The Financial Action Task Force (FATF) is expected to announce on Friday whether it will remove Turkey from its so-called grey list of jurisdictions that warrant increased monitoring. While Turkey anticipates its removal, such a decision could significantly undermine efforts to curb Ankara’s role as a well-documented hub for terror finance.
In 2021, FATF, which sets global standards for anti-money laundering and countering the financing of terrorism (AML/CFT), added Turkey to its grey list due to Ankara’s continued support of terrorist groups. Yet in February 2024, FATF stated that Ankara had implemented “key reforms” that could lead to Turkey’s removal from the list.
At best, FATF’s analysis is incomplete, focusing primarily on reforms related to Ankara’s adoption of cryptocurrency-related legislation. At worst, it is ignoring the facts. Turkey remains a premier jurisdiction for terrorism financing. Perhaps most egregiously, Ankara provides a safe haven and material and financial support to Hamas, the U.S.-designated terrorist group that perpetrated the October 7 atrocities in southern Israel.
Just one week after the massacre, the U.S. Department of the Treasury sanctioned key enablers of Trend GYO, a Turkish company Treasury also sanctioned a year earlier for generating revenue for Hamas. Similarly, the Turkish government is a shareholder of Kuveyt Turk, a popular Turkish bank that relatives of terror victims are suing in the United States “for aiding and abetting Hamas’s terrorist activity.”
Likewise, Turkey has facilitated the establishment of nongovernmental organizations such as the Association of Jerusalem and Our History, or KUTAD, that support Hamas’s outreach and public relations efforts. Additionally, Turkey has provided intelligence and Turkish passports to Hamas leaders, including Ismail Haniyeh and Saleh al-Arouri.
In related developments, Ankara has also supported Iran-backed Houthi rebels in Yemen, who have repeatedly attacked civilian shipping routes in the Red Sea to express solidarity with Hamas.
On December 28, Treasury designated the Turkish company Al Aman Cargo for financing arms transactions to the Houthis on behalf of Iran’s Islamic Revolutionary Guard Corps (IRGC). This designation included several currency exchange houses in Turkey and Yemen involved in transferring millions of dollars to the Quds Force, the IRGC’s foreign operations arm.
In addition to supporting Hamas and the Houthis, Turkey fuels Russia’s war against Ukraine. In September 2023, the United States sanctioned several Turkish entities for making hundreds of shipments of high-priority components used in Russian drones, missiles, and other military hardware. Senior U.S. officials have consistently asked the Turkish government and associated businesses — in vain — to stop enabling Russia’s invasion of its neighbor.
The United States does not typically comment publicly ahead of potential de-listings, but in light of Turkey’s malign record, Washington should aggressively urge FATF to keep Turkey on the grey list. Increased scrutiny and monitoring of Turkey’s financial institutions are warranted to ensure compliance with international standards on anti-money laundering and terror financing. Turkey must address deficiencies in its financial controls and cooperate in counterterrorism efforts.
Max Meizlish is a senior research analyst for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). Sinan Ciddi is a non-resident senior fellow at FDD, where he contributes to FDD’s Turkey Program and CEFP. For more analysis from Max, Sinan, CEFP, and FDD’s Turkey Program, please subscribe HERE. Follow Max and Sinan on X @maxmeizlish and @SinanCiddi. Follow FDD on X @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.