FATF puts Turkey on 'grey list'; Pakistan to remain on 'grey list'

October 22, 2021
A videograb of FATF President Dr. Marcus Pleyer.
A videograb of FATF President Dr. Marcus Pleyer.

PARIS — The Financial Action Task Force (FATF) on Thursday placed Turkey on the "grey list" over money laundering and terrorist financing. FATF also said Pakistan would remain on the "grey list".

This means increased monitoring on money laundering, terror financing and proliferation financing for these countries.

The announcements were made by FATF President Dr. Marcus Pleyer in a virtual press conference from Paris, at the end of FATF’s October plenary. The plenary is the highest decision-making body of the Paris-based terror-financing watchdog, and meets three times a year — in February, June and October.

The financial body said the Pakistan government has the "34-point action plan of which 30 items have been addressed" while adding the "most recent action plan which was in June this year focused on money laundering".

The global financial watchdog said there were "serious issues" over Turkey's financial operation as it failed to combat money laundering and terror financing. The watchdog said Turkey had agreed on an action plan with the FATF.

The financial watchdog had put Turkey on notice two years as it had found “serious shortcomings". The move is set to hit President Erdogan's attempt to attract foreign investment in the country amid a bleak economic situation.

FATF's president announced that Mauritius and Botswana have been removed from the list while declaring that APG, EAG and global network "will closely monitor the situation in Afghanistan, including any changes to money laundering and terrorist financing risks in the country."

The financial body expressed "concern" over the evolving money laundering and terrorist financing risk in Afghanistan. "We affirm recent UNSC resolutions on situation in Afghanistan and demand that the country not be used to plan or finance terrorist acts," Pleyer said.

The FATF also expressed “its concern about the current and evolving money laundering and terrorist financing risk environment” in Taliban-controlled Afghanistan.

On Pakistan continuing to remain on the grey list, Pleyer said “there is no discussion of blacklisting” since it has already completed 30 out of the 34 action items that were given by the FATF earlier.

However, Pleyer said Pakistan has to “demonstrate” that it has taken action and effectively prosecuted UN-designated terrorists, after being repeatedly asked by the FATF to take action on terror outfits such as Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM).

According to the plenary’s report on Pakistan, the country has been asked to provide evidence that it “actively seeks to enhance the impact of sanctions beyond its jurisdiction by nominating additional individuals and entities for designation at the UN”.

On Turkey being put on the grey list, Pleyer said the country has made a “high-level political commitment to work with the FATF to strengthen the effectiveness of its anti-money laundering and countering the financing of terrorism mechanism”.

Pleyer also said a greater focus will be put by the FATF in monitoring “Turkey’s oversight of the NPO sector”, which refers to non-profit organizations, including their foreign branches. “Turkey is urged to apply the risk-based approach to supervision of NPOs in line with the FATF standards,” Pleyer said.

Reacting to the development, the Pakistan government's point man on the FATF — Energy Minister Hammad Azhar — said there was "good news".

"For the money laundering action plan: Within one cycle, four out of seven items addressed. A progress unprecedented in FATF history.

"For the terror financing action plan: 26 out of 27 items already complete. Majority of the countries believe that we have completed the action plan," the minister said.

He said that now only "some countries" did not agree with the majority on the progress made by Pakistan on the terror financing action plan. "We are getting closer to consensus numbers in spite of 'challenges'. Our technical stance will be vindicated soon," he concluded. — Agencies

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