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Current Affairs

Turkey in global terror finance watchdog list

Date: 25 October 2021 Tags: Miscellaneous

Issue

Global terror finance watchdog Financial Action Task Force (FATF) has added Turkey along with Jordan and Mali to its ‘grey list’.

 

Background

The expansion of list under body comes after its annual plenary held in Paris. Plenaries are held thrice in a presidential cycle.

 

Details

The goal of FATF is to set standards and promote effective implementation of operational measures for combating money laundering, terrorist financing and other threats to the integrity of the international financial system.

 

The grey list

The grey list is also known as “jurisdictions under increased monitoring”. Countries under this list will have to swiftly resolve deficiencies within agreed timeframes and is subject to extra checks.

 

Grey list jurisdictions

  • The list hosts 23 countries. The most important country on the list is Pakistan, which has been on the list since many years.

  • Other important countries include Turkey and Myanmar. The presence on the list indicates that the country has failed to prevent international money laundering and terrorist financing.

 

The updated list

Botswana and Mauritius have been removed from the Grey list. The decision was made after an on-site investigation showed that these countries had made remarkable progress on their reform commitment.

 

Turkey’s presence

  • The main reason for presence was issues regarding its banking and real estate sectors, and with gold and precious stones dealers.

  • FATF had previously warned Turkey about “serious shortcomings” regarding measures to freeze assets linked to terrorism and weapons of mass destruction proliferation.

 

Implications of grey list

  • Grey listing will have negative impact between countries and international funders including banks and financial institutions. Investors also take note of FATF rankings before investing.

  • Reports have shown that Grey listing will reduce capital inflow by an estimated 7.6% of gross domestic product (GDP).