Fowl play

What do you call a turkey that steps back from the precipice?  A wise old bird, that’s what. Long story short, at the October 2012 meeting of the Financial Action Task Force, a statement was issued about Turkey and its refusal to criminalise terrorist financing: “The third mutual evaluation report assessing Turkey’s compliance with the FATF Recommendations was adopted in February 2007…. [but] over five years after the adoption of the evaluation report and despite the close and constant monitoring and a series of graduated measures taken by the FATF, no remedial action has been taken to improve Turkey’s counter terrorist financing regime.”  Looking back at that evaluation report, the problem was this: “[Turkey’s] terrorist financing offence only applies in relation to terrorism against Turkey and its interests and it only applies to funding for the commission or attempted commission of specific terrorist acts…. [which means that] Turkey does not have a mechanism that will permit it to freeze the assets of persons designated [as terrorists] by other jurisdictions”.  Turkey was told that if it did not put the hen-house in order by the next FATF plenary on 22 February 2013, it would be expelled from the FATF.

Professor Güven Sak, a noted Turkish economist and founder of their Economic Policy Research Institute (TEPAV), wrote a short article in which he ventured an explanation for Turkish reluctance to oblige: “Turkey has not yet found a definition of terrorism that includes the PKK [the outlawed Kurdistan Workers’ Party], while excluding Hamas”.  He also warned that expulsion from the FATF would have dire economic consequences for his country.  And so thankfully, on 15 February 2013, as the FATF bigwigs were packing their bags for Paris, the Turkish government signed in the Law on the Prevention of the Financing of Terrorism, which addresses many of the shortcomings around terrorist financing as well as creating a legal basis for freezing terrorist assets.  A week later, the FATF said that they were reasonably happy but want to see Turkey making good on its promises to improve, demanding a progress report in June.

Many people criticise the FATF, saying – with some justification – that it spends too much time finger-wagging at jurisdictions that are trying against the odds to improve, while ignoring larger transgressions by countries such as the US and the UK.  But it is encouraging to see that it can be a force for good, and that its stamp of approval still matters.  Without the carrot of FATF membership to encourage it, Turkey’s goose would be cooked, its AML status a political hot potato, equivalence problems sprouting everywhere – in short, it would be stuffed.


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2 Responses to Fowl play

  1. Paul Coleman says:

    Hello Susan,

    Interesting and on first reading I thought I had stumbled upon something. FATF make recommendations but if you don’t comply you are thown out from FATF membership – with potentially disatrous results. So far so good but not really – a look at the members on the FATF website suggests that Turkey will always be a likely candidate for such threats. But how many others…..? Another connotation on the “too big to” – Too big to be thrown out of FATF.

    So somewhat cynically, using your examples, the US and UK will never face that sort of threat from FATF.



  2. Hello Paul
    I fear that you are right, but at least experienced MLROs know to season the FATF’s lists with their own understanding of real life – and to differentiate between “paper compliance” (i.e. we’ve got the laws) and “real compliance” (i.e. we implement them properly).
    Best wishes from Susan

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