Israel Matzav

Turkey struggling to avoid international financial blacklist over money laundering

Turkey, which has become a money laundering capital of the world, is on the verge of being placed on an international blacklist (Hat Tip: Joshua I).

Turkey is scrambling to push through a long-awaited anti-terrorism financing law before a deadline next month to avoid being expelled from an international watchdog and placed on its blacklist alongside Iran and North Korea.

Turkey is already on a "grey list" of countries drawn up by the 36-member Financial Action Task Force (FATF), a money-laundering watchdog, for not implementing the legislation required by its members despite pressing Ankara for years.

The FATF has warned Turkey if it does not pass the necessary legislation, which would allow alleged "terrorist" accounts to be frozen without a court order, by Feb. 22, it will be expelled as a member of the group and blacklisted.

Such a move could restrict foreign activity with Turkish banks, hamper Turkey's ability to raise funds abroad and could affect its credit rating, which received a boost last year when Fitch raised the country to investment grade.

"Potentially, this would be a crippling blow to Turkish banks as they look to be more international in outlook, and have been active in seeking to finance themselves increasingly offshore in recent months," said Timothy Ash at Standard Bank.

On Friday, a parliamentary commission passed the draft bill, which has been stalled since 2011, after two days of debates. Despite strong resistance from the country's main opposition party, Turkish officials have voiced confidence that the legislation would be adopted by next month's deadline.

Part of the reason the bill has been held up is Turkey's existing terrorism legislation. Opposition lawmakers fear the law could be used to wrongly label people as terrorists.

Turkey has one of the highest arrest rates in the world for terrorism charges and faces increasing criticism from the United Nations and rights groups over what they see as poorly-defined and broad-based laws which are regularly abused.

The biggest problem with Turkey is not what is going on illegally, but rather what is going on legally, like its trading gold for oil with Iran.

Read the whole thing.

Labels: money laundering, Turkey

posted by Carl in Jerusalem @ 8:35 AM