Turkey is taking significant steps to enhance its stance against money laundering and terrorist financing by introducing new legislation on crypto-assets. The country’s Finance Minister, Mehmet Simsek, recently addressed a parliamentary commission, highlighting the government’s commitment to comply with international standards set by the Financial Action Task Force (FATF). The aim is to elevate Turkey’s status from the FATF’s “grey list,” which signifies insufficiency in preventive actions against financial malpractices.
Turkey was placed on the FATF grey list in 2021 due to strategic deficiencies in its regimes to counter money laundering, terrorist financing, and proliferation financing. Being on the grey list subjects a jurisdiction to increased monitoring by the international community. To address this, Turkey needs to demonstrate its resolve to rectify the identified inadequacies, particularly in relation to freezing assets connected to terrorism or the proliferation of weapons of mass destruction.
During his address, Finance Minister Simsek emphasized that Turkey has been compliant with 39 out of the 40 standards established by the FATF. The only remaining issue pertains to the regulation of crypto-assets. Simsek announced that the government would submit a law proposal on crypto-assets to the parliament in the near future. By addressing this gap in regulatory measures, Turkey aims to eliminate any reason for its continued presence on the FATF grey list, provided there are no competing political considerations.
While the specifics of the forthcoming legal changes have not been disclosed, Simsek’s statements indicate the government’s commitment to strengthening the oversight of crypto-assets. The introduction of new legislation is expected to introduce measures and regulations aimed at combating money laundering and terrorist financing associated with crypto-assets.
The FATF, established by the G7 group of leading global economies, plays a critical role in safeguarding the international financial system. Its evaluation of Turkey’s financial systems in 2019 revealed “serious shortcomings” that needed to be addressed. As Turkey works towards rectifying these deficiencies, the world will closely monitor the country’s actions and assess its potential exit from the FATF grey list.
Turkey’s commitment to strengthening its financial systems and bolstering its anti-money laundering and counter-terrorism financing measures is of great significance. Enhancing regulatory frameworks around crypto-assets is particularly vital in the current digital age, where illicit financial activities can be conducted using decentralized virtual currencies. By addressing the gaps in its regulatory system, Turkey aims to protect its financial industry, foster international cooperation, and safeguard against illicit activities.
Turkey’s move to introduce new legislation on crypto-assets demonstrates its determination to combat money laundering and terrorist financing effectively. By aligning its regulatory frameworks with international standards, Turkey aims to improve its standing with the FATF and enhance its reputation as a responsible global player. With the world closely monitoring its actions, Turkey has an opportunity to showcase its commitment to combating financial crimes and reinforcing the integrity of its financial systems.