What changes has The Financial Action Task Force (FATF) made to the Black and Grey Lists?
The Black and Grey Lists are important, as these list are used to determine whether the member countries are on a Call for Action or Increased Monitoring List.
If prospective or existing clients, counter parties or third parties have links to such countries enhanced due diligence measures will be required.
High-Risk Jurisdictions - Subject to a Call for Action
'This statement, (previously called "Public Statement"), identifies countries or jurisdictions with serious strategic deficiencies to counter money laundering, terrorist financing, and financing of proliferation. For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country.
This list is often externally referred to as the black list.'
Jurisdictions subject to a FATF call on its members and other jurisdictions to apply countermeasures:
- Democratic People's Republic of Korea (DPRK)
- Iran
Jurisdictions subject to a FATF call on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from the jurisdiction:
- Myanmar
See link for further information here
Jurisdictions - Under Increased Monitoring
'This statement identifies countries that are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.
This list is often externally referred to as the grey list.'
Jurisdictions under increased monitoring
- Algeria
- Angola
- Bulgaria
- Burkina Faso
- Cameroon
- Cote d'lvoire
- Croatia
- Democratic Republic of the Congo
- Haiti
- Kenya
- Lao PDR
- Lebanon
- Mali
- Monaco
- Mozambique
- Namibia
- Nepal
- Nigeria
- South Africa
- South Sudan
- Syria
- Tanzania
- Venezuela
- Vietnam
- Yemen
The Philippines is no longer subject to FATF increased monitoring.
See the link here
Why is this important?
Regulation 33 of the Money laundering Regulations 2017 (as amended) (MLR 17) states when Enhanced Customer Due Diligence and Ongoing Enhanced Due Diligence measures should be applied.
Regulation 33(3)(a) defines a high-risk third country (HRTC) as:
(3) For the purposes of paragraph (1)(b)—
(a)“high-risk third country” means [a country named on either of the following lists published by the Financial Action Task Force as they have effect from time to time—
(i)High-Risk Jurisdictions subject to a Call for Action;
(ii)Jurisdictions under Increased Monitoring;]]
These lists are updated three times a year, on the final day of each FATF plenary meeting, held every February, June and October.
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Disclaimer:
This post does not provide legal or regulatory advice.