During the press conference on 28 June 2024, FATF announced the outcomes of its plenary meeting held on 26-28 June 2024. In the press conference, the FATF evaluated that Türkiye has a satisfactory regulatory framework to take adequate actions against money laundering and terrorist financing and thus removed it from the list of jurisdictions that are subject to increased monitoring (the "grey list"). Türkiye had been in the grey list since October 2021.
What are the potential implications of Türkiye's removal of the grey list?
Türkiye has appeared on the grey list twice since it became a member. Although the FATF does not impose any direct trade or economic sanctions, during the grey-listed periods, Türkiye faced challenges with regard to foreign investment, among other things. It is not possible to clearly predict all of the consequences of Türkiye's removal from the grey list; however, some of the generally positive effects for a country that is delisted from the grey list are as follows:
- Reputational impact: Removal from the grey list indicates a country's commitment to tackling money laundering and terrorist financing. Thus, delisting reduces the risks associated with financial crimes and fosters a greater trust in the country's financial system. Such a positive shift can result in a country being perceived as a more appealing market in the global economy, providing reassurance to potential investors and financial institutions.
- Economic impact: Many international financial institutions and investors consider FATF's grey list before doing business with a country due to the potential sanctions risks. Removal can enhance the country's access to international markets, increase investor confidence and stimulate international trade.
Conclusion
This will certainly have a positive impact on Türkiye's economic strategies as well as its reputation. That said, the shift in international institutions' and foreign investors' approach toward Türkiye hinges on multiple factors, with delisting being just one aspect; yet we see this as a step in a shift towards the positive. We will go on monitoring this situation and its consequences and wanted to update you on this fresh development briefly herein.
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