In a controversial move, the intergovernmental Financial Action Task Force removed Turkey from its “grey list” last month despite concerns about Ankara’s involvement in supporting Hamas’s terrorist activities. FATF’s decision highlights the significant gap between achieving technical compliance within the FATF framework and legitimately enforcing robust countermeasures to disrupt terrorist financing.
Turkey was placed on the grey list in 2021 due to significant deficiencies in its anti-money laundering and counter-terrorist financing, or AML/CFT, regime, including inadequate terrorist financing controls and weak enforcement. Now, less than three years later, FATF has deemed Turkey’s progress sufficient for delisting. This decision is a mistake and demands closer scrutiny, especially given the U.S. Department of the Treasury’s consistent identification of Turkey as a hub for Hamas’s financial operations.
Ankara’s historical support for Hamas and the establishment of front companies and pro-Hamas charities within its borders, some of which are now under U.S. sanctions, remain particularly concerning. The U.S. Treasury sanctioned key individuals and companies in Turkey late last year, uncovering a web of financial networks directly linked to Hamas with funds flowing through complex investment portfolios worth hundreds of millions of dollars. These terror-financing linkages are precisely the sort of risks that FATF’s review process is designed to address. However, FATF’s decision to remove Turkey from the grey list appears to be based largely on the passage of certain legislation and not on its half-hearted implementation.
Turkey has a history of engaging in bait-and-switch tactics, enacting legislation only to enforce it selectively. In the early 2000s, the Turkish government passed numerous laws to meet European Union standards but failed to enforce them effectively. Laws intended to strengthen minority rights for Kurds never fully materialized, and Ankara continued to prosecute human rights activists such as Osman Kavala under the auspices of combatting terrorism.
Recognizing Turkey’s selective enforcement of its anti-terrorism statutes, U.S. Treasury officials intensified diplomatic efforts with Ankara following Hamas’s heinous Oct. 7 attack on Israel. Despite these efforts, President Recep Tayyip Erdogan stated unequivocally in March, “No one can make us qualify Hamas as a terrorist organization. Turkey is a country that speaks openly with Hamas leaders and firmly backs them.” Erdogan later revealed the full extent of his support for the terror group, stating plainly in May, “I am following Hamas step by step.”
FATF’s grey list is intended to drive concrete action against illicit finance, with listed countries facing increased due diligence from the global financial sector and potential economic repercussions. By seemingly ignoring Turkey’s open embrace of Hamas, FATF may have relinquished crucial leverage over Turkey and damaged the integrity of the global AML/CFT system.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Ironically, FATF, which promotes transparency as a crucial pillar of global finance, has provided limited information regarding how it accounted for Turkey’s evident support for Hamas terrorism financing in its decision to remove Ankara from the grey list. This lack of transparency in FATF’s decision-making process highlights the urgent need for greater clarity and openness on how such critical decisions are made. The global fight against terrorist financing should hinge on rigorous, transparent, and evidence-based evaluations. FATF must, therefore, adopt a more comprehensive and transparent approach to maintain its credibility and ensure its decisions are based on complete, comprehensive analysis and supporting evidence.
FATF now faces a pivotal moment. It can stand by its decision and risk its credibility, or it can reassess Turkey’s status based on a comprehensive evaluation of its role in facilitating terrorist financing. As groups such as Hamas increasingly turn to sophisticated networks of illicit financing, robust and adaptable AML/CFT frameworks become even more critical. By prioritizing substantive change over technical compliance, FATF can ensure that its actions meaningfully contribute to global security. The stakes are too high for complacency. FATF must reassess its decision, hold Turkey accountable, and bring greater integrity to the global AML/CFT system.
Max Meizlish (@maxmeizlish) is a senior research analyst for the Center on Economic and Financial Power at the Foundation for Defense of Democracies. Sinan Ciddi (@SinanCiddi) is a nonresident senior fellow at the Foundation for Defense of Democracies.
