The first FATF plenary meeting in 2025 – which countries have been placed under increased monitoring?

The Financial Action Task Force (FATF) monitors the anti-money laundering and counter-terrorist financing standards of individual jurisdictions. The organization regularly updates the lists of countries with a low level of effectiveness of AML/CFT measures and publishes recommendations for countries under enhanced monitoring.

The FATF updates its gray and black lists three times a year. The FATF held its first plenary meeting of the year from February 17-21, 2025. The most important topics of the meeting were

• Updates regarding countries on the FATF gray list.
• The FATF report on the use of financial intelligence to combat online crime.
• The announcement of a new public consultation to improve the FATF’s overall AML/CFT standards.

Which countries have been added to the FATF gray list?

Nepal

Nepal made significant legislative changes in 2024 to comply with current FATF standards. However, the biggest problems arose with the full implementation of the regulations and their actual enforcement.

The Asia Pacific Group on Money Laundering (APG) had previously noted Nepal’s difficulties in complying with the adopted AML/CFT measures. The lack of proper monitoring of high-risk sectors and difficulties in combating financial crime have led to the country being placed under enhanced monitoring by the FATF and on the grey list.

Laos

Despite taking action in line with the 2023 recommendations, including increasing the resources of the financial intelligence unit (FIU), Laos still faces significant challenges in effectively combating money laundering. The FATF pointed in particular to problems with proper risk assessment, regulatory oversight and the effectiveness of law enforcement agencies.

The most important areas requiring improvement according to the FATF recommendations were:

• strengthening and intensifying the supervision of high-risk sectors, including casinos and special economic zones (SEZs);
• improving the exchange of financial information and communication between relevant authorities;
• increasing the number of investigations and proceedings initiated into suspected money laundering, especially in the context of cross-border crime.

Which countries have been removed from the FATF gray list?

Philippines

After almost four years of continuous cooperation with the FATF, the Philippines have been finally removed from the “gray list”.

The country has undertaken significant reforms to its AML/CFT mechanisms, implementing an amendment to the Anti-Money Laundering Act (AMLA) in 2021 and mandating the immediate implementation of a national AML/CFT strategy. All relevant authorities were thus obliged to participate in national risk assessments related to money laundering and terrorist financing (October 2023).

After the completion of the field assessment, the FATF recognized that the reforms had been effectively implemented, which led to the removal of the Philippines from the list of countries subject to enhanced monitoring.

New FATF report: How can financial intelligence help in the fight against online crime?

The FATF has announced the publication of a new report on the use of financial intelligence to combat online child sexual abuse. Key topics of the report included:

• How financial transactions can expose perpetrators and enable early intervention.
• New red flags and transaction patterns (e.g. prepaid cards, micro-payments).
• Recommendations for increased cooperation and communication between financial institutions and law enforcement agencies.

The full report was published on March 13, 2025.

What changes is the FATF planning? Public consultation

The FATF is currently conducting a consultation to adapt global standards for a risk-based approach and the availability of the financial sector. The planned changes also include Recommendation 16 of the FATF, which aims to improve transparency in the identification of parties to payment transactions by standardizing sender and recipient data.

The aim is to introduce a balance between the speed of transfers and the application of robust AML/CFT mechanisms.

What actions should financial institutions take?

In connection with FATF updates regarding countries on the gray list, financial entities should verify whether it is necessary to adjust or change the accepted levels of risk of individual countries added or removed from the FATF list.

Institutions should also verify whether, as a consequence of the above, the level of financial security measures they apply based on geographical factors remains appropriate.

The next FATF meeting will take place in June 2025.

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