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.