The Financial Action Task Force (FATF) released its latest update on 19 June 2026, declaring changes to its list of jurisdictions under increased monitoring, commonly known as the FATF Grey List. These updates are closely monitored by governments, financial institutions, multinational businesses, and compliance professionals because they directly influence international financial transactions, investment decisions, and anti-money laundering (AML) obligations.
The June 2026 Plenary resulted in two countries being added to the Grey List and two countries being removed after demonstrating significant progress in strengthening their anti-money laundering and counter-terrorist financing (AML/CFT) frameworks. While the changes appear limited in number, they carry considerable significance for global financial stability and regulatory compliance.
Highlights of the June 2026 FATF Update
During the June 2026 Plenary, the FATF announced the following changes:
Countries added to the Grey List
- Bosnia and Herzegovina
- Iraq
Countries removed from the Grey List
- Algeria
- Namibia
The update reflects the FATF’s continuous assessment of national AML/CFT frameworks and its emphasis on measurable implementation rather than merely adopting legislation.
Why Bosnia and Herzegovina Was Added
Bosnia and Herzegovina entered the Grey List after the FATF identified several strategic weaknesses in its AML/CFT regime. According to the FATF, the country must strengthen safeguards against the misuse of its financial system by criminals and terrorist organisations while improving supervision of its banking sector.
The country has committed to implementing reforms through a structured action plan under FATF monitoring. These reforms are expected to improve regulatory oversight, financial intelligence, and enforcement capabilities.
Why Iraq Was Added
Iraq was also added to the Grey List following concerns regarding the effectiveness of its AML/CFT framework.
The FATF identified several priority areas requiring improvement, including:
- Addressing risks associated with large cash transactions.
- Increasing investigations into money laundering and terrorist financing.
- Enhancing the use of financial intelligence.
- Strengthening enforcement mechanisms.
Iraq has agreed to work with the FATF to implement the required reforms within agreed timelines. The objective is to build a more transparent and resilient financial system capable of detecting and preventing illicit financial activities.
Algeria and Namibia Exit the Grey List
The June 2026 update also recognised the substantial progress made by Algeria and Namibia.
Both countries successfully completed their respective FATF action plans and demonstrated that they had implemented the necessary legal, regulatory, and operational reforms. Following on-site assessments, the FATF concluded that the reforms were sustainable and removed both jurisdictions from increased monitoring.
Removal from the Grey List is a significant achievement. It signals stronger AML/CFT controls, enhances international confidence, and can improve access to global financial markets. Nevertheless, the FATF expects these countries to maintain the effectiveness of their reforms through continuous monitoring and enforcement.
Current FATF High-Risk Jurisdictions
While the Grey List was updated, the FATF did not make significant changes to its list of High-Risk Jurisdictions Subject to a Call for Action during the June 2026 Plenary. These jurisdictions, commonly referred to as the Black List, continue to face the highest level of scrutiny due to serious strategic deficiencies in their AML/CFT regimes.
Countries on the Black List remain subject to enhanced due diligence and, where appropriate, countermeasures by FATF members.
The Relevance of the Grey List
Although Grey Listing does not result in sanctions, it has important economic and regulatory implications.
Financial institutions generally apply enhanced due diligence when dealing with customers or transactions linked to Grey Listed jurisdictions. Businesses operating internationally may experience increased compliance requirements, additional documentation requests, and longer transaction processing times.
Countries on the Grey List may also encounter reduced investor confidence, higher borrowing costs, and greater scrutiny from correspondent banks. These factors can affect trade, foreign investment, and overall economic growth.
Conversely, removal from the Grey List often improves a country’s international reputation and demonstrates its commitment to strengthening financial integrity.
A Growing Focus on Effectiveness
One of the most notable trends in recent FATF evaluations is the shift from technical compliance to practical effectiveness.
Earlier assessments primarily examined whether countries had enacted the required AML/CFT laws and regulations. Today, the FATF increasingly evaluates whether these measures are producing measurable outcomes.
This includes assessing:
- The effectiveness of financial intelligence units.
- Successful money laundering investigations.
- Terrorist financing prosecutions.
- Asset recovery mechanisms.
- Beneficial ownership transparency.
- Risk-based supervision of financial institutions.
- Implementation of targeted financial sanctions.
This approach encourages jurisdictions to move beyond legislative reforms and demonstrate real-world enforcement.
What Compliance Professionals Should Consider
The June 2026 update reinforces the need for organisations to maintain dynamic country risk assessments.
Financial institutions, designated non-financial businesses and professions (DNFBPs), fintech companies, and multinational organisations should promptly review customer on boarding procedures, transaction monitoring systems, and enhanced due diligence measures in response to FATF updates.
Risk assessment frameworks should reflect changes in jurisdictional status, while compliance teams should continue monitoring future FATF announcements issued during the organisation’s February, June, and October plenary meetings.
Remaining aligned with FATF guidance not only helps organisations meet regulatory obligations but also reduces exposure to financial crime risks.
The June 2026 FATF Grey List update demonstrates the organisation’s ongoing commitment to strengthening global AML/CFT standards through continuous monitoring and international cooperation.
The addition of Bosnia and Herzegovina and Iraq underscores areas where further reforms are required, while the removal of Algeria and Namibia illustrates that sustained political commitment and effective implementation can lead to successful completion of FATF action plans.
As financial crime continues to evolve, FATF evaluations are expected to place even greater emphasis on measurable effectiveness, international cooperation, beneficial ownership transparency, and the use of financial intelligence.
For governments, businesses, and compliance professionals alike, keeping pace with FATF developments remains essential. The Grey List is more than a monitoring mechanism, it serves as an important indicator of a jurisdiction’s commitment to safeguarding the integrity of the global financial system and combating money laundering, terrorist financing, and proliferation financing through effective and sustainable reforms.
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