An intergovernmental organization that monitors terrorist financing trends and global money laundering is The Financial Action Task Force (FATF). It collaborates with the member states and regional organizations to make a regulatory and legal structure to fight with these threats. You can find the detailed explanation of FATF, FATF black and grey list in this article.

What is Financial Action Task Force (FATF)?

FATF, The Financial Action Task Force is founded in 1949. It is an intergovernmental organization. Its aim is to combat with threats like money laundering and terrorist financing universally. The FATF evaluates member and non-member jurisdictions, keeps a black and grey list for the countries that are not have high risk and provides advice on how to improve national AML and CFT systems. The recommendations that FATF serves as a reference for financial institutions and government to work together efficiently to protect the global financial system.

What is the Updated FATF Black List?

The FATF Black List is a collection of countries that are considered non-cooperating in global AML and anti-terrorist financing efforts. It is published in FATF reports regularly. Aims of these reports is to encourage countries to comply with global AML/ anti-terrorist financing standards and improve their regulatory frameworks.

When a country is blacklisted by FATF, it faces economic problems and other restrictives from FATF members as well as other international organizations. For example, in October 2023 the FATF blacklisted North Korea, Iran and Myanmar for serious deficiencies in their AML and anti-terrorist financing regimes. As a result of this, the FATF advises caution in doing business with entities in those jurisdictions and outlines steps for taking out Iran from Black List.

The FATF does not have investigative powers. But it closely tracks global AML and CFT efforts. FATF knows that some of the blacklisted countries face challenges in adhering to its standards. In some views, the term non-cooperation is using to describe the blacklisted countries. But it may not be the right definition for the situation. There are also some critics against this view.

What is the Updated FATF Grey List?

The FATF’s Grey List, in other words ‘’Jurisdiction Under Increased Monitoring’’ , is made up countries that have deficiencies in their AML and CFT systems. FATF grey lists are developed in 2000 and updated regularly. These lists are subject to increased examination and cooperation with FATF style regional bodies. These bodies also called as FSRBs. FATF assesses countries progress against the grey list. While the grey list isn’t as restrictive as a black list, it can cause economic sanctions by institutions like IMF and World Bank. The grey list is constantly updates with the countries being removed or added. By October 2023, the grey list includes following countries:

• Barbados
• Burkina Faso
• Bulgaria
• Cameroon
• Croatia
• Democratic Republic of Congo
• Jamaica
• Haiti
• Malta
• Mali
• Mozambique
• Nigeria
• Philippines
• Senegal
• South Sudan
• South Africa
• Syria
• Tanzania
• Turkey
• Uganda
• United Arab Emirates
• Vietnam
• Yemen