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On June 28, 2024, the Financial Action Task Force (FATF) published its updated list of jurisdictions under increased monitoring, commonly referred to as the "greylist".
The bigger picture
FATF plays a pivotal role in the global fight against money laundering, terrorist financing and other related threats to the integrity of the international financial system. This update highlights countries that are actively working with FATF to address strategic deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks.
The latest update added Monaco and Venezuela to the greylist, while Jamaica and Türkiye were removed, signalling improvements in their AML/CTF regimes. These changes reflect the ongoing efforts and challenges faced by countries in aligning with international standards. Understanding the broader context of FATF's greylist is essential as it underscores the dynamic nature of global AML/CTF efforts and the need for continuous monitoring and adaptation to regulatory changes.
How do things change?
The inclusion of new countries on the greylist brings about several changes. For institutions operating in or with these jurisdictions there is a need to reassess and possibly enhance their due diligence measures. Enhanced due diligence (EDD) protocols become paramount to ensure that any business relationships or transactions involving these countries do not pose undue risk.
Moreover, the greylist serves as a warning sign for potential investors and financial institutions about the higher risks associated with the jurisdictions named. This can lead to increased scrutiny and regulatory expectations. For example, firms may need to review their transaction monitoring systems, update their risk assessments and ensure that staff are adequately trained to recognise and respond to the risks posed by these jurisdictions.
Why should you care?
Staying informed about FATF's greylist updates is vital for several reasons. By proactively addressing the risks associated with greylisted countries, organisations can avoid potential disruptions in their operations and maintain the trust of stakeholders, including clients, investors and regulatory bodies.
Additionally, being aware of and responding to these updates demonstrates a commitment to upholding the highest standards of AML/CTF practices. This not only helps in mitigating financial and reputational risks but also contributes to the global effort to combat financial crimes. Leveraging this information to refine and enhance internal controls and procedures is not just a regulatory obligation but a strategic necessity in today's interconnected financial landscape.
