Istanbul (Turkey) | Jagran News Desk: In a massive setback for Turkish president Recep Tayyip Erdogan, the Financial Action Task Force (FATF) on Thursday 'grey listed' Turkey for failing to head off money laundering and terrorist financing. In a statement, FATF president Marcus Pleyer said that Turkey now needs to address "serious issues of supervision" in its banking and real estate sectors to get out of the 'grey list'.
"Turkey needs to show it is effectively tackling complex money laundering cases and show it is pursuing terrorist financing prosecutions... and prioritising cases of UN-designated terrorist organisations such as ISIL and al Qaeda," he was quoted as saying by Reuters.
What does it mean when a country is placed in FATF's 'grey list'?
When a country is placed in FATF's 'grey list', it means that it has "committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to extra checks". Under the FATF rules, the country would now need to work actively "to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing".
Why Turkey has been placed on the 'grey list'?
Turkey has been placed in FATF's grey list for failing to check terror financing and has been advised by the global body to effectively tackle complex money-laundering cases. The FATF has said that Turkey "needs to implement a truly risk-based approach to NPOs and ensure authorities don't disrupt or discourage legitimate activity".
"The Turkish government has given a high-level political commitment to continue to make necessary changes. I urge them to turn that commitment to concrete action," Pleyer said in a statement.
Notably, Turkey was warned by the FATF in 2019 bout "serious shortcomings" including the need to improve measures to freeze assets linked to terrorism and weapons of mass destruction proliferation.
How will this impact Turkey and what does it mean for India?
FATF is listing Turkey in the 'grey list' is a big win for India as Istanbul in the recent past had openly supported Pakistan and commented over Jammu and Kashmir and other bilateral issues of New Delhi.
"We maintain our stance in favour of solving the ongoing problem in Kashmir for 74 years, through dialogue between the parties and within the framework of relevant United Nations resolutions," president Erdogan had said during his address at the high-level UNGA session this year.
However, getting placed in the FATF's grey list is a heavy blow to Erdogan as the country's economy is fragile and has recorded heavy losses against the US dollar and it will curtail its power to raise international investment.
Earlier this year, the International Monetary Fund (IMF) had found that grey-listing reduces capital inflow by an estimated 7.6 per cent of gross domestic product (GDP), while foreign direct investment (FDI) and portfolio flows are also hit.
Posted By: Aalok Sensharma