkiye’s alignment with FATF standards:
- No areas remain classified as non-compliant
- Full compliance in 14 recommendations
- Largely compliant in 25 areas
- Only one area remains partially compliant
This marks a substantial improvement compared to earlier evaluations.
Focus shifts from rules to implementation
FATF’s current methodology places greater emphasis on effectiveness rather than just legal frameworks.
Türkiye has shown progress in several key areas:
- Financial intelligence generation and analysis
- Investigation and prosecution of financial crimes
- Strengthening compliance culture within the financial sector
Evaluation team composition may support balanced review
The composition of the current evaluation team is also seen as a positive factor.
Unlike previous rounds dominated by experts from countries such as the U.S. and the U.K., the current team includes representatives from jurisdictions with legal systems more similar to Türkiye’s.
This could contribute to a more balanced and context-sensitive assessment.
Continuous process, not a one-time test
Experts emphasize that FATF evaluations are not one-off exercises but part of an ongoing process.
Sustaining progress requires:
- Continued regulatory vigilance
- Active participation from financial institutions
- Broader compliance across all relevant sectors
All eyes on June decision
Following the completion of the evaluation report, Türkiye’s final status will be determined at the FATF General Assembly in June.
Given recent reforms and institutional improvements, analysts expect the outcome to be broadly positive.
Conclusion
Türkiye’s progress in the FATF process reflects a significant strengthening of its financial crime framework.
While the immediate risk of returning to the grey list appears limited, maintaining these gains will be critical for long-term credibility and financial stability.
Source: Yeni Cag Gazette
