Turkey was singled out by a global financial watchdog over its alleged failure to fight money laundering and the financing of terror, in a significant blow that could see the country's economy lose billions in foreign investment.

The Paris-based Financial Action Task Force (FATF), an inter-governmental organisation that acts as the standard-setter on countering money laundering, maintains a "blacklist" of countries facing isolation from the world financial system since they are not in compliance with regulations, as well as a "grey list" of nations subjected to the less draconian treatment of special monitoring until they comply will all financial security requirements.