Regulatory Insights

The FATF published on 26 June 2025 itssixth targeted update assessing jurisdictions' implementation of its Recommendation 15 and Interpretative Note (R.15/INR.15), which extend Anti-Money Laundering and CounterTerrorist Financing (AML/CFT) requirements to Virtual Assets and Virtual Asset Service Providers (VASPs). The report finds notable progress among jurisdictions with materially significant VASP activity but identifies several ongoing weaknesses and urgent areas for action.

While most jurisdictions have made efforts to introduce relevant legislation and oversight, FATF stresses persistent challenges in ensuring comprehensive supervision and mitigating cross-border risks:

• Licensing and registration gaps: Difficulties persist in identifying legal or natural persons conducting VASP activities, particularly in offshore settings.
• Travel Rule implementation: 99 jurisdictions have implemented or are in the process of implementing the FATF's Travel Rule. To support this, FATF also publishedBest Practices on Travel Rule Supervision to help
• Emerging illicit finance risks: The misuse of stablecoins by illicit actors has grown rapidly. North Korea (DPRK) has been linked to a record $1.46 billion virtual asset theft from the VASP ByBit, with only 3.8% recovered to date.
• Fraud and scam prevalence: Industry estimates indicate that on-chain fraud and scam-related activity reached approximately $51 billion in 2024, highlighting the escalating threat such activity poses to financial integrity.
• Need for global coordination: Enforcement examples like the UK's Operation Destabilise highlight the importance of international cooperation and asset freezing powers to disrupt sophisticated criminal networks. The FATF underscores that gaps in implementation - particularly among jurisdictions with high VASP activity - could undermine the stability of the global financial system. It urges both public authorities and the private sector to strengthen supervisory frameworks and international coordination to keep pace with evolving risks in the virtual assets ecosystem.

The FATF published on 13 June 2025 itslatest update on jurisdictions under increased monitoring - commonly known as the "grey list". These jurisdictions are actively working with the FATF or FATF-style regional bodies (FSRBs) to resolve identified deficiencies in their anti-money laundering, counter-terrorist financing, and counter-proliferation financing frameworks.

Jurisdictions placed on this list have committed to implementing time-bound action plans and are subject to close scrutiny but are not subject to FATF calls for enhanced due diligence or blanket de-risking. FATF reiterates the importance of a risk-based approach and urges countries to avoid disrupting flows of humanitarian aid, NPO activities, or remittances, in line with UN Security Council Resolution 2761 (2024).

Key points:

• Jurisdictions reviewed since February 2025 include: Angola, Bulgaria, Burkina Faso, Cameroon, Côte d'Ivoire, Croatia, DRC, Haiti, Kenya, Mali, Monaco, Mozambique, Namibia, Nigeria, South Africa, South Sudan, Tanzania, Venezuela, and Vietnam.
• Deferred reporting: Algeria, Lao PDR, Lebanon, Nepal, Syria, and Yemen have opted not to provide updated reporting; previous statements remain applicable but may not reflect current conditions.

FATF continues to encourage jurisdictions to make timely progress on their action plans and reminds all stakeholders that wholesale de-risking contradicts FATF Standards and could undermine financial inclusion and legitimate financial flows.

The FATF reaffirmed on 13 June 2025 itscall for countermeasures or enhanced due diligence against high-risk jurisdictions with serious deficiencies in anti-money laundering, counter-terrorist financing, and counter-proliferation financing frameworks. These countries pose significant risks to the international financial system and are subject to intensified scrutiny.

Jurisdictions subject to countermeasures:

• Democratic People's Republic of Korea (DPRK): Continues to pose serious AML/CFT and proliferation financing (PF) risks. FATF urges full implementation of UN sanctions, including severing correspondent banking ties and closing DPRK bank branches. Renewed emphasis is placed on countermeasures due to increased DPRK financial connectivity and WMD proliferation risks.
• Iran: Remains on the blacklist for failing to fully implement its 2016 action plan. The FATF calls for countermeasures, including increased supervisory scrutiny, transaction reporting, and external audits. The lack of ratification of the Palermo and Terrorist Financing Conventions continues to pose systemic risks.

Jurisdiction subject to enhanced due diligence:

• Myanmar: FATF maintains its 2022 call for enhanced due diligence due to longstanding deficiencies. While some progress was made, FATF warns that countermeasures may be considered if no further improvement is demonstrated by October 2025.

