Introduction: FATF Grey List and Black List Update
The Financial Action Task Force (FATF) has released a new update to its grey list, signaling shifts in the global anti-money laundering (AML) and counter-terrorist financing (CFT) environment. This adjustment highlights evolving compliance expectations and the need for robust risk management in financial systems worldwide.
The FATF grey list ensures transparency in the financial system by fishing out countries identified as having strategic weaknesses in their AML/CFT regulations and frameworks. These jurisdictions are under increased monitoring, though they have committed to improving their frameworks within agreed timelines. Being listed can lead to reputational damage and heightened scrutiny from international financial institutions.
In contrast, the FATF black list identifies nations with significant, ongoing failures to address AML compliance risks. Entities operating in these high-risk jurisdictions face enhanced due diligence and may be subject to countermeasures, including transaction restrictions and closer regulatory oversight.
Related: FATF Grey List Explained
June 13 2025 FATF Update: Key Changes
On 13 June 2025, the FATF confirmed that Bolivia and the British Virgin Islands (BVI) have been added to the grey list following evaluations of their AML/CFT regimes. The recent evaluation of the country's AML frameworks revealed compliance gaps requiring further reform. However, Croatia, Mali, and Tanzania were removed from the grey list after demonstrating adequate progress in strengthening their AML regulatory frameworks, completing mutual evaluation action plans, and passing on-site assessments.
The FATF's black list remains unchanged, with Iran, North Korea, and Myanmar still flagged as high-risk jurisdictions requiring countermeasures.
What Countries Must Do Under FATF Monitoring?
Countries placed on the grey list are expected to work closely with FATF or regional bodies to close important compliance. These countries follow customised action plans with specific timelines while FAT encourages members to apply a risk-based approach to AML compliance, ensuring legitimate financial services like remittances and humanitarian aid.
In Bolivia’s case, progress has been noted in the FATF's January 2025 report in risk understanding, financial intelligence gathering and asset recovery efforts, but challenges remain. The FATF identified a need for special investigative techniques in money laundering cases, better investigation of high-risk non-financial sectors, reliable/ accurate beneficial ownership data, and increased prosecutions that align with the country's national risk profile to secure removal from the FATF grey list.
The British Virgin Islands (BVI) has taken steps since its November 2023 Mutual Evaluation Report, such as strengthening international cooperation and developing a national CFT strategy. Efforts have also included a targeted risk assessment of the non-profit sector and enhanced communication with financial and designated non-financial businesses.
Going forward, under FATF list monitoring, the BVI is expected to improve supervision of high-risk sectors like TCSPs (Trust and Company Service Providers), VASPs (Virtual Asset Service Providers), and investment firms. Other priorities include refining beneficial ownership registers, boosting the quality of suspicious activity reports (SARs), expanding investigations, and upgrading asset confiscation procedures.
The Purpose Behind FATF List Monitoring
The FATF monitoring emphasizes that the grey and black lists are not punitive measures but tools to help nations fix systemic vulnerabilities that could undermine the global financial system. The successful removal from the FATF grey list, like those of Croatia, Mali, and Tanzania, reflects the importance of commitment to reform. These countries now benefit from stronger reputations, smoother access to the global financial system, and increased investor confidence.