The Financial Action Task Force (FATF) sets standards to ensure a coordinated global response to prevent money laundering and terrorist financing. It monitors countries to ensure they implement the FATF Standards fully and effectively.
The FATF identifies jurisdictions with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes. Such jurisdictions may be classified as being:
- Under increased monitoring.
- High-risk jurisdictions.
Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering and terrorist financing (ML/TF).
These jurisdictions must report on their progress in addressing their strategic deficiencies and if significant progress is made, they may no longer be subject to increased monitoring by the FATF. Alternatively, failure to address strategic deficiencies could result in jurisdictions becoming classified as high-risk.
The FATF has provided an update on the progress of jurisdictions under increased monitoring.
June 2023 update
On June 23, 2023, the FATF added Cameroon, Croatia, and Vietnam to its list of Jurisdictions under Increased Monitoring and did not remove any jurisdictions from the list.
Cameroon
In June 2023, Cameroon pledged to collaborate with the FATF and GABAC to enhance its AML/CFT measures. Progress has been made since the adoption of the MER in October 2021, including increased resources for the FIU and improved capacity of investigation and judicial bodies in handling ML/TF cases. Cameroon aims to implement its FATF action plan by aligning national AML/CFT strategies with the NRA findings, prioritising international cooperation requests based on risks, strengthening supervision of banks and non-bank financial institutions, ensuring access to beneficial ownership information, enhancing information exchange, conducting effective money laundering investigations, prioritising asset seizure and confiscation, and pursuing terrorist financing investigations while preserving legitimate NPO activities.
Croatia
In June 2023, Croatia committed to collaborating with the FATF and MONEYVAL to strengthen its AML/CFT regime. Progress has been made since the adoption of the MER in December 2021, including licensing and monitoring of VASPs, implementing effective sanctions, and enhancing preventive measures for high-risk sectors. Croatia’s FATF action plan includes completing the national risk assessment, increasing resources for the FIU, improving detection and investigation of different types of money laundering, increasing the application of provisional measures for confiscation, enhancing detection and investigation of terrorist financing, establishing a framework for UN TFS measures, and addressing vulnerabilities of NPOs to terrorist financing.
Vietnam
In June 2023, Vietnam committed to working with the FATF and APG to strengthen its AML/CFT regime. Progress has been made since the adoption of the MER in November 2021, including joining the Asset Recovery Interagency Network Asia Pacific (ARIN-AP) and adopting a national action plan on AML/CFT/CPF. Vietnam’s FATF action plan involves increasing risk understanding and domestic cooperation, enhancing international cooperation, implementing risk-based supervision for financial institutions, regulating virtual assets and service providers, addressing compliance deficiencies, conducting outreach with the private sector, establishing a beneficial ownership regime, ensuring the independence of the FIU, prioritising money laundering investigations and prosecutions, and monitoring compliance with PF TFS obligations.
Other jurisdictions under increased monitoring
Albania
Albania has made progress in improving its AML/CFT regime since committing to work with the FATF in February 2020. However, the FATF is concerned about Albania’s plans to establish a Voluntary Tax Compliance (VTC) program, which does not comply with its AML/CFT principles and best practices. The FATF has not authorized an on-site visit until Albania revises its draft VTC law and ensures adequate safeguards to prevent potential abuse for money laundering purposes. Alternatively, Albania may consider abandoning the program altogether.
Barbados
Barbados has been working to strengthen its AML/CFT regime since February 2020, with measures to prevent the misuse of legal entities for criminal purposes and aligning its ML investigations and prosecutions with its risk profile. However, Barbados still needs to work on its action plan to address deficiencies, particularly in ensuring accurate beneficial ownership information and repatriating confiscated assets. The FATF expresses concern that Barbados failed to complete its action plan, which expired in April 2022, and urges them to demonstrate significant progress by June 2023.
Burkina Faso
Since February 2021, Burkina Faso has been working to improve its AML/CFT regime, including increasing ML investigations and international cooperation. However, the country needs to address strategic deficiencies by updating its understanding of ML/TF risks, strengthening supervisory authorities, maintaining beneficial ownership information, increasing suspicious transaction reporting, establishing procedures for cross-border currency declaration, enhancing cooperation between law enforcement agencies and prosecuting authorities, and implementing targeted financial sanctions. While the FATF notes Burkina Faso’s progress, all action plan deadlines have expired, and work remains. The FATF urges Burkina Faso to continue implementing its action plan as soon as possible.
The Cayman Islands
The Cayman Islands committed to working with the FATF and CFATF to strengthen its AML/CFT regime in February 2021. They have made progress by securing ML convictions and demonstrating progress on complex cases with a foreign predicate. However, the Cayman Islands needs to continue implementing its action plan to address strategic deficiencies and prosecute all types of money laundering cases in line with its risk profile. The FATF is concerned that the Cayman Islands has not completed its action plan, which expired in May 2022. The FATF urges the Cayman Islands to demonstrate significant progress by June 2023, or the FATF will consider next steps.
The Democratic Republic of the Congo
In October 2022, the DRC committed to working with the FATF and GABAC to strengthen its AML/CFT regime. The DRC has made progress on some of the recommended actions in its Mutual Evaluation Report (MER), including prioritising the confiscation of proceeds of crime. To implement its FATF action plan, the DRC will finalise its National Risk Assessment (NRA) on ML and TF and adopt an AML/CFT national strategy, designate supervisory authorities for all Designated Non-Financial Businesses and Professions (DNFBP) sectors, adequately resource the Financial Intelligence Unit (FIU), and strengthen the capabilities of authorities involved in the investigation and prosecution of ML and TF.
Gibraltar
Gibraltar committed to working with the FATF to strengthen its AML/CFT regime in June 2022 and has made progress by demonstrating that supervisors for various non-bank entities are now using effective, proportionate, and dissuasive sanctions for AML/CFT breaches. Gibraltar should continue implementing its action plan to address its strategic deficiencies, including pursuing more final confiscation judgments in line with the jurisdiction’s risk and context.
Haiti
Haiti has committed to working with the FATF to improve the effectiveness of its AML/CFT regime despite its challenging social, economic, and security situation. FATF acknowledges Haiti’s efforts and urges it to continue implementing its action plan to address strategic deficiencies, including risk assessment and information sharing, addressing technical deficiencies in its legal and regulatory framework, ensuring beneficial ownership information is maintained and accessible, making better use of financial intelligence, increasing proceeds of crime recovery, and demonstrating that authorities are identifying, investigating and prosecuting ML cases in a manner consistent with Haiti’s risk profile.
Jamaica
Jamaica committed to work with the FATF in February 2020 to strengthen its AML/CFT regime, introducing Charities regulations and bringing the microcredit sector under AML/CFT supervision. The FATF acknowledged these efforts, but Jamaica still needs to address strategic deficiencies by including all DNFBPs in the AML/CFT regime, ensuring adequate, risk-based supervision, and ensuring accurate ownership information. FATF expressed concern over Jamaica’s uncompleted action plan, which expired in Jan 2022, and urged significant progress by June 2023. Failure could result in the FATF urging all jurisdictions to apply enhanced due diligence to business relations and transactions with Jamaica.
Jordan
Jordan has committed to working with the FATF to improve its AML/CFT regime since October 2021. Jordan has taken positive steps, including inspecting reporting entities, prosecuting money laundering, and conducting outreach on Targeted Financial Sanctions (TFS) obligations. Jordan needs to address strategic deficiencies by completing and disseminating ML/TF risk assessments, implementing effective sanctions for noncompliance, including with transparency obligations, and demonstrating rectification of TFS deficiencies.
Mali
In October 2021, Mali committed to working with the FATF to improve its AML/CFT regime. Mali has conducted trainings and improved cooperation mechanisms between the FIU and law enforcement authorities (LEAs) on financial intelligence. However, Mali needs to continue implementing its action plan to address strategic deficiencies, such as developing and implementing a risk-based approach for AML/CFT supervision, conducting comprehensive assessments of ML/TF risks, increasing the capacity of FIU and LEAs, and conducting parallel financial investigations.
Mozambique
Mozambique pledged to work with the FATF to enhance its AML/CFT regime in October 2022. Since its last review, Mozambique has made some progress, including finalising its NRA and improving asset confiscation efforts. Mozambique’s FATF action plan includes: implementing risk-based AML/CFT strategies and policies, conducting training for LEAs on mutual legal assistance, providing resources for beneficial ownership information collection, increasing human resources of the FIU, and demonstrating LEAs capability to effectively investigate ML/TF cases using financial intelligence.
Nigeria
Nigeria made a commitment to work with the FATF to strengthen its AML/CFT regime in February 2023. Since the adoption of its MER in August 2021, Nigeria has made progress on some of the MER’s recommended actions including updating its AML/CFT legislative framework and strengthening its TFS implementation. Nigeria’s FATF action plan includes enhancing international cooperation, improving AML/CFT risk-based supervision, ensuring beneficial ownership information is accurate and applying sanctions for breaches of obligations, increasing the use of financial intelligence, and increasing the investigation and prosecution of ML and TF cases.
Panama
Panama made a commitment in June 2019 to work with the FATF to improve its AML/CFT regime. It has taken steps to improve its regime, including prosecuting foreign tax crime-related money laundering. However, it needs to address remaining measures in its action plan, especially regarding beneficial ownership information and timely access by competent authorities. The FATF is concerned that Panama failed to complete its action plan, which expired in January 2021. The FATF urges Panama to complete its plan by June 2023 or risk enhanced due diligence on business relations and transactions.
Philippines
In June 2021, the Philippines committed to working with the FATF to strengthen its AML/CFT regime, but it needs to address strategic deficiencies. The Philippines must ensure effective risk-based supervision of DNFBPs, mitigate risks associated with casino junkets, enhance LEA access to beneficial ownership information, increase the use of financial intelligence, prosecute more ML and TF cases, and improve targeted financial sanctions. Although the Philippines has made progress, all deadlines have expired and more work needs to be done. The FATF urges the Philippines to continue implementing its action plan as soon as possible to address the strategic deficiencies.
Senegal
Senegal committed to working with the FATF to improve its AML/CFT regime in February 2021. Since then, Senegal has established a database to track ML/TF investigations and improved the framework for TF investigations. However, Senegal needs to address strategic deficiencies by improving compliance through imposing sanctions, updating and maintaining comprehensive beneficial ownership information, and enhancing LEA capacity to combat TF. The FATF acknowledges progress but urges Senegal to implement its action plan as soon as possible since all deadlines have expired.
South Africa
South Africa committed to working with the FATF to improve its AML/CFT regime in February 2023. Since the adoption of its MER in June 2021, South Africa has made progress in improving its system, including developing national policies, and amending the legal framework for TF. South Africa’s action plan involves improving risk-based supervision, ensuring timely access to beneficial ownership information, increasing investigations and prosecutions of ML/TF, and enhancing its identification and confiscation of proceeds. South Africa will also update its TF Risk Assessment and implement effective TFS.
South Sudan
In June 2021, South Sudan committed to working with the FATF to improve its AML/CFT regime. To comply with FATF Standards, South Sudan needs to review its AML/CFT Act, become a party to relevant conventions, implement risk-based AML/CFT supervision, collect beneficial ownership information, establish an FIU, implement targeted financial sanctions, and monitor NPOs at risk of terrorist financing abuse. The FATF notes that South Sudan has made limited progress in implementing its action plan and urges it to do more.
Syria
Since February 2010, Syria has committed to working with the FATF to improve its AML/CFT regime. In June 2014, the FATF acknowledged that Syria had made significant progress in addressing its action plan, including by criminalising terrorist financing and implementing procedures to freeze terrorist assets. Although the FATF has determined that Syria has completed its action plan, it has not been able to conduct an on-site visit due to the security situation. The FATF will continue to monitor Syria’s progress and schedule an on-site visit as soon as possible.
Tanzania
In October 2022, Tanzania made a political commitment to work with the FATF to enhance the effectiveness of its AML/CFT regime. Tanzania has made progress on some of the recommended actions in its April 2021 MER, including developing a legal framework for terrorist financing and disseminating FIU strategic analysis. Tanzania plans to improve its AML/CFT regime by conducting risk-based supervision of FIs and DNFBPs, strengthening its capability to conduct investigations and prosecutions of money laundering, seizing proceeds of crime, and conducting a comprehensive TF Risk Assessment.
Türkiye
In October 2021, Turkey committed to work with the FATF to strengthen its AML/CFT regime and has since issued regulations and guidance to improve its system. To address its strategic deficiencies, Turkey should increase on-site inspections, use financial intelligence to support ML investigations, undertake more complex ML investigations and prosecutions, update risk assessments, and conduct more TF investigations. It should also pursue outgoing requests for targeted financial sanctions related to UN-designated groups and implement a risk-based approach to NPO supervision.
Uganda
Uganda has made progress in improving its AML/CFT regime since committing to with the FATF in February 2020, including prosecuting ML and confiscating proceeds of crime. However, the country needs to continue its efforts to address its strategic deficiencies, including implementing risk-based supervision of FIs and DNFBPs, ensuring LEA access to beneficial ownership information, and addressing technical deficiencies in its TFS legal framework. The FATF is concerned that Uganda has not completed its action plan, which expired in May 2022, and urges the country to make significant progress by June 2023. The FATF will consider next steps if there is insufficient progress.
United Arab Emirates
The United Arab Emirates (UAE) has made significant progress since February 2022 in strengthening its AML/CFT regime, including an increase in outbound MLA requests, greater use of financial intelligence, and combatting UN sanctions evasion. The UAE needs to continue implementing its FATF action plan by enhancing its understanding of ML/TF risks, increasing the number and quality of STRs filed by FIs and DNFBPs, and demonstrating sustained effective investigations and prosecutions of ML cases.
Yemen
Since February 2010, Yemen has been committed to addressing its AML/CFT deficiencies and has made significant progress by criminalising money laundering and terrorist financing, establishing procedures to identify and freeze terrorist assets, improving its customer due diligence and suspicious transaction reporting requirements, and establishing a functional financial intelligence unit. However, due to the security situation, the FATF has not been able to confirm whether the necessary reforms are being sustained through an on-site visit. The FATF will continue to monitor Yemen’s progress and conduct an on-site visit as soon as possible.
Key takeaways
The Financial Action Task Force (FATF) has provided an update on the progress of jurisdictions under increased monitoring to address strategic deficiencies in their anti-money laundering and counter-terrorist financing regimes. The FATF has recognised the progress made by some jurisdictions but has expressed concerns over uncompleted action plans. The FATF will consider next steps if jurisdictions fail to demonstrate significant progress in addressing their strategic deficiencies.
