The Financial Action Task Force (FATF) is calling for the government to increase efforts to counter the financing of terror groups.
In a statement issued last month, the international body, which sets global standards for combatting terrorist financing, said that while Turkey has made improvements it "remains at risk on identifying and freezing terrorist assets, and [Ankara] should improve its implementation of both core requirements."
Officials in Ankara have not responded to the FATF statement and declined SES Türkiye's request for comment. Some analysts said the extent of the shortcomings in anti-terror efforts is not clear.
Faik Oztrak, deputy chairman and economic advisor for the opposition Republican People's Party called it a "disappointing situation" that Turkey has been on FATF's list of high-risk countries since 2011.
"Being a member of the North Atlantic community, and a sometime-EU-aspirant, Turkey's struggle against 'black money' apparently hasn't yet reached the international standards," Oztrak told SES Türkiye. "This is an extremely disappointing situation and such an image does not suit our country."
Having passed a law last year to prevent the financing of terrorism, Turkey avoided the FATF's black list, but it remained on the "high-risk" list, along with countries such as Algeria, Ecuador, Ethiopia, Indonesia, Myanmar, Pakistan, Syria and Yemen.
Oztrak said since Kenya and Tanzania have recently been removed from that list after showing progress in addressing their action plans, Turkey is in a "difficult position to explain to the world why it is still there."
He added that the government "has to take things seriously, if [it] wants to succeed with the enormous projects that it has initiated, such as turning Istanbul into a financial centre."
FATF advised investors to "think twice before diving in Turkey," and called on Ankara to criminalise the act of terrorist financing, establish a legal framework for identifying terrorist assets, confront inadequate monitoring of bank transfers, and freeze the accounts of suspected terrorists.
"The FATF encourages Turkey to address these remaining strategic deficiencies and continue the process of implementing its action plan," the organisation said.
Sadi Erguvenc, a member of the High Advisory Board at the Global Political Trends Centre, said he doubted that the government would ignore the international body.
"Even for a moment that Turkey is not doing what it can to block and seize financial assets of terrorist groups seems inconceivable to me," he told SES Türkiye.
Many local analysts, including Erol Tuncer, head of the executive committee of the Ankara-based Foundation for Societal, Economic, and Political Research, say problems on terror financing are for both "economic and political reasons."
Yusuf Cinar, founder of Strategic Outlook, a Konya-based think tank, agreed that domestic and regional politics are factors.
Cinar said the country's location makes it a crossroads for people and trade, hence Turkey should expect its efforts to combat money laundering and terrorism to remain under intense international scrutiny.
"For years, Turkey has tried to become a modern country in the region, and while opening to the West, develop its co-operation with the East as well," Cinar told SES Türkiye. "As a natural consequence of this, some contradictions have also emerged, such as businessmen from some terror supportive neighbours or from the countries that have connected with the terrorist organisations in the past, expressed their interest in investing in Turkey."
The FATF's assessment is "questioning the country's Western identity," Cinar added, saying that Ankara should clarify whether it can balance its Western-oriented trade with its ties to countries like Iran or organisations like Hamas.
The on-going conflict in Syria presents another problem, Cinar said, as there are claims that part of the Syrian opposition's finances and technical equipment are being supplied via Turkey.
"There are some radical terrorist groups among the Syrian opposition, such as al-Qaeda backed al-Nusra. Any connection with them via Turkey leaves Ankara's economic transparency in a difficult situation," he added.
Cinar said it may be "difficult for Turkey to avoid the terror finance high risk list without a solution of the Syrian problem and establishing a legal framework for identifying terrorist assets."
How should Turkey adjust its counter-terrorism strategies to enhance the fight against terror financing? Share your thoughts in the comments section.
Yusuf Çınar, Analyst, Strategic Outlook
This is retrieved from: http://turkey.setimes.com/en_GB/articles/ses/articles/features/departments/economy/2014/03/17/feature-01