FATF Places Turkey in Enhanced Follow-Up After 2026 AML/CFT Mutual Evaluation

The Financial Action Task Force (FATF) has published its 2026 Mutual Evaluation Report on Türkiye, finding that the country has strengthened its defences against money laundering, terrorist financing and proliferation financing, while identifying a number of areas requiring further improvement. The assessment examined Türkiye’s AML/CFT/CPF framework and its effectiveness based on the situation at the time of the FATF’s on-site visit in November 2025.

The evaluation found that Türkiye has improved its use of financial intelligence and international cooperation in pursuing money laundering, terrorist financing and predicate offences. At the same time, the FATF identified the need for greater prioritisation of money laundering investigations and prosecutions involving certain high-risk predicate offences, together with stronger capabilities to identify, trace and recover criminal assets located outside the country.

Türkiye received substantial effectiveness ratings for understanding and assessing risks and for international cooperation, as well as for the work of its financial intelligence unit. The remaining immediate outcomes were rated at a moderate level of effectiveness. These included supervision and preventive measures, transparency and beneficial ownership, money laundering investigations and prosecutions, asset recovery, and measures addressing terrorist and proliferation financing.

The FATF found that Türkiye has a broad understanding of its money laundering and terrorist financing risks, supported by its national risk assessment process and Threat and Vulnerability Working Groups. However, the assessment identified a need for a deeper understanding of cross-border risks, particularly those involving trade and smuggling. The FATF also called for better monitoring of the results achieved through the country’s AML/CFT strategy.

Domestic cooperation was assessed as strong. The FATF found frequent and positive interaction between the Financial Intelligence Unit, MASAK, law enforcement agencies and other competent authorities. International cooperation was also assessed positively, with Türkiye making use of mutual legal assistance, extradition, FIU exchanges, police-to-police cooperation, liaison officers and joint investigations. The FATF nevertheless identified shortcomings concerning the timeliness of cooperation, follow-up and the consistent pursuit of cross-border asset recovery.

The report found that Türkiye has established a comprehensive licensing framework covering financial institutions and designated non-financial businesses and professions (DNFBPs). A regulatory framework for virtual asset service providers was also being implemented at the time of the on-site assessment. Financial institutions and virtual asset service providers are supervised using a risk-based approach, with a significant increase in AML/CFT compliance supervision, including both off-site and on-site activity, particularly in relation to higher-risk entities.

The FATF found that supervisors generally understand money laundering and terrorist financing risks, although sectoral supervisors have a less developed understanding of underlying risks in some areas. This was identified as a factor that could affect the effectiveness of AML/CFT supervision.

Financial institutions and virtual asset service providers generally demonstrated a strong understanding of money laundering risks and their AML/CFT obligations, but deficiencies remained in implementation. The FATF specifically identified weaknesses in the identification and monitoring of politically exposed persons and continuing shortcomings in suspicious transaction reporting. Low levels of terrorist-financing suspicious transaction reports in several higher-risk sectors were also identified as an indication of constraints in detecting and reporting terrorist-financing activity relative to the risks faced.

Supervision of DNFBPs follows a risk-based model. High-risk entities in sectors such as dealers in precious metals and stones, real estate agencies and accountants are supervised annually, while medium-risk entities are supervised at least once every three years. The FATF found that supervision of lawyers and notaries was considerably less frequent and was not sufficiently aligned with the risks presented by some entities in those sectors.

Beneficial ownership was another area in which the FATF identified further work. Türkiye has established a multi-layered framework for beneficial ownership transparency, including controls concerning legal persons, bearer shares, associations and foundations. However, the assessment found that substantial improvements were necessary to ensure that basic and beneficial ownership information is consistently accurate and up to date. More systematic and risk-based verification was identified as necessary.

The FATF also found that Türkiye's understanding of money laundering and terrorist financing risks associated with domestic legal persons is generally developed, but that understanding is less advanced in relation to foreign-created legal persons with sufficient links to Türkiye and foreign legal arrangements. Competent authorities generally have timely access to ownership information, although the use of the full range of available information sources was considered uneven, with significant reliance on core registries.

MASAK was assessed as playing a central and effective role in receiving, analysing and disseminating financial intelligence. Its direct access to more than 300 databases provides a broad information base for intelligence supporting investigations into money laundering, predicate offences and terrorist financing. The FATF found that MASAK can identify and trace complex money laundering and terrorist financing schemes, including criminal networks and their financiers. Some delays in the production of financial intelligence reports were nevertheless identified.

