FATF Plenary October 2024: Key Updates on Grey List, New Guidance, and Recommendation Consultation

The Financial Action Task Force (FATF) held its first plenary meeting under President Elisa de Andra Madrado in Paris from October 23–25, 2024. This meeting brought significant developments, including updates to the FATF’s grey list, new risk assessment guidance, and a public consultation on Recommendation 1.

Grey List Updates: Countries Added and Removed

One of the most notable outcomes was the update to the FATF grey list, which highlights jurisdictions under increased monitoring. This October, Algeria, Angola, C?te d'Ivoire, and Lebanon were added to the grey list due to issues with their anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks. Conversely, Senegal was removed from the list, a positive step reflecting the country’s improved compliance and successful implementation of required reforms. Additionally, Argentina and Oman had their mutual evaluation reports adopted, with publication pending after further quality and consistency checks.

South Africa, which remains on the grey list, showed substantial progress. As detailed in its recent report, the country has met 16 of its 22 action items, including significant upgrades in compliance. South Africa now has six remaining action items, focusing on areas such as investigating complex money laundering cases, improving beneficial ownership information accessibility, and ensuring sanctions for AML/CFT violations are effectively applied. The country aims to address these by February 2025, after which an onsite FATF review could potentially lead to its removal from the grey list.

New Guidance on National Risk Assessments

Alongside grey list adjustments, the FATF released updated guidance for national money laundering risk assessments. This revision is particularly geared toward helping jurisdictions with limited resources better understand and mitigate risks. It also aligns with FATF’s recent updates to its grey-listing criteria, aiming to reduce the number of countries being added by enhancing early risk mitigation.

Public Consultation on Recommendation 1

A significant outcome of the plenary was the announcement of a public consultation on reforms to FATF’s Standards, specifically Recommendation 1. This recommendation focuses on applying a risk-based approach to AML/CFT practices, encouraging simplified measures for low-risk areas to support financial inclusion. The consultation invites feedback on proposed reforms that would help countries tailor their risk responses more precisely, balancing effective risk management with inclusion.

What Actions Should Firms Take?

Given the plenary’s outcomes, firms should take immediate steps to review and adjust their AML/CFT practices:

1. Update Country Risk Scores: With Algeria, Angola, C?te d'Ivoire, and Lebanon added to the grey list, firms should reassess these countries' risk scores and carefully examine the reasons for their inclusion. Excessive de-risking measures, however, are discouraged, as the grey list is intended as a supportive measure to encourage reform.
2. Monitor Compliance Updates: Compliance teams should stay updated on the Recommendation 1 public consultation and consider how any resulting changes might impact their AML/CFT procedures.
3. Engage with FATF Guidance: Firms in lower-capacity jurisdictions should familiarize themselves with FATF’s new guidance on national risk assessments, which may offer valuable insights and help streamline AML/CFT compliance efforts.

The FATF’s October 2024 plenary outcomes reinforce the organization’s commitment to refining AML/CFT standards and supporting countries in achieving compliance without excessive constraints. Through these updates and consultations, FATF continues to provide a structured framework for global risk management, balancing robust AML/CFT measures with practical considerations for all jurisdictions.

Just in case you’re seeing FATF for the very first time:

The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 by the G7 to combat money laundering and, later, the financing of terrorism and proliferation of weapons of mass destruction. Headquartered in Paris, FATF sets international standards, often called "Recommendations", to help countries build effective regulatory frameworks to counter these financial crimes.

Key Objectives of FATF

The FATF develops standards, known as Recommendations, to prevent money laundering, terrorist financing, and threats to global financial systems. It ensures member countries comply through mutual evaluations, monitors high-risk countries on its Grey and Black Lists, and provides guidelines and best practices. FATF also regularly updates its standards, inviting stakeholder feedback through public consultations.

Structure and Membership

The FATF consists of 39 members (37 countries and 2 organizations) and collaborates with global bodies like the IMF and World Bank. The main decision-making body, the Plenary, meets three times a year to review global financial crime risks, update monitoring lists, and refine standards. If you’re interested in list of countries on back and grey lists visit: "Black and grey" lists

Impact and Influence

The FATF’s Recommendations shape laws, regulations, and compliance programs worldwide. Countries that fail to comply face reputational risks and restricted access to international finance. FATF’s standards are central to global efforts on financial transparency and security.

Reference

FATF Press Releases and Official Statements on plenary outcomes

FATF document on South Africa’s Progress

FATF detailed guidance documents and updates on AML/CFT recommendations

FATF Information on public consultations and standards.

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