What is FATF?
The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 to develop and implement international standards to combat money laundering and terrorist financing. The FATF has 39 members, including the United States, Canada, the European Union, and most of the countries of the Organization for Economic Co-operation and Development (OECD).
The FATF maintains two lists of countries that do not comply with international standards for combating financial crimes: the "black list" and the "grey list".
FATF blacklist
The blacklist includes countries that do not take measures at all to combat money laundering and terrorist financing and do not rule to cooperate in this direction.
There are three countries on the FATF blacklist:
- Democratic People's Republic of Korea (DPRK)
- Islamic Republic of Iran
- Republic of the Union of Myanmar
FATF gray list
The gray list, in turn, includes countries that take measures to combat money laundering and terrorist financing, but do not fully meet international standards. Such countries are ready to cooperate and undertake to correct their shortcomings within the prescribed period. The whole time they are on the gray list is accompanied by increased monitoring by the FATF expert group.
There are currently countries on the FATF gray list:
- Bulgaria
- Burkina Faso
- Vietnam
- Haiti
- Democratic Republic of the Congo
- Yemen
- Cameroon
- Small
- Mozambique
- Nigeria
- Senegal
- Syria
- Tanzania
- Turkey
- Philippines
- Croatia
- South Africa
- South Sudan
- Jamaica
- Kenya
- Namibia
These lists are current and we monitor any changes to them. Next update in autumn 2024.
Reasons and consequences of getting on the FATF list
The FATF list includes countries that do not meet FATF standards in all or some of the following areas:
- recognition of money laundering and terrorist financing as crimes
- introduction of criminal liability for financial crimes
- confiscation of proceeds obtained by crime
- mutual assistance between law enforcement agencies
- monitoring of financial institutions
A country's inclusion on the FATF list has serious implications for its economy and financial sector. Countries included in the list may face restrictions on trade and investment, as well as problems with access to the international financial system.
In particular, if a country is included in the FATF black or gray list, FATF member countries can impose sanctions against it, such as:
- Strictly controlled mode of financial transactions with the country.
- Limiting the country's access to the financial systems of other countries.
- Refusal of the country's participation in international agreements and organizations.
FATF sanctions are intended to encourage countries to take measures to combat money laundering and terrorist financing. The FATF list is reviewed twice a year, taking into account what steps countries have taken to improve their legislation in the aspect of combating financial crime.
If your country of business registration or business activity is on the FATF list, we recommend that you consult with lawyers about the consequences this will have for you. Get in touch!
