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Turkish Potential Grey List Removal: What It Means for You

The recent visit by the global financial watchdog to Turkey, as reported by Reuters, signals a critical juncture for those with financial interests in the country. The potential removal of Turkey from the FATF Grey List could significantly streamline due diligence procedures, making it easier to manage and grow your wealth.

Current Due Diligence Challenges

As it stands, Turkey’s designation as a High-risk jurisdiction necessitates Enhanced Due Diligence (EDD) for clients with a connection to the country. This involves an exhaustive analysis of the source of wealth (SoW) and source of funds (SoF), often taking months to complete. Our due diligence process, outlined in Levantine & Co’s Client Due Diligence Guide, highlights the complexity involved:

  1. Risk Categorization: Clients linked to high-risk jurisdictions like Turkey are subject to EDD. This includes detailed scrutiny of their SoW/SoF, necessitating robust documentary evidence to verify the legitimacy of funds and the nature of business activities​.
  2. Verification of Sources: We require extensive documentation for Turkish clients, including tax returns, employment contracts, bank statements, and business registration documents. Each document must be certified by an independent, recognized authority.
  3. Heightened Scrutiny for High-Risk Activities: Businesses operating in sectors such as mining, luxury goods, and unregulated properties face additional checks. Given Turkey’s current high-risk status, these activities are scrutinized to prevent money laundering and other financial crimes​.

Implications of Grey List Removal

Should Turkey be removed from the Grey List, the due diligence process would see a reduction in the documentation required for onboarding Turkish clients, depending on the sector involved. The main changes expected include:

  1. Simplified Due Diligence (SDD): For many clients, the transition from EDD to SDD would significantly reduce the time and resources needed for compliance checks.
  2. Eased Documentation Requirements: Less stringent requirements on the verification of SoW/SoF. Instead of exhaustive documentation, fewer and simpler forms of evidence would suffice, expediting the onboarding process.
  3. Sector-Specific Adjustments: While the overall process would ease, high-risk sectors would still necessitate thorough checks, albeit less cumbersome than the current EDD.

Strategic Benefits for You

This regulatory shift presents several opportunities:

  1. Expedited Client Onboarding: Faster processing times will enhance your experience and satisfaction.
  2. Streamlined Documentation: Simplified due diligence means less paperwork and a quicker, smoother onboarding process.
  3. Focus on Growth: Reduced administrative burdens allow us to focus more on helping you grow and protect your wealth.

Conclusion

The potential removal of Turkey from the Grey List represents a significant development for those with financial interests in the country. By staying ahead of these regulatory changes, Levantine & Co. can streamline its due diligence process, ensuring compliance while enhancing your experience. This proactive approach not only safeguards your wealth but also positions you advantageously in an evolving financial landscape.

Please refer to our comprehensive Client Due Diligence Guide for more detailed insights into our due diligence process and how it safeguards your wealth.

Call to Action

Stay informed with Levantine & Co. as we navigate these changes together. Ensure your financial strategies are aligned with the latest regulatory developments to protect and grow your wealth effectively.


References:

  1. Reuters. “Finance watchdog visited Turkey ahead of Grey List decision, sources say.” Reuters
  2. Levantine & Co. “Client Due Diligence Guide.”​​

Feel free to ask for further refinements or additional data incorporation.

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