🔹 Definition
The Grey List, officially known as the list of Jurisdictions Under Increased Monitoring, is published by the Financial Action Task Force (FATF) and includes countries that have strategic deficiencies in their regimes to counter money laundering, terrorist financing, or proliferation financing, but have formally committed to address these weaknesses within agreed timeframes.
While not as severe as the Black List, being on the Grey List signals heightened AML/CFT risk and prompts enhanced due diligence (EDD) from financial institutions and regulated entities dealing with these jurisdictions.
🔹 Frequently Asked Questions (FAQs)
Q1: What does it mean when a country is placed on the FATF Grey List?
- The country has identified gaps in its AML/CFT framework
- It has formally agreed to an action plan with FATF to address the deficiencies
- It undergoes more frequent FATF monitoring and reporting
- Financial institutions globally are expected to increase scrutiny when dealing with clients or transactions involving the listed country
Q2: What are the implications for compliance programs?
- Enhanced Due Diligence (EDD) is often required for:
- Clients with ties to Grey List countries
- Transactions originating from or routed through those jurisdictions
- Higher risk scoring may apply during customer onboarding or periodic review
- May trigger reporting obligations under certain local regulations
- Increased reputational and regulatory risk if exposure is not properly managed
Q3: What are examples of countries on the Grey List?
As of recent FATF updates (subject to change), examples include:
- Nigeria
- South Africa
- Philippines
- Türkiye
- UAE
Note: Countries can be added or removed based on progress in implementing FATF action plans.
Q4: How does the Grey List differ from the Black List?
- Grey List: Jurisdictions working with FATF to improve AML/CFT standards
- Black List (High-Risk Jurisdictions Subject to a Call for Action): Countries with serious AML/CFT deficiencies that have not cooperated or made sufficient progress (e.g., North Korea, Iran)
