FATF Updates List of Countries Needing ‘Increased Monitoring’

The Financial Action Task Force (FATF) has added new countries to its “increased monitoring” list.

FATF, which sets global standards for anti-money laundering and countering the financing of terrorism, recently included the nations of Kenya and Namibia on that list while removing Barbados, Gibraltar, Uganda and the United Arab Emirates (UAE).

“Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing,” the France-based international agency said.

“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to swiftly resolve the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the ‘grey list.’”

The UAE made the gray list in 2022 over concerns its leaders weren’t doing enough to stamp out unlawful financial activity. The gray list is a step above the agency’s “black list,” which includes countries like Iran and North Korea.

FATF says it removed the Gulf state from the list after it made “significant progress” in improving its anti-money laundering and countering the financing of terrorism (AML/CTF) program.

In an announcement Thursday (Feb. 29) from the U.S. Financial Crime Enforcement Network (FinCEN), the regulator used the update to remind American financial institutions of “their obligations to comply with the due diligence obligations for foreign financial institutions (FFI)” under the law and to make sure their due diligence programs include measures to detect and report money laundering.

As noted here earlier this week, the U.S. has recently made a number of moves to combat money laundering, including the recent launch of FinCEN’s beneficial ownership registry.

The law now requires many businesses to turn over to the government beneficial ownership information, or “identifying information about the individuals who directly or indirectly own or control a company,” as FinCEN puts it.

“The registry will shine a light on the constellation of anonymous shell companies previously formed in the country,” Casey Michel, head of the Combating Kleptocracy Program at the Human Rights Foundation, wrote in a recent Financial Times op-ed.

“For years, the U.S. enabled the creation of these shells at a far higher clip than competitors, led especially by states such as Delaware and Nevada.”

Michel argues that the registry prevents anyone “from kleptocrats and oligarchs to cartel heads and arms traffickers” to create an anonymous shell company.