FATF Maintains Pressure on Grey List Nations as Global Financial Crime Risks Persist

In its latest review released after the June 2025 plenary, the Financial Action Task Force (FATF) reaffirmed its oversight of jurisdictions under increased monitoring—commonly known as the “grey list”—as part of ongoing efforts to combat money laundering (ML), terrorist financing (TF), and proliferation financing (PF).

Countries placed on the grey list are not subject to sanctions; however, they are required to address strategic deficiencies in their financial crime frameworks within agreed timelines and are subject to enhanced monitoring by the FATF and FATF-style regional bodies (FSRBs). These jurisdictions must implement action plans to improve supervision, financial intelligence, law enforcement coordination, and international cooperation.

No Call for Blanket De-Risking

The FATF reiterated that enhanced due diligence—not broad financial exclusion—is expected from member states and financial institutions dealing with grey-listed countries. The organization emphasized that:

• FATF standards do not support de-risking entire jurisdictions or categories of customers.

• Instead, institutions should apply a risk-based approach, calibrating their controls based on identified risks.

• Humanitarian financial flows and legitimate non-profit or remittance activity must continue uninterrupted.

• Countries must comply with United Nations Security Council Resolution 2761 (2024), which provides humanitarian exemptions to asset freeze measures under UN sanctions regimes.

Progress Reviews and Flexibility

While some jurisdictions face imminent deadlines to meet FATF technical requirements, others are granted flexibility to report progress voluntarily. In this cycle, the FATF reviewed progress from the following countries:

Reviewed since June 2025:

Algeria, Angola, Bulgaria, Burkina Faso, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Kenya, Lao PDR, Monaco, Mozambique, Namibia, Nepal, Nigeria, South Africa, South Sudan, Syria, Venezuela, and Vietnam.

These countries received updated statements based on their progress in strengthening compliance frameworks, improving national risk assessments, and enhancing investigative and supervisory mechanisms.

Deferred Reporting

Five jurisdictions—Bolivia, Haiti, Lebanon, the Virgin Islands (UK), and Yemen—chose to defer their reporting for this cycle. As a result, the FATF has reissued previous statements for these countries, noting that the published information may not reflect their current AML/CFT status.

Growing List of Monitored Jurisdictions

The FATF continues to identify additional countries with strategic deficiencies on an ongoing basis. Several jurisdictions have yet to undergo a full review by either the FATF or their respective FSRBs but are expected to enter the monitoring process in due course.

Global Impact

Grey listing can have significant economic and reputational consequences for affected countries. While not punitive, it signals vulnerability to illicit finance and can:

• Increase scrutiny from banks and investors,

• Raise the cost of cross-border transactions,

• Trigger capital flight and lower investment inflows.

Still, the FATF stressed that the goal of the process is constructive engagement, not financial isolation. The organization welcomed the commitment shown by active jurisdictions and reiterated its support for technical assistance and capacity building where needed.

What Comes Next

The FATF will continue monitoring progress and expects jurisdictions under review to complete action plans swiftly. Focus areas in upcoming reviews will likely include:

• Improving beneficial ownership transparency

• Enhancing financial intelligence capabilities

• Increasing ML/TF investigations and prosecutions

• Risk-based supervision of financial institutions and designated non-financial businesses

• Stronger cross-border cooperation

The next FATF update on jurisdictions under increased monitoring is expected after the organization’s February 2026 plenary.