What is the FATF Grey List?
The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 with the mission to standardize AML efforts internationally. One of those standards they issue is known externally as the “Grey List,” or the Jurisdictions under Increased Monitoring list. The jurisdictions on the Grey List have committed to actively working with the FATF to address deficiencies within an agreed upon timeframe to help counter money laundering, terrorist financing, and proliferation financing.
The jurisdictions currently on the Grey List, as of November 2022, include:
Why is the FATF Grey List important?
Investigators and regulators from all over the world put their trust in the FATF organization to standardize elements of anti-money laundering and the Grey List is no exception. The FATF works closely with jurisdictions on the list to ensure progress is made on addressing their AML deficiencies. The organization is also consistently reviewing countries not on the list to ensure the validity of the list.
Working with countries on the Grey List is seen as potentially risky and worthy of closer scrutiny. While the FATF does not explicitly call for enhanced due diligence to be applied to these countries, being “grey-listed” can negatively impact the relationship of the named countries with international funders, including banks and financial institutions, as well as existing and potential overseas investors. Likewise, countries that are removed from the list receive reputational boosts from the international community once the FATF determines that the country has completed its due diligence.
What is the latest news on the FATF Grey List?
Major news on the FATF Grey List is generally when a country is added or removed from the list. In October 2022, the FATF removed Pakistan from the list after four years. The country was originally added to the list due to the proliferation of terror organizations and the organizations that fund them. The FATF announced that “Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total.” The removal of Pakistan from the Grey List will give the country a “clean bill of health” in the eyes of the international community in regards to AML efforts.
In recent years since the start of the COVID-19 pandemic, the FATF has offered some flexibility on deadlines to countries on the list. Since June 2022, the FATF has reviewed the following jurisdictions on their progress: Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Mali, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Turkey, UAE, and Uganda.
How can I more closely monitor jurisdictions on the FATF Grey List?
Whether you’re working for a financial institution looking to meet compliance requirements or a government investigator tracking down illicit actors, information is the key to success with AML.
When investigating transactions from a jurisdiction on the Grey List, public records are critical to uncovering risk.
Sayari Graph utilizes open source records and graph technology to map out connections and establish links between illicit financial actors, their infrastructure, and related business structures and transactions.
Want to see AML and due diligence investigations in action? Watch our Master Class: Data and Graph Analytics for AML and KYC for a real world example of how you can leverage Sayari Graph in your Grey List investigations.