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FATF Black & Grey: Best Way of Investment Measurement

َWhat Exactly is The FATF Blacklist?

Being blacklisted on the Financial Action Task Force or as it is known FATF list, is quite a challenge as it can put a harsh role on a state’s economy and its international transactions, although nowadays these countries are named Call For Action. Iran had recently been named onto this list along with North Korea, meanwhile, Pakistan is on the FATF “grey list” and has been notified and given 4 months to follow the FATF regulations or else they fall within the threat to be blacklisted. What does this term really imply and what does it imply? What are the differences between Blacklisted countries and those who are in Greylist?

According to FATF Publications:

“High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation.”

For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from the country. This list is often externally referred to as the Blacklist.

One of the notable outcomes from the latest FATF plenary (19-21 February 2020) is that FATF put Iran on its blacklist due to Tehran’s failure to ratify the Palermo and Terrorist Financing Conventions, noncompliance with anti-terrorism standards, and its non-implementation of the anti-money laundering policies.

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What is the Greylist? 

The Financial Action Task Force Greylist was formally called the other monitored jurisdictions. It was stated in the FATF plenary outcomes:

“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. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.”

– It is vital to maintain a good and clear status in the context of international business law in order to avoid any risks and future limitations.

– It is crucial to consider due diligence before contract drafting.

– Always have a clear assessment and understanding of the money laundering and terrorist financing risks of your nation.

– Abide by the FATF standards and regulations and follow the recommended policy tools in order to have the ease to operate within the international framework.

– Remain transparent in all your financial transactions.

Till this day, Grey-Listed countries are:

  • Albania
  • Barbados
  • Burkina Faso
  • Cambodia
  • Cayman Islands
  • Jamaica
  • Jordan
  • Haiti
  • Malta
  • Mali
  • Morocco
  • Myanmar (Burma)
  • Nicaragua
  • Pakistan
  • Panama
  • Philippines
  • Senegal
  • South Sudan
  • Syria
  • Turkey
  • Uganda
  • Yemen
  • Zimbabwe

Why it is important for an investor to recognize these countries?

As an investor, firstly you should examine where you want to invest your money! That being said, it is so important for you to predict the risk of your investment in that country. What if you invest your company’s budget where there’s a possibility of being banned or other economical sanctions?

Second, you might be struggling with this issue where can I ask for information to solve my matters? In LegaMart via this link which is our advisory menu, you can modify your parameters, choose whom you want to ask for advice and it’s Done!

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