Bulgaria added to FATF Grey List; Panama/Cayman Islands Removed

Following today’s conclusion of its October 2023 plenary session, the FATF has updated the list of high-risk countries. The changes to the list include the addition of Bulgaria to the grey list and the removal of four countries – namely Panama, Cayman Islands, Albania and Jordan.

Background Information

In our article on the Financial Action Task Force (FATF), we explained the important role that this inter-governmental organisation has in the world-wide fight against money laundering and terrorist financing. We highlighted the importance of tracking updates published by the FATF, and how changes to the list of high-risk countries maintained by the FATF may mandate changes to the type of due diligence you apply to your clients.

The FATF maintains two lists of high-risk countries – a “blacklist” and a “grey list”. The blacklist, officially known as “High-Risk Jurisdictions Subject to a Call for Action” includes countries that are considered to be non-cooperative in the global fight against money laundering and terrorist financing. The “grey list”, officially known as “Jurisdictions under Increased Monitoring” includes countries that are identified by the FATF to have strategic deficiencies in their AML/CFT regimes but are making significant efforts to improve and are working with the FATF to resolve these issues within the agreed timeframes.

These lists are usually updated every four months at the end of the FATF’s plenary session, a meeting open to delegations from all 200+ FATF member countries.

Latest FATF Lists

Added to the Grey List: Bulgaria

Following the inclusion of Croatia to the grey list in June 2023, the FATF has now placed a second European Union country on this list – Bulgaria. The FATF referenced the Mutual Evaluation Report (MER) published in May 2022. Despite acknowledging the progress made in Bulgaria since then, the FATF highlighted ten areas that require improvements within the country’s AML regime, including improvements in risk-based supervision across various financial and DNFBP sectors as well as implementing necessary refinements in its strategy, investigations, and prosecutions.

Countries taken off the Grey List

Four countries have been taken off the FATF grey list. This includes Panama and Cayman Islands, two countries that are typically considered financial centers, due to the large banking sectors and favourable corporate environments that attract considerable foreign investment. Panama had been on the list since June 2019 while Cayman Islands had been added to the list in February 2021.

The two other countries to be taken off the list were Albania and Jordan.