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The impact of grey listing by the Financial Action Task Force (FATF).

A regional focus on Sub-Saharan Africa.

Grey listing by the Financial Action Task Force (FATF) prompts countries to address anti-money laundering (AML) deficiencies through committed reforms outlined in an action plan. Though no official sanctions follow grey listing, it can bring negative economic and reputational impacts, affecting a nation's financial sector and international aid. The most severe outcome is potential blacklisting, incurring mandated sanctions and substantial reputational harm for persistently non-compliant nations. Grey listed countries often demonstrate political commitment, with many improving and exiting within five years.

24 October 2023
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Main points

  • When a jurisdiction is grey listed by the FATF, this means they are actively working with the body to improve their AML/CFT regime. The FATF does not call for sanctions or enhanced due diligence as a result of grey listing.
  • Most countries that are grey listed show political commitment to strengthening their AML/CFT regimes and many exit the grey list within five years.
  • Grey listing may be perceived by other countries and jurisdictions as indicative of high ML/TF risks and thus trigger economic consequences, which can affect the grey listed country’s financial sector and result in a decrease in international financial assistance and aid due to de-risking, impacting lower income countries that my rely on overseas development assistance and foreign aid the most
  • The most severe consequence of grey listing is that a continued non-compliant country may become black listed by the FATF, which does come with mandated sanctions and more serious reputational damage.

Cite this publication

Maslen, C.; (2023) The impact of grey listing by the Financial Action Task Force (FATF).. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2023:24)

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