FATF Adds Three Countries to Grey List, Removes Two

Regulatory Update – December 11, 2024

The Financial Action Task Force (FATF) concluded its December plenary session with significant updates to its list of jurisdictions under increased monitoring (the “grey list”).

New Grey List Additions

Three countries have been added to the grey list due to strategic AML/CFT deficiencies:

Country A

• Inadequate beneficial ownership transparency framework
• Weak supervision of designated non-financial businesses and professions
• Insufficient implementation of targeted financial sanctions

Country B

• Limited effectiveness in investigating and prosecuting money laundering
• Gaps in customer due diligence requirements for financial institutions
• Inadequate regulation of virtual asset service providers

Country C

• Deficiencies in terrorist financing risk assessment and mitigation
• Weak cross-border currency controls
• Insufficient international cooperation mechanisms

Removed from Grey List

Two jurisdictions have successfully addressed their strategic deficiencies and been removed:

Country X

Completed comprehensive reforms including:

• Established centralized beneficial ownership registry
• Enhanced supervision of money service businesses
• Improved SAR quality and analysis capabilities

Country Y

Demonstrated substantial progress through:

• Strengthened legal framework for asset confiscation
• Increased resources for financial intelligence unit
• Enhanced international cooperation agreements

Impact on Financial Institutions

Financial institutions should immediately:

1. Update risk assessments – Incorporate new grey list jurisdictions into country risk ratings
2. Review customer base – Identify customers with nexus to newly listed countries
3. Enhance due diligence – Apply EDD to transactions involving grey list jurisdictions
4. Update screening rules – Adjust transaction monitoring scenarios for geographic risk
5. Train staff – Brief teams on updated country risk profiles

FATF’s Statement

FATF President Raja Kumar noted: “These decisions reflect our ongoing commitment to identifying and addressing money laundering and terrorist financing risks globally. We commend Countries X and Y for their substantial progress and encourage newly listed jurisdictions to work closely with FATF to address identified deficiencies.”

Next Steps

The newly grey-listed countries have committed to developing action plans with FATF to address deficiencies within 12-18 months. Progress will be reviewed at the June 2025 plenary.

Download our updated country risk assessment matrix incorporating these FATF changes. Access here.