FATF’s Grey List: Compliance and Impact

Oct 20, 2023

Grey listing, a term commonly associated with the Financial Action Task Force (FATF), is a significant aspect of global efforts to combat money laundering and terrorist financing.


Understanding Grey Listing

Grey listing, in the context of international finance and anti-money laundering (AML) efforts, refers to a situation where a country is placed on a list of jurisdictions that are considered non-compliant with international standards in countering money laundering and terrorist financing. These lists are often created and maintained by organisations such as the FATF.

Grey listing is not as severe as being placed on a blacklist but is a cause for concern. Countries on the grey list are seen as having deficiencies in their AML/CFT (Countering the Financing of Terrorism) frameworks and are urged to take corrective actions to address these shortcomings. The purpose of grey listing is not only to identify non-compliant jurisdictions, but also to encourage them to improve their financial systems and adhere to international standards.



Financial Action Task Force (FATF)

The Financial Action Task Force (FATF) is an intergovernmental organisation established in 1989 with the primary objective of setting global standards and promoting effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.


Key Functions of the FATF:

Setting Standards: The FATF has developed a set of recommendations known as the “FATF Recommendations” or the “40 Recommendations.” These standards provide a comprehensive framework for anti-money laundering and counter-terrorist financing measures and cover areas such as customer due diligence, reporting of suspicious transactions, and the confiscation of proceeds from money laundering.



Mutual Evaluations: The FATF conducts mutual evaluations of its member and non-member countries to assess the effectiveness of their AML/CFT systems. These evaluations help identify weaknesses and areas for improvement.

Grey Listing: The FATF maintains a list of countries that are categorized as high-risk or non-compliant. This list is a vital tool for encouraging countries to take necessary actions to strengthen their AML/CFT frameworks.

Promoting Global Cooperation: The FATF promotes international cooperation in combating money laundering and terrorist financing. It works closely with other organizations, governments, and stakeholders to share information and best practices.


A lot of countries are currently monitored by FATF (2023) but In recent years, several countries, including Cambodia, Morocco, Malta, Pakistan, Nicaragua, Tanzania, and Congo, have successfully been removed from the grey list.

Two years ago, Malta was added to the list, becoming the first EU country to be greylisted by the FATF. However, a year later Malta was removed from the list after implementing an action plan agreed with the international organisation.

In conclusion, grey listing remains a crucial tool in the ongoing battle against money laundering and terrorist financing. While not as severe as blacklisting, it serves as a strong signal to countries to enhance their AML/CFT frameworks and align with international standards. The efforts of organisations like the Financial Action Task Force are instrumental in promoting global cooperation and setting high standards for combating these threats to the international financial system. The countries currently monitored by FATF serve as a testament to the continued vigilance in this fight, with each nation working diligently to address deficiencies and secure their place within the global financial community.

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