FATF reiterates that jurisdictions should implement these measures proportionate to risk, and must preserve legitimate financial flows, including those related to humanitarian aid, non-profit organisations, and remittances. The FATF also references UNSCR 2761 (2024), which mandates humanitarian carve-outs in sanctions enforcement.

Ajoint Plenary of the Financial Action Task Force (FATF) and MONEYVAL concluded in Strasbourg on 13 June 2025, hosted by the Council of Europe. The meeting brought together delegates from over 200 jurisdictions to discuss global efforts to combat money laundering, terrorist financing, and proliferation financing.

Key outcomes include:

• Strengthening cross-border payments

One of the most significant achievements was the approval of revisions to the FATF Standards, particularly to Recommendation 16. These changes aim to enhance transparency in cross-border payments over USD/EUR 1,000 by clarifying who is sending and receiving funds. The revisions, part of the G20 initiative to improve global payments, also introduce technology-based safeguards against fraud and errors.

The revised standards were formally published on 18 June 2025, with implementation expected by 2030.

Country evaluations and monitoring

• Latvia's Evaluation

• Progress under compliance enhancing procedures

• Updates to increased monitoring ("Grey List")
• Added: Bolivia and the Virgin Islands (UK) are now under increased monitoring due to strategic deficiencies in their AML/CFT/CPF frameworks.
• Removed: Croatia, Mali, and the United Republic of Tanzania were removed from the list, having successfully completed their action plans within the agreed timelines. They will continue engaging with their regional bodies to sustain improvements.

High-risk jurisdictions and strategic concerns

The FATF reiterated its concerns about jurisdictions with serious deficiencies, including Iran, the DPRK, and Myanmar (as previously noted).

The suspension of Russia's FATF membership remains in place. Jurisdictions are reminded to stay alert to emerging risks of sanctions evasion involving Russian entities.

• Financial inclusion and risk-based approach

The FATF endorsed updated guidance to support financial inclusion, aimed at helping providers implement simplified measures where risks are low. This guidance offers practical approaches to managing risks without resorting to de-risking — the blanket refusal of services.

Additionally, a new national risk assessment toolkit was approved, and FATF's mutual evaluation methodology was updated to reflect a stronger focus on how jurisdictions apply risk-based principles in practice.

• Safeguarding civil society

To address the unintended consequences of AML/CFT rules on Non-Profit Organisations (NPOs), the Plenary approved new procedures. These changes aim to ensure that FATF standards are not misapplied in ways that hinder legitimate civil society activity.

• New threat assessments and global guidance

The Plenary greenlit several upcoming publications:

• A comprehensive terrorist financing risk report, the largest to date, with contributions from over 80 jurisdictions.
• A targeted update on virtual assets and service providers, assessing how jurisdictions are implementing related FATF standards.
• A report on complex proliferation financing and sanctions evasion schemes, which will expand existing guidance for both the public and private sectors.

FATF also approved new collaborative guidance — developed with Interpol, the UN Office on Drugs and Crime, and the Egmont Group — to help jurisdictions better investigate and prosecute money laundering cases.

International cooperation and inclusion

On the margins of the Plenary, a donor coordination meeting and a high-level meeting of FATF-style regional body chairs were held to strengthen alignment on technical assistance and reinforce global coordination efforts.

Delegates also welcomed the participation of Kenya, the Cayman Islands, and Senegal as guests - part of FATF's effort to better reflect regional perspectives and promote inclusivity in global standard-setting.

The EU Commission adopted a Delegated Regulation under Article 9(2) of the Fourth Anti-Money Laundering Directive (MLD4) to update the list of highrisk third countries with strategic deficiencies in their Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regimes.

Key changes:

• Added to the high-risk list:

Algeria, Angola, Côte d'Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela.

These jurisdictions pose significant AML/CFT threats to the EU's financial system. All have committed at a high political level to remediate their deficiencies and are working with the Financial Action Task Force (FATF) on implementation plans.

• Removed from the list:

Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda, and the United Arab Emirates (UAE).

These countries have successfully strengthened their AML/CFT frameworks and addressed strategic deficiencies identified by the FATF.

Next steps

The updated list will enter into force 20 days after publication in the EU's Official Journal.

This revision supports the EU's ongoing efforts to protect its financial system and ensure robust AML/CFT standards globally.