The global money laundering watchdog FATF placed Turkey under surveillance Thursday for shortcomings in combating money laundering and terrorism financing.
"Serious issues remain" in Turkey's controls over financial operations, FATF head Marcus Pleyer said at a press conference.
The body placed Turkey on its grey list of countries under increased monitoring due to strategic deficiencies in their regimes to combat money laundering and terrorist financing.
Pleyer said the Turkish government made a commitment to continue its efforts to improve its anti-money laundering system.
"I urge them to turn this commitment into action," he added.
Nevertheless, the FATF recognised that Turkey had made progress in a number of areas, including laying out a national strategy to combat money laundering and the financing of terrorism and increased seizures of cash being smuggled across.
A FATF document indicated that Turkey plans to boost resources to conduct more investigations and increase penalties for unregistered money transfer services.
There are now 39 nations on FATF's grey list, which can have a serious impact upon foreign investment into countries and their international reputation.
The decision comes as Turkey is already in the midst of an economic crisis that has seen its currency slide and inflation hit nearly 20 percent.
In addition to Turkey, Jordan and Mali were added to the grey list.
Meanwhile, Botswana and Mauritius were removed.