The Financial Action Task Force (FATF) has the policy of reporting countries with insufficient AML / CFT regimes from 2000 and has proven to be successful over the years. Three times a year the FATF issues public documents that include jurisdictions whose measures against money laundering and terrorist financing are poor. In general, the FATF has inspected more than a hundred jurisdictions as of 2020 (80 of them were publicly recognized). Out of those 80, 60 jurisdictions made an effort to implement the reforms needed for addressing AML / CFT insufficiencies which means that they do not use the system anymore.
Monitoring of high-risk jurisdictions
The international financial system can be harmed because of the significant deficiencies in anti-money laundering, anti-terrorism funding, and anti-proliferation financing regimes of those high-risk jurisdictions. That is why the FATF urges all countries and jurisdictions to conduct a deeper level of due diligence on the listed countries. In fact, other countries are asked to conduct countermeasures in order to prevent continuing money laundering, terrorist funding, and proliferation financing.
To be able to reflect on the countries’ success in overcoming strategic flaws, the FATF and its regional bodies (FSRBs) work in collaboration. The FATF urges the countries to form an action plan, praises their success, and monitors their activities. The organization recommends following through with the details of risk assessments.
The list of jurisdictions under increased monitoring includes the countries whose progress is being monitored and evaluated by the FATF. The organization encourages to continue the progress these countries made in fighting money laundering and terrorist financing. According to the report published in February 2021, the jurisdictions with strategic deficiencies are:
- Albania
- Barbados
- Botswana
- Burkina Faso
- Cambodia
- Cayman Islands
- Ghana
- Jamaica
- Mauritius
- Morocco
- Myanmar
- Nicaragua
- Pakistan
- Panama
- Senegal
- Syria
- Uganda
- Yemen
The review process
As the countries with strategic AML / CFT weakness pose a potential danger to the whole international financial system, the FATF needs to determine them and track their performance. The FATF runs the tests to define the jurisdiction’s risks, deficiencies, specific threats.
If a jurisdiction shows low marks during the risk assessment, it earns a place on the list and is required to make an action plan to remove its deficiencies. The country can leave the list once all or almost all of the points of the action plan are met. The removal procedures also include on-site control. However, after the exclusion, the country still should continue on collaborating with the FATF.
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