FATF Update Brings Changes to Grey List and More

Like the rest of the regulatory world - and the crypto industry as well - the Financial Action Task Force (FATF) is always developing in response to new technology and benefits or issues that can arise from it. The most recent plenary meeting of the FATF took place in Paris last month and had a few notable updates.

In the October meeting, the FATF covered mutual evaluation reports (MERs), updates to the ‘grey list’, revisions to standards and compliance measures, and ongoing sanctions. Some key aspects included:

Refining AML and counter-terrorism financing (CFT) guidelines,

Updates to financial inclusion and digital ID standards which could facilitate easier identity verification,

Reviewing standards for cross-border payment systems, which could have a wide-reaching impact on compliance measures,

Protecting non-profit organizations and professionals working with them from issues caused by FATF standards that could impede legitimate charity work,

The ability to better detect and prevent online child sexual exploitation.

Changes to the grey list, either added due to failures identified in MERs around transparency, prosecution and the like, or removed thanks to improvements in countering financial crime, were:

+ Algeria

+ Angola

+ Côte D’Ivoire

+ Lebanon

- Senegal

This leaves the grey and black lists as follows.

Grey list (requiring increased monitoring):

• Algeria
• Angola
• Bulgaria
• Burkina Faso
• Cameroon
• Côte d'Ivoire
• Croatia
• Democratic Republic of Congo
• Haiti
• Kenya
• Lebanon
• Mali
• Monaco
• Mozambique
• Namibia
• Nigeria
• Philippines
• South Africa
• South Sudan
• Syria
• Tanzania
• Venezuela
• Vietnam
• Yemen

Black list (countries with a high risk of money laundering, terrorist financing and other fraud which require Enhanced Due Diligence): :

• Democratic People's Republic of Korea
• Iran
• Myanmar

In addition, the FATF reported on two MERs - one for Argentina and another for Oman. In these, both countries were found to have progressed, though both continued to require improvements, with the FATF specifically calling out Argentina’s need to prosecute certain money laundering cases and Oman’s weakness in preventing legal entities from being used in financial crime. These will need to be addressed before the next cycle of MERs can identify improvements. In the meantime, this means that compliance measures for those working in or with the two countries will be evolving and those seeking to comply with local regulations will need to prepare for changes in regulations and due diligence procedures.

Also called out in the update was the FATF’s position on Russia, which is still suspended, and the organization urged its members to make every effort to avoid dealing with Russia as the sanctions continue to affect the country.

All these changes and enhancements to standards are a slew of other things that compliance teams have to be cognizant of as they navigate the already-tricky waters of regulations. Fortunately, Blockpass’ team and solutions are on top of all these developments, meaning that anyone who uses Blockpass’ compliance measures don’t have to worry about new regulations or alterations to existing ones: all the hard work has been done for them!

With the developments noted in this FATF update, as well as other world events and developments in the crypto space that mean regulation and compliance are only going to be more vital than ever, now is the time to prepare with a solution that makes the whole process simple and affordable.

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