Cusack: FATF and EU jurisdictions lists - commonalities, differences and more.
The Financial Action Task Force issued a new Grey List on 24th February and the European Union issued a new list on 20 December 2022 which came into force for newly added countries just this week on 16th March, 2023.
The FATF removed Morocco and Cambodia. It added Nigeria and South Africa.
The EU added The Democratic Republic of the Congo, Gibraltar, Mozambique & the UAE. It removed Nicaragua. Pakistan and Zimbabwe.
Of added interest, the EU list doesn’t include Albania and Türkiye (both on the FATF list) and has yet to delist Cambodia and Morocco or add Nigeria and South Africa. These are likely to happen over the next 12 months. Afghanistan and Vanuatu remain on the EU list but not on the FATF list.
Not on either list is Russia.
Although the FATF formally suspended Russia's FATF Membership, it did not list Russia on either its black or grey lists. The EU can't yet be convinced Russia meets the test for listing - the EU test is essentially a country presents an important money laundering threat to the EU and the country has certain strategic money laundering deficiencies. Still this is curious because the purpose and consequences of listing means EU obliged entities, including Banks and other financial institutions have to apply Enhanced Due Diligence when dealing with or processing transactions related to listed countries.
Certainly due to the extensive sanctions applied against Russia by the EU it is hard to imagine any EU Bank or Financial Institution not already applying Enhanced Due Diligence against Russian customers or related transactions. That is not yet legally required, though it will be for customers and institutions in Gibraltar, the United Arab Emirates and many others. This is a gap that should be closed.
The UK also doesn’t yet include Russia on its high risk third country list but it had named Russia as one of a handful of countries in its National Risk Assessment 2020 which will trigger UK Banks & Financial Institutions to apply Enhanced Due Diligence to Russia.
For justification that Russia should be included See: https://thefinancialcrimenews.com/russia-financial-crime-how-russia-has…
For the EU List See https://finance.ec.europa.eu/financial-crime/high-risk-third-countries-…
For the FATF Lists See: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored…
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John Cusack is an experienced leader with a successful record of working in the banking industry. He is skilled in Compliance, Fighting Financial Crime, and leading cross industry and public private collaborations. He chairs the Global Coalition to Fight Financial Crime.
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