The Financial Action Task Force (FATF), an international organisation that monitors money laundering and terrorism financing activities, added Turkey, Jordan, and Mali to its grey list on Thursday. While Mauritius and Botswana were removed from the list, Pakistan retained its position, as the group was not convinced of Islamabad’s actions against terror financing.
According to the FATF, when a country is placed on the grey list, “it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.” Being put on the list can scare away investors and creditors, hurt exports, and make global banks cautious of doing business with the country.
Turkey, the largest economy to be added to the list on Thursday, has been accused of not taking enough action to combat money laundering and lacking supervisory mechanisms in its economy. FATF President Marcus Pleyer said Turkey needs to address “serious issues of supervision” in its banking and real estate sectors. He also called on Ankara to effectively monitor the activities of gold and precious stone dealers.
Pleyer added that Turkey needs to show that it is seriously “pursuing terrorist financing prosecutions [and] prioritising cases of UN-designated terrorist organisations” such as the Islamic State and Al Qaeda.
Turkey called the move “an undeserved outcome” but vowed to “take necessary measures in cooperation with the FATF.” The Turkish Treasury said it will comply with the watchdog “to ensure that our country is removed from this list, which it does not deserve, as soon as possible.”
The FATF also added Jordan and Mali to its grey list, citing concerns over terrorism financing and money laundering.
It kept Pakistan on the list, saying that Islamabad’s actions to counter terrorism financing have not been satisfactory. “Pakistan has taken a number of important steps, but needs to further demonstrate that investigations and prosecutions are being pursued against the senior leadership of UN-designated terror groups,” Pleyer said.
Pakistan has been on the FATF’s grey list since 2018 and had outlined an action plan the same year to combat terrorism financing and money laundering. However, the FATF has said Pakistan has not addressed all items in the plan nor has it completely implemented the guidelines set by the watchdog.
Meanwhile, Botswana and Mauritius were removed from the grey list for their “significant progress” in addressing the FATF’s concerns.
The FATF was founded in 1989 as part of a G7 initiative to combat money laundering and later included terrorism financing within its ambit. It has listed 23 countries in its grey list, including Morocco, Syria, South Sudan, and Yemen. Additionally, the FATF maintains a blacklist of “high-risk jurisdictions” and non-cooperative countries. Currently, only Iran and North Korea are blacklisted by the FATF.