FATF Tightens Grey Listing Rules with New Risk-Based Focus
The Financial Action Task Force (FATF) has introduced significant changes to its criteria for placing countries on its grey list, aiming to relieve the burden on least developed countries (LDCs) while targeting nations that pose greater risks to the international financial system.
Impact on Least Developed Countries (LDCs)
Extended Observation Period for LDCs
Impact of Reforms
FATF Grey’s List
Objective
Origin
Headquarters : Paris, France.
Members
Black List
Grey List
Summary/Static | Details |
Why in the news? | The Financial Action Task Force (FATF) has introduced significant changes to its criteria for placing countries on its grey list. |
Purpose of FATF | To identify jurisdictions with deficiencies in combating money laundering, terrorist financing, and proliferation financing. |
FATF’s Revised Criteria | Focus on countries meeting specific risk criteria, prioritizing FATF Members and countries with large financial sectors. |
LDCs Criteria | LDCs are not prioritized unless they pose significant risks in money laundering or terrorism financing. |
Extended Observation Period for LDCs | LDCs get a longer observation period (up to 2 years) to address deficiencies and improve systems. |
Impact of Reforms | Expected to reduce by half the number of low-capacity countries on future grey lists, focusing efforts on high-risk countries. |
FATF Grey Listing Process | Countries with weak AML/CFT systems are placed on the grey list and work on action plans to address deficiencies. |
Countries on FATF Grey List | Includes Bulgaria, Burkina Faso, Cameroon, Haiti, Kenya, Mali, Venezuela, and others. |
About FATF | Intergovernmental body to combat money laundering and terrorist financing. Established in 1989, headquartered in Paris. |
FATF Members | 39 members, including the U.S., India, China, Saudi Arabia, EU, etc. India became a member in 2010. |
Black List | Countries (NCCTs) supporting terror funding and money laundering, such as North Korea, Iran, and Myanmar. |
Grey List | Countries considered safe havens for terror funding and money laundering, potentially moving to the black list. |
India has many beautiful national parks that help protect forests, animals and nature. These parks…
India is a land full of history, with many forts that tell stories of bravery,…
As people around the world live longer and birth rates go down in many countries,…
Every year on July 22, India observes National Flag Day, also known as Tiranga Adoption…
There are many countries in the world and each one has a unique name, culture…
The National Bank for Agriculture and Rural Development (NABARD) recently celebrated its 44th Foundation Day,…