Türkiye has also demonstrated the capacity to conduct complex money laundering investigations. Specialised public prosecutors lead such investigations with support from law enforcement and MASAK, while domestic and international cooperation has been used to disrupt money laundering networks. The FATF noted that Türkiye has investigated, prosecuted and convicted a substantial number of money laundering and predicate offences, with more than 10,000 prosecutions recorded.

The assessment nevertheless identified gaps in the prioritisation of certain higher-risk areas beyond fraud. These include professional money laundering, misuse of legal persons and cross-border movements of criminal proceeds. The report also identified a backlog of 7,248 pending money laundering prosecutions and 6,085 pending convictions. The effectiveness of sanctions imposed on legal persons was also identified as an area requiring attention.

Asset recovery remains another area requiring further development. Türkiye has made asset recovery a national and operational priority and has mechanisms allowing authorities to identify and trace criminal property and property of corresponding value. The FATF found that Türkiye has made substantial use of asset freezing as a preventive measure, but that the number of assets ultimately seized and confiscated remains modest. Difficulties in tracing and recovering assets located abroad were identified as a significant weakness.

The FATF also assessed Türkiye's response to terrorist financing risks. Authorities have developed and implemented extensive counter-terrorist-financing policies and operational mechanisms, and the country has strong institutional capabilities for identifying and investigating terrorist financing involving organisations identified through its national risk assessment. However, the assessment found challenges in identifying terrorist-financing activity involving other organisations and networks identified through international sources and cooperation channels.

Targeted financial sanctions related to terrorist financing are implemented without delay in some circumstances, but not systematically. Türkiye has used its terrorist-financing targeted financial sanctions framework extensively to address identified risks, including by targeting assets linked to individuals and entities associated with UN-designated terrorist organisations. Financial institutions and virtual asset service providers generally understand their obligations in this area, while awareness and compliance among DNFBPs are less developed.

The FATF found that Türkiye generally understands proliferation-financing risks, but that risks arising from possible sanctions evasion through the misuse of legal persons, including foreign legal persons, are less well understood. This was identified as a potential constraint on the country's ability to deter proliferation-financing risks.

The report assigns Türkiye a number of technical-compliance ratings. The country was rated compliant with Recommendations 1, 2, 9, 11, 12, 13, 14, 17, 20, 21, 26, 29, 30, 37 and 39. It was rated largely compliant with Recommendations 3, 4, 5, 6, 10, 15, 16, 18, 19, 22, 23, 24, 25, 27, 28, 31, 32, 33, 34, 35, 36, 38 and 40. Recommendations 7 and 8, concerning proliferation-financing targeted financial sanctions and non-profit organisations respectively, received partially compliant ratings.

The effectiveness assessment resulted in substantial ratings for risk understanding and international cooperation, and for financial intelligence. The other eight immediate outcomes received moderate ratings. The FATF's effectiveness framework therefore records substantial effectiveness for Immediate Outcomes 1, 2 and 6, with moderate effectiveness for Immediate Outcomes 3, 4, 5, 7, 8, 9, 10 and 11.

Following the assessment, Türkiye was given a three-year roadmap of key recommended actions. Among the priorities are improving reporting entities' understanding of terrorist-financing risks and related mitigation measures, increasing the prioritisation of money laundering investigations and prosecutions involving high-risk predicate offences such as drug trafficking, smuggling and illegal betting, and strengthening the identification, investigation, prosecution and conviction of terrorist-financing activity across the full range of threats identified in Türkiye's current risk profile.

The FATF has placed Türkiye in enhanced follow-up. Türkiye will therefore report back to the FATF on the progress it makes in addressing the deficiencies identified through the 2026 mutual evaluation.

The 2026 assessment represents a comprehensive review of Türkiye's AML/CFT/CPF framework against both technical requirements and effectiveness outcomes. The report records improvements in financial intelligence, international cooperation, risk-based supervision and complex money laundering investigations, while identifying continuing work in areas including high-risk money laundering prosecutions, beneficial ownership verification, DNFBP supervision, asset recovery, terrorist-financing detection and targeted financial sanctions implementation.

By fLEXI tEAM