In mid-June 2025, the Financial Action Task Force (FATF) issued an update to their list of 'Jurisdictions under Increased Monitoring', commonly referred to as the 'grey list'.
In their update, Bolivia and the British Virgin Islands (BVI) were added, while Croatia, Mali, and Tanzania were removed after undertaking reforms.
Bolivia was added due to its inability to enact meaningful anti-money laundering (AML) reforms and the BVI was added due to scrutiny around its AML and Counter-Terrorist Financing (CTF) regimes.
Countries such as Algeria, Angola, Côte d'Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela all remain under watch for persistent deficiencies in their AML and CTF frameworks.
Grey list status signals to FATF member states and financial institutions that these countries are improving their frameworks, but have not yet fully addressed critical vulnerabilities in their processes or legislation. In response, regulators are urged to apply enhanced due diligence when dealing with entities operating from these countries.
What this means for sanctions and compliance practice
Many financial institutions have already adapted to the FATF's standards, including stricter beneficial ownership requirements and more rigorous controls over virtual assets.
Compliance teams must now adjust their monitoring mechanisms, and firms should ensure that periodic risk assessments are updated to reflect grey list exposures and that screening and transaction monitoring systems are properly calibrated.
This update also highlights developments in countries such as Monaco, which was recently added to the European Commission's AML high-risk list, while others like UAE, Panama, and Gibraltar were delisted following regulatory improvements.
Being on the grey list carries significant implications for both local governments and global financial players. From a business perspective, the status can increase transaction costs, prompt higher scrutiny, and impact market access.
Politically, grey list inclusion can also serve as a lever for international pressure. For example, India recently called for Pakistan to be re-listed, citing insufficient anti-terror finance controls, and the EU is reportedly seeking to add Russia to its own 'grey list', as part of a wider programme of economic sanctions and punitive action against the country.
The FATF's June grey list update delivers a clear message: maintaining global financial integrity requires coordinated, enforceable oversight. The inclusion of new jurisdictions signals that FATF is tightening expectations around financial regulation. For regulated institutions, this is not only a compliance obligation but also an opportunity to exert meaningful pressure on high-risk jurisdictions to align with international standards.