Last month the AML regulatory space saw further changes as the FATF released their second review of their “Grey-list” of jurisdictions.
Officially known as the list of ‘Jurisdictions Under Increased Monitoring’, the FATF’s Grey-List is a key feature in the combat of financial crime on a global scale. Unlike the FATF’s “Black-list” of countries that have shown reluctance to improve their AML &CTF frameworks, the countries which feature on the grey list have committed to developing action plans in collaboration with the FATF to address their strategic deficiencies which would otherwise undermine international efforts in tackling financial crime.
As part of the increased monitoring that these countries are subject to, the FATF regularly reviews each jurisdictions progress in implementing their actions plans within their agreed time frames.
As a result of the FATF’s review of their “Grey-List” published last month, further changes have been made since the FATF’s previous amendment in March this year, in which the UAE was designated as a high-risk jurisdiction.
Notably, Malta has been removed from the Grey-List after significant progress was made in addressing issues, including the detection of inaccurate company ownership information and the lenient sanctions issued to gatekeepers failing to obtain beneficial ownership information. The FATF also cited Malta’s progress in the implementation of financial intelligence to combat tax-based money laundering schemes.
Despite Gibraltar’s progress in implementing recommendations made in the FATF’s Mutual evaluation in December 2019, for which all FATF members are periodically subject to, the FATF has proceeded in designating the financial centre on the Grey-list alongside the UAE for its inaction in addressing several key money laundering risks.
In the UK, firms can expect these changes to be onboarded in the UK’s Money Laundering regulations, which earlier this year was amended to consolidate the FATFs Grey-List and Backlist into a single list of High-Risk jurisdiction for which firms must apply Enhanced Due diligence towards.
With the recent developments in the FATFs assessment of geographic risks of money laundering and terrorist financing, it is important for financial service firms to ensure they have a clear understanding of the AML risks which are applicable to them.
