Turkey (Brussels Morning) In the early hours of November 1, 2023, Istanbul witnessed the high-profile detention of Dilan Polat, a social media influencer with 6.8 million followers. The arrest, part of a larger crackdown involving her family, has sent ripples far beyond the realms of Turkey’s influencer culture, touching upon the intricate and often opaque corridors of financial regulation and civil liberties.
Polat, along with her husband, sister, father-in-law, and others, faces accusations ranging from tax evasion to money laundering. Allegedly, these activities were conducted under the guise of a cosmetics business, leveraging social media’s immense reach. The case, conducted by Turkey’s Anti-Financial Crimes police, draws attention not just for its celebrity element but for its alleged connections to more systemic issues within Turkey’s financial system.
This incident unfolds against the backdrop of Turkey’s tenuous position on the Financial Action Task Force’s (FATF) Grey List – a catalog of countries under close surveillance for deficiencies in combating money laundering and terrorist financing. As Turkey strives to remove itself from this list, the high-profile nature of Polat’s case acquires additional significance. It emerges as a litmus test for Turkey’s commitment to reforming its financial oversight mechanisms, a commitment vocally championed by Finance Minister Mehmet Şimşek.
How is a celebrity’s money laundering case linked to Turkish civil society organizations?
Turkey is grappling with a severe currency crisis and unofficial sources indicate inflation rates soaring above 100%, which has significantly undermined societal morale. Despite this, Erdoğan succeeded in the recent general and presidential elections, investing substantial effort to bring former economic minister Mehmet Şimşek back into office. Şimşek agreed to take up the post on the condition that he could implement sensible economic policies and measures based on established economic principles, with Erdoğan’s approval.
These political and economic shifts in Turkey, particularly post-election, have refocused the spotlight on the country’s economic quandaries. Being on the FATF’s Grey List has now emerged as a formidable barrier to economic recovery. The new administration’s strategy appears to pivot from using financial regulations as tools of suppression to efforts in rooting out financial malfeasance among politically exposed persons (PEPs).
Turkey’s place on the FATF Grey List has a lot to do with not keeping a close enough watch on the wealthy PEPs. Law No. 7262 was supposed to prevent money crimes, but it ended up making things harder to function and even exist for civil society organizations. This law has been called too broad and easy to misuse, leading to more checks on these groups, particularly those that don’t agree with the government.
Although people were worried that this law would be used to harshly crack down on civil society organizations, that hasn’t happened as much as we feared. It’s true that the government has used the law to keep a tighter hold on civil society organizations, but the extreme actions we were afraid of haven’t been seen. Turkish civic society organizations and their partners should get credit for their efforts to protest these regulations and highlight the potential for governmental abuse, making sure that the FAFT is aware of the risks of exploitation. However, the Turkish government’s infrequent use of these regulations on civil organizations was not a response to these protests but rather a strategy to be removed from the grey list. Nevertheless, Turkey’s civic society organizations indirectly deserve recognition for their dedication.
On the other hand, these rules ended up causing big trouble for another group, social media influencers. Over the last three years, the Interior Ministry and local authorities have been frequently auditing civil society organizations for money laundering under the FAFT’s new guidelines. While these organizations must declare all their funding and administrative changes regularly to the Ministry of Interior, real money laundering has been unfolding on Instagram by non-political figures, with the support of those who pushed for tough FAFT rules on NGOs.
While Dilan Polat’s case is ongoing, it’s clear that there’s tax evasion and money laundering involving phony invoices and receipts. The police are still figuring out whose money is being laundered. This high-profile case has also caused fear among other influencers on TikTok and Instagram, leading some to shut down their accounts or stop their business activities of selling goods and services and keep a low profile. Public opinion is still unsure whether these case-by-case investigations will pursue higher in the scheme, yet it is safe to assume that Polat and any other public figures who may be involved in this big picture are just the tip of the iceberg.