TURKEY’S CRITICAL EXAM REGARDING THE GREY LIST BEGINS

This analysis was published in the Economy newspaper on November 10, 2025.

The FATF, which combats money laundering and terrorist financing, will examine the measures and practices taken by Turkey, which has been removed from the grey list. The FATF is coming to Turkey, which was removed from the gray list last year, for its fifth round of evaluation reports. Turkey’s efforts to prevent money laundering and terrorist financing after being removed from the gray list will be examined. Former MASAK President Osman Dereli said the team will conduct in-depth investigations by holding one-on-one meetings with law enforcement agencies, financial intelligence units, and private sector representatives.

The Financial Action Task Force (FATF) is coming to Turkey, which was removed from the gray list last year, for its fifth round of evaluation. As a result of this evaluation, Turkey’s efforts to prevent money laundering and terrorist financing (AML/CFT) since its removal from the gray list will be examined. Unlike previous years’ audits, the FATF has adopted a new method this year and will now check not only the legislation but also whether it is being implemented and its results. According to information provided by Osman Dereli, former head of MASAK, who analyzed the FATF audit for EKONOMİ, the assessment team will hold one-on-one meetings with law enforcement agencies, financial intelligence units, supervisory authorities, and private sector representatives. The team will also scrutinize new risk areas in the financial system: topics such as crypto asset transactions, electronic money and payment systems, the real estate sector, and high-value commodity trading will now be examined in much greater depth.

Osman Dereli’s analysis: “Turkey has moved up a league in the fight against money laundering and financing crimes.”

WHAT HAPPENED AFTER THE 4TH ROUND OF EVALUATION?

Turkey has undergone four evaluation processes to date. The FATF had previously placed Turkey on the gray list in 2011 and 2021. In the 4th round assessment, the FATF’s main criticism of Turkey was the lack of sufficient investigation into money laundering, insufficient confiscation of criminal proceeds, and certain shortcomings in our legislation regarding administrative fines and the national mechanism for freezing assets. However, Turkey addressed these shortcomings during the follow-up process and was removed from the gray list. Significant reform steps have been taken in recent years: MASAK’s powers have been expanded, administrative fines have been increased, and the authority to freeze assets through administrative mechanisms has been established against those who commit the crime of terrorist financing. Money laundering desks have been established in courts, and exclusive investigations in this direction have begun. As a result, Turkey has reached a higher level in combating money laundering and terrorist financing. Money laundering investigations have been added to ongoing criminal investigations. MASAK has come to the fore in judicial investigations.

MEETINGS WITH PUBLIC AND PRIVATE SECTOR REPRESENTATIVES IN NOVEMBER

The FATF’s fifth round of evaluations of member countries has begun. Turkey’s fifth round evaluation process is ongoing. As part of the fifth-round evaluation, the FATF evaluation team will visit Turkey in November as part of the on-site visit, which is the most important part of the evaluation process. They will hold one-on-one meetings with relevant public institutions and private sector representatives in Turkey and evaluate the effectiveness of the implementation of the legislation.

WHAT WILL BE THE IMPACT OF ARTIFICIAL INTELLIGENCE ON THE EVALUATION?

One of the key points of the fifth round of evaluations will be the use of technology. The extent to which countries effectively use financial technologies, artificial intelligence, and machine learning systems in the fight against money laundering and terrorist financing is being assessed. On the other hand, new risks such as the monitoring of crypto assets, tracking of blockchains, digital identity recognition processes (i.e., remote identity verification processes), environmental crimes, and crowdfunding are being integrated into the assessment for closer monitoring.

“IT WILL BE SHAPED ACCORDING TO EACH COMPANY’S RISK PERCEPTION”

It is stated that AML/CFT strategies must be tailored to each company, that a one-size-fits-all strategy is not possible for all companies, and that it must be shaped according to each company’s risk perception.

WHAT ARE THE RESPONSIBILITIES OF AUTHORITIES AND OBLIGORS IN THE ASSESSMENT PROCESS?

The assessment team will conduct one-on-one interviews with law enforcement agencies, financial intelligence units, supervisory authorities, and private sector representatives. In addition, the FATF will also scrutinize new risk areas in the financial system: issues such as crypto asset transactions, high-value commodity trading, the real estate sector, and the role of professional service providers are now much more important. The new assessment period represents a critical threshold for both public authorities and the private sector in Turkey. This process requires not only regulatory bodies such as MASAK, BDDK, or SPK to take direct responsibility, but also banks, payment institutions, crypto service providers, and companies trading in precious metals and stones. FATF evaluations now question not only the existence of legal regulations on paper, but also how these regulations work in real life. In other words, the focus is not on “is there legislation?”, but on “is it being implemented effectively?”.

“NOT JUST AN AUDIT, BUT AN OPPORTUNITY TO STRENGTHEN RELIABILITY”

FATF’s fifth evaluation process is not just an audit process for Turkey, but also an opportunity to strengthen the reliability of the financial system. The FATF assessment is not just a technical score for a country; it is also an indicator of the international financial system’s confidence in that country. Therefore, undergoing a successful evaluation process and avoiding inclusion on gray lists is both an economic and a reputational issue.

What issues will the FATF focus on specifically for Turkey?

Turkey’s removal from the gray list in February 2024 was the result of legislative reforms. These improvements now need to be institutionalized and sustained.

■ It is crucial to demonstrate that MASAK effectively generates actionable intelligence and shares this intelligence with relevant parties.

■ Cooperation between law enforcement agencies, prosecutors, and supervisory bodies should be data-driven and risk-based.

■ The 5th round methodology requires real-time, accurate, and accessible beneficial ownership information.

■ Transparency measures should be demonstrated through actual investigations and sanctions for non-compliance.

■ Real estate agents, lawyers, accountants, and notaries should implement AML/CFT controls.

■ Turkey should demonstrate that these sectors are aware of the risks and are subject to adequate oversight.

■ Turkey should avoid excessive regulation that could hinder financial inclusion, particularly in areas where banking services are inadequate or among small businesses and NGOs.

■ A risk-based approach should be specifically tailored rather than a one-size-fits-all approach.

■ Turkish authorities should use quantitative and qualitative data to measure results (e.g., increase in asset confiscations, dismantling of ML networks).

■ Performance indicators aligned with the FATF’s 11 effectiveness criteria should be integrated into national AML/CFT strategies.

What is the FATF?

Established in 1989 by the G7 countries to combat money laundering, the Financial Action Task Force (FATF) has expanded its remit over time to include areas such as terrorist financing and the financing of the proliferation of weapons of mass destruction. Turkey joined the FATF in 1991, and it now has 39 members.

What are the FATF blacklist and gray list? What are the consequences?

The FATF’s “Enhanced Monitoring List,” referred to as the “gray list,” covers countries that have certain deficiencies in combating money laundering and terrorist financing but are cooperating with the FATF to address these deficiencies. In the case of the Blacklist, the FATF may impose various sanctions on these countries and warn financial institutions that will enter into business relationships with these countries not to conduct transactions or to conduct transactions with very strict measures.

The FATF includes countries on the Grey List in a strict monitoring program, unlike other countries. It requests regular reporting and action plans from these countries regarding areas where they are deficient. When the FATF Secretariat reports that the country has addressed its deficiencies and achieved sufficient progress, the country’s removal from the gray list is brought to the agenda and voted on at the next general assembly.

A country’s inclusion on the gray list indicates that its financial system is not fully compliant with the international standards set by the FATF. While this does not directly imply sanctions, it can undermine the confidence of international investors. On the other hand, it may cause a slowdown in foreign capital inflows, additional scrutiny in international banking transactions, and negative impacts on risk assessments by credit rating agencies.

Therefore, being included in the gray list has significant consequences not only for financial institutions but also for the country’s economy and reputation. For this reason, establishing a sustainable culture of compliance and oversight is as important as getting off the gray list and avoiding being placed on it again.

Which countries are on the gray and black lists?

GRAY LIST: Algeria, Angola, Bolivia, Bulgaria, Cameroon, Congo, Haiti, Kenya, Lebanon, Monaco, Namibia, Nepal, South Sudan, Syria, Venezuela, Vietnam, Virgin Islands, Yemen.

BLACK LIST: Myanmar, North Korea, and Iran.

How are the gray and black lists formed?

The FATF has 40 Recommendations that set standards for combating money laundering and terrorist financing, and these are constantly updated. In addition, emerging ML/TF risks, including those related to virtual assets, fintech, and complex corporate structures, are also continuously monitored. Member countries’ implementation effectiveness and legislation are continuously monitored. In this context, countries that do not cooperate and high-risk countries are identified and placed on the Grey List and Black List according to their level.

What do the assessments mean?

The FATF regularly assesses member countries’ systems for combating money laundering and terrorist financing. It measures both the “technical compliance” of countries in 40 areas, i.e., whether their laws and regulations comply with FATF standards, and their “implementation effectiveness” in 11 areas, i.e., how effectively the legislation is implemented, whether interagency coordination and sanctions are working.