Follow-up Report & Technical Compliance Re-Rating. The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CTF) standard.
The FATF Plenary adopted the mutual evaluation report (MER) of Türkiye in October 20191. Based on the MER results, Türkiye was placed into enhanced follow-up. Türkiye’s 1st Enhanced Follow-up Report (FUR) with technical compliance re-ratings was adopted in November 20212. Plenary adopted the 2nd enhanced FUR by written process in April 20223.
This 3rd enhanced FUR analyzes Türkiye’s progress in addressing most of the technical compliance deficiencies identified in its MER. Re-ratings are given where progress has been made. Overall, the expectation is that countries will have addressed most, if not all, technical compliance deficiencies by the end of the third year from the adoption of their MER.
This report does not address what progress Türkiye has made to improve its effectiveness. The following experts, supported by Ms. Rana MATAR, Policy analyst from the FATF Secretariat, assessed Türkiye’s request for technical compliance re-ratings:
- Mr. Tiago João Santos e Sousa Lambin, Senior Inspector, Instituto dos Mercados Públicos do Imobiliário from Portugal;
- and Mr. Miguel Balbín Pérez, Technical Counselor, Spanish Treasury from Spain.
The second section of this report summarizes Türkiye’s progress in improving technical compliance, while the following section sets out the conclusion and includes a table showing Türkiye’s MER ratings and updated ratings based on this and previous FURs.
The 4th round MER noted that in Türkiye, NPOs that fall into the FATF definition include associations and foundations.
Compared to foundations, which represent 5% of all NPOs, there is a rather large sector of associations, representing 95% of the entire sector (2019 MER, para. 272).
As set out in the 2019 MER, Türkiye conducted an NRA in 2018, with a component dedicated to NPO risks that considered likely characteristics linked to TF abuse (for instance, NPOs that operate close to conflict zones).
Türkiye identified the subset of organizations falling within FATF’s definition of NPO that are likely to be at risk of TF abuse, NPO’s within humanitarian aid associations operating close to an area on the southern border near conflict zones. Regarding foundations, the risk of abuse for TF purposes was found to be significantly low, taking into account the scale of the sector, the fact that establishment of foundations is subject to strict rules and conditions (such as approval of a competent Court), and the low number of international activities in ratio to the size of the sector.
Overall, Türkiye has made progress in addressing most of the technical compliance deficiencies identified in its MER and has been upgraded to R.8, R.12, R.15, R.22, R.26 and R.28.
July 21, 2023 Published by FATF. (Download PDF Report)