The Financial Action Task Force (FATF), the global anti-money laundering watchdog, has taken Bulgaria, Monaco, Ivory Coast and the Democratic Republic of Congo off its list of jurisdictions under increased monitoring, a move that could reshape cross-border banking flows.
The decision followed the body’s latest plenary meetings. The FATF concluded that each of the four nations had advanced in tackling the strategic weaknesses in their frameworks against money laundering, terrorist financing and proliferation financing, which were first flagged in their mutual evaluations.
Vietnam did not share the same outcome. The country remains on the grey list after the watchdog judged its pace of reform to be too slow, and it has signalled that further action may follow if meaningful progress is absent by its next plenary, scheduled for 22 to 26 February.
Grey listing does not carry formal sanctions. However, lenders and other financial firms tend to apply tighter checks to transactions linked to listed countries, which can dampen investment and restrict the movement of capital.
At the more severe end of the scale, Iran, Myanmar and North Korea stay on the FATF black list because of serious shortcomings in their defences against money laundering, terrorist financing and proliferation financing. A blacklisting is the strongest designation the organisation can issue, and its consequences can include frozen investments, sharply higher compliance costs and banks being largely shut out of the international financial system.
North Korean hackers have been held responsible for a $6.3bn theft from Binance, the world’s largest cryptocurrency exchange, an attack that may rank as the largest on record.
Napier AI chief data scientist Dr Janet Bastiman said, “The FATF’s removal of Monaco, Bulgaria, Ivory Coast and the DRC will result in banks reopening relationships they cut when those countries were listed, bringing more cross-border traffic to monitor, with much of it from jurisdictions with a limited record of effective AML controls.”
She added, “Criminal money typically flows through weak points, and as one route is closed, it moves on to the next, whether that is a country still on the grey list like Vietnam or the scam networks operating out of Myanmar. The Napier AI / AML Index shows that $5.09 trillion is laundered globally each year and very little of it stays on one route for long. Money laundering trends appear in suspicious transaction data before a country’s rating changes, so banks relying on a country-risk rating alone will be exposed.”
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