FATF Grey List & Blacklist Countries [2026] — Updated Complete Guide

The FATF grey list (Jurisdictions Under Increased Monitoring) currently contains 23 countries as of the February 2026 plenary, including Algeria, Bulgaria, Kenya, Syria, Venezuela, and Vietnam. The FATF blacklist (High-Risk Jurisdictions) contains Iran, North Korea, and Myanmar. Being on either list has serious consequences for banking access, trade finance, and AML compliance obligations.

The Financial Action Task Force (FATF) lists are among the most consequential risk indicators in international finance. Banks apply automatic enhanced due diligence to grey-listed countries; blacklisted countries face near-total correspondent banking isolation. For businesses operating in or with these jurisdictions, understanding the full current lists — and what they mean in practice — is essential for compliance and operational planning. Our sanctions compliance counsel advises clients operating across high-risk jurisdictions on combined FATF and OFAC compliance requirements.

What Is FATF and Why Do Its Lists Matter?

The Financial Action Task Force is an intergovernmental body established in 1989 by the G7 to develop standards for combating money laundering and terrorist financing. FATF currently has 39 members (37 member jurisdictions plus the European Commission and Gulf Cooperation Council) and its recommendations are adopted as law or regulation in most countries worldwide.

FATF’s influence on banking is profound. When FATF identifies a country as having strategic AML/CFT deficiencies, correspondent banks worldwide — regardless of FATF membership — immediately apply enhanced due diligence and often restrict transactions with that country. The reputational and financial costs of listing are severe and immediate, often exceeding the direct regulatory consequences.

FATF updates its lists three times per year after plenary sessions held in February, June, and October. Businesses must track updates regularly — a country can move from clean to grey-listed (or vice versa) within months. Always verify current lists at fatf-gafi.org. For combined FATF and economic sanctions analysis, consult our team — the two regimes frequently overlap and must be assessed together.

The FATF Blacklist (2026): High-Risk Jurisdictions

The FATF blacklist — formally titled “High-Risk Jurisdictions Subject to a Call for Action” — currently contains three countries: Iran, North Korea (DPRK), and Myanmar. The blacklist has not changed since Myanmar’s addition in 2022.

Blacklisted countries face the most severe FATF-mandated responses. FATF calls on its members to apply enhanced due diligence proportionate to the risk and, in the most serious cases, countermeasures — which can include restricting or prohibiting financial transactions entirely. For Iran and North Korea, FATF countermeasures effectively reinforce the what it means to be sanctioned reality: banking access is virtually impossible through the formal international system.

Iran on the FATF Blacklist

Iran has been on the FATF blacklist continuously since 2008. FATF has repeatedly cited Iran for: failure to criminalize terrorist financing adequately; failure to implement FATF recommendations; and active use of the financial system to circumvent international sanctions. Iran’s FATF blacklisting compounds its comprehensive OFAC sanctions exposure — any business attempting to transact with Iran faces both FATF countermeasures (applied by banks globally) and direct OFAC prohibition for U.S.-nexus transactions. An Iran sanctions lawyer can help businesses navigate this dual-regime landscape.

North Korea on the FATF Blacklist

North Korea’s inclusion reflects systemic AML/CFT failures, active state sponsorship of cybercrime and cryptocurrency theft, and refusal to engage with FATF. The Lazarus Group and affiliated hacking organizations have stolen billions in cryptocurrency to fund the DPRK weapons program — all of which constitutes proceeds of crime requiring AML countermeasures. North Korea sanctions under OFAC’s NKSR regime independently prohibit virtually all transactions — FATF blacklisting adds a layer of AML-based restrictions that apply even to the rare transactions not already OFAC-prohibited.

Myanmar on the FATF Blacklist

Myanmar was added to the FATF blacklist in October 2022 following the February 2021 military coup. The coup dismantled Myanmar’s AML/CFT compliance infrastructure, and the military junta — itself subject to targeted OFAC sanctions under EO 14014 — has shown no willingness to re-engage with FATF. Myanmar’s blacklisting has effectively cut off formal banking channels for most Myanmar-related transactions, even those involving private sector counterparties not subject to OFAC designations.

The FATF Grey List (2026): Current 23 Countries

The FATF grey list — formally “Jurisdictions Under Increased Monitoring” — as of the February 2026 plenary includes 23 jurisdictions. These countries have committed to resolving identified AML/CFT deficiencies but have not yet done so:

Recent Changes: What’s New in 2025-2026

FATF made several significant changes at its most recent plenary sessions:

• February 2026 (Added): Kuwait and Papua New Guinea were added to the grey list.
• October 2025 (Removed): Burkina Faso, Mozambique, Nigeria, and South Africa were removed from the grey list after demonstrating sufficient progress on their action plans. South Africa’s removal was particularly notable — it had only been listed since 2023 and its rapid exit reflects robust AML reforms.
• June 2025 (Added): Bolivia and British Virgin Islands (UK territory) were added. (Croatia, Mali, and Tanzania were removed in the same session.)
• February 2025 (Added): Laos and Nepal were added. (Philippines was removed after successfully completing its action plan.)

These changes illustrate that FATF listing is dynamic — countries can and do exit the grey list through demonstrated reform. For businesses, this means compliance teams must monitor FATF updates at every plenary cycle and adjust their risk frameworks accordingly. Our FATF grey list guide provides detailed analysis of each country’s listing and expected timeline for exit.

What FATF Grey Listing Means for Businesses

FATF grey listing does not legally prohibit transactions. However, its practical banking consequences can be as severe as a legal prohibition. Understanding the impact at each level is essential for any business with grey-listed country exposure.

Enhanced Due Diligence (EDD) Requirements

The primary legal consequence of grey listing is mandatory enhanced due diligence. Under FATF Recommendation 19 and its implementing legislation in most jurisdictions, financial institutions must apply EDD to business relationships and transactions involving grey-listed countries. EDD requirements typically include:

• Verification of the full beneficial ownership chain — identifying ultimate beneficial owners and their source of wealth
• Enhanced source-of-funds documentation for all significant transactions
• Senior management approval for establishing new business relationships with grey-listed country counterparties
• Ongoing monitoring of existing relationships at a higher intensity
• Transaction purpose documentation for cross-border payments
• Periodic relationship reviews — more frequent than for standard-risk counterparties

The cost and burden of EDD is significant. Processing times increase, documentation requirements multiply, and some transactions may be declined as too burdensome to process even when legally permissible. Businesses that regularly transact with grey-listed jurisdictions should maintain pre-prepared EDD documentation packages to reduce delays. Our sanctions screening services include EDD workflow design for high-risk jurisdiction transactions.

Correspondent Banking Impacts

The most severe practical consequence of grey listing is correspondent banking de-risking. Correspondent banks — large international banks that provide cross-border payment services to smaller domestic banks — are increasingly unwilling to maintain relationships with banks in grey-listed jurisdictions, even where transactions are legally permissible.

The dynamics of correspondent banking de-risking are well documented by the World Bank and BIS: grey-listed country banks face higher compliance costs (passed on as fees), reduced correspondent banking options, longer transaction settlement times, and in the most affected cases, complete loss of correspondent banking access forcing reliance on informal money transfer channels.

Quantitatively, transactions involving grey-listed jurisdictions typically face 3-4% cost premiums versus equivalent transactions in clean jurisdictions — a significant cost for trade finance and remittances. For businesses relying on frequent small-value transactions with grey-listed countries, this can represent a material competitive disadvantage.

Trade Finance and Letters of Credit

Trade finance involving grey-listed jurisdictions faces enhanced scrutiny from confirming and issuing banks. Letters of credit, documentary collections, and guarantees involving grey-listed country counterparties require additional documentation and senior credit approval. Some confirming banks decline to confirm LCs from grey-listed country issuing banks entirely. This is particularly problematic for importers and exporters in affected jurisdictions who rely on trade finance for working capital.

Investment and Capital Markets

Grey listing creates investment risk premiums and capital market access difficulties. International investors apply higher risk discounts to investments in grey-listed jurisdictions. Credit rating agencies factor grey listing into sovereign and corporate credit assessments. Access to international capital markets — particularly for sovereign debt issuance — becomes more expensive or impossible during the listing period.

How Countries Get Listed and Delisted by FATF

Understanding the FATF listing process helps businesses anticipate future changes and assess whether a current listing will be short-lived or prolonged.

How Countries Get Listed

FATF evaluates countries through its Mutual Evaluation Review (MER) process, which examines both technical compliance (whether the country has enacted required laws) and effectiveness (whether those laws actually work to combat financial crime). Countries that receive poor effectiveness ratings in key areas — particularly relating to money laundering, terrorist financing, or proliferation financing — are placed under enhanced follow-up and may ultimately be identified for Increased Monitoring (grey list).

The process from evaluation to listing typically takes 12-24 months. FATF initially engages privately with the country, offering an action plan and a timeframe for reform. Grey listing follows if progress is insufficient. Blacklisting occurs when a country fails to engage meaningfully with FATF or poses a threat to the international financial system.

How Countries Get Delisted

Exit from the grey list requires completing all items on the country’s FATF action plan to a level sufficient for FATF to determine that the identified deficiencies have been addressed. The process involves: implementing required legislative and regulatory reforms; demonstrating that new frameworks are operationally effective; on-site verification by FATF; and reporting to FATF’s plenary for a final vote.

The timeline from listing to delisting varies significantly. Countries with strong political will and administrative capacity can exit within 2-3 years (e.g., Philippines, which was listed in 2021 and delisted in early 2025). Countries with deeper institutional challenges may remain listed for 5+ years. Blacklisting exit requires not just reform but a fundamental restructuring of national AML/CFT systems — Iran and North Korea have not made progress toward delisting in over a decade.

FATF vs. OFAC: How They Interact

FