FATF Grey List 2025: Which Jurisdictions Are Added, Removed and Why It Matters

What the FATF Grey List Is — And Why It Matters

The Financial Action Task Force (FATF) maintains two lists of jurisdictions with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CFT) frameworks:

• Grey list (officially "Jurisdictions Under Increased Monitoring"): Countries that have committed to resolving identified strategic deficiencies within agreed timeframes, in co-operation with the FATF
• Black list (officially "High-Risk Jurisdictions Subject to a Call for Action"): Countries with such severe deficiencies that the FATF calls on all members to apply enhanced due diligence or countermeasures. As of 2025, only Iran, Myanmar, and North Korea remain on the black list.

Grey listing does not impose sanctions. It does not prohibit banking relationships. But in practice, it has an outsized impact on the ability of entities in listed jurisdictions to access the international banking system.

The Practical Banking Impact

Enhanced Due Diligence

When a jurisdiction is grey-listed, international banks are required — under both FATF Recommendations and their own internal compliance frameworks — to apply enhanced due diligence (EDD) to:

• New account openings for entities incorporated or resident in the listed jurisdiction
• Existing relationships with entities in the listed jurisdiction
• Correspondent banking relationships with banks in the listed jurisdiction

EDD typically involves:

• More detailed verification of beneficial ownership
• More extensive source-of-funds and source-of-wealth documentation
• More frequent transaction monitoring and periodic reviews
• Senior management approval for new relationships

De-Risking

In practice, many international banks — particularly US correspondent banks — go beyond EDD and apply outright de-risking: refusing to open accounts for entities in grey-listed jurisdictions or terminating existing relationships. This is not required by FATF or by law, but banks assess that the compliance cost and reputational risk of maintaining relationships with grey-listed jurisdiction entities exceed the commercial benefit.

The consequence is that grey listing can effectively cut off banking access for legitimate businesses and structures in the affected jurisdiction.

Transaction Delays

Even where banking relationships are maintained, transactions involving grey-listed jurisdictions frequently face:

• Extended processing times for wire transfers (additional compliance checks at each correspondent bank in the chain)
• Requests for additional documentation to support routine transactions
• Holds on incoming funds pending compliance review

The February 2025 Plenary — Key Changes

The FATF Plenary held in February 2025 made the following changes to the grey list:

Jurisdictions Removed

Jurisdictions removed from the grey list have demonstrated sufficient progress in addressing their identified strategic deficiencies:

• Senegal: Removed after strengthening its AML/CFT supervisory framework and demonstrating effective implementation of targeted financial sanctions
• Barbados: Removed after completing its action plan, which included enhancing beneficial ownership transparency and improving the capacity of its Financial Intelligence Unit

Jurisdictions Remaining

As of the February 2025 plenary, the grey list included (among others):

• Nigeria: Progress noted on supervision and beneficial ownership, but further work required on confiscation and terrorist financing investigations
• South Africa: Continued on the list pending completion of reforms to its AML/CFT supervisory framework and improvements in prosecution of money laundering
• Tanzania: Progress on risk assessment and international co-operation, with further work required on financial institution supervision
• Vietnam: Progress on risk-based supervision, with ongoing work on beneficial ownership transparency

Jurisdictions Added

The February 2025 plenary added:

• Certain jurisdictions were identified through the FATF's International Co-operation Review Group (ICRG) process as having strategic deficiencies requiring increased monitoring

The June 2025 Plenary — Further Changes

The June 2025 plenary continued the cycle:

Notable Removals

• Jurisdictions that completed their FATF action plans were delisted, restoring normal banking access
• The removals were conditional on continued compliance monitoring through the follow-up process

Notable Additions

• Additional jurisdictions were identified through the mutual evaluation process as having deficiencies requiring increased monitoring

Impact on Specific Offshore Jurisdictions

Jurisdictions Never Grey-Listed

The major offshore financial centres used in international structuring have never been grey-listed:

• Cayman Islands: Assessed as "largely compliant" or "compliant" with FATF Recommendations through the CFATF mutual evaluation process
• BVI: Assessed as having an effective AML/CFT framework through the CFATF
• Jersey and Guernsey: Assessed by MONEYVAL as having robust AML/CFT frameworks
• Singapore: Assessed by the FATF as having a strong AML/CFT regime
• Switzerland: Assessed as having a largely effective framework, with recommendations for improvement in certain areas

Jurisdictions With Historical Grey Listing

• Panama: Grey-listed in June 2019, removed in October 2023 after implementing reforms to its AML/CFT framework. Banking access was significantly disrupted during the listing period.
• UAE: Grey-listed in March 2022, removed in February 2024 after intensive reforms including the establishment of the Executive Office for AML/CFT and enhanced supervision by the Central Bank. The listing period created significant delays in banking transactions.
• Turkey: Grey-listed in October 2021, removed in June 2024 after strengthening its framework for targeted financial sanctions and beneficial ownership.

Structuring Implications

Jurisdiction Selection

When selecting jurisdictions for offshore structures, the FATF status should be a primary consideration:

• Avoid grey-listed jurisdictions for entity incorporation, bank account location, and trustee residence
• Prefer jurisdictions with strong FATF assessments (Cayman, BVI, Jersey, Singapore, Switzerland) to ensure reliable banking access
• Monitor the FATF calendar: Grey list changes are announced after each plenary (typically February, June, and October). Advisors should review the updated list after each plenary.

Banking Strategy

For structures in jurisdictions that are subsequently grey-listed:

• Maintain comprehensive compliance documentation (beneficial ownership, source of funds, source of wealth)
• Engage proactively with the relationship bank to demonstrate compliance
• Consider migrating bank accounts to a non-listed jurisdiction as a precautionary measure
• Be prepared for increased transaction costs and processing delays

Due Diligence on Clients

For advisory firms, grey listing affects client onboarding:

• Clients from grey-listed jurisdictions require enhanced due diligence under the firm's own AML/CFT procedures
• Transaction monitoring must be adjusted to reflect the heightened risk associated with the listing
• Ongoing monitoring must include review of FATF plenary outcomes for any changes affecting client jurisdictions

The Path to Delisting

For jurisdictions on the grey list, the path to removal typically requires:

1. Adoption of a FATF action plan: A detailed set of reforms agreed between the jurisdiction and the FATF
2. Legislative reform: Enacting or amending AML/CFT legislation to address identified deficiencies
3. Institutional capacity building: Strengthening the financial intelligence unit, supervisory authorities, and law enforcement agencies
4. Demonstrated effectiveness: Providing evidence of effective implementation through investigations, prosecutions, and asset confiscations
5. On-site verification: FATF or regional body conducts an on-site assessment to verify progress

The process typically takes two to four years from grey listing to removal.

Key Takeaways

• FATF grey listing does not impose sanctions but triggers enhanced due diligence and, in practice, banking de-risking that can severely disrupt operations
• The February and June 2025 plenaries continued the cycle of additions and removals, reflecting ongoing assessments of jurisdictional AML/CFT effectiveness
• Major offshore financial centres (Cayman, BVI, Jersey, Singapore) have never been grey-listed and maintain strong FATF assessments
• Jurisdictions that have been grey-listed and subsequently removed (UAE, Panama, Turkey) experienced significant banking disruption during the listing period
• Jurisdiction selection for offshore structures should prioritise FATF compliance status as a key factor in ensuring banking access
• Advisory firms must adjust client due diligence and transaction monitoring procedures in response to grey list changes
• The practical consequence of grey listing is economic — restricted banking access — rather than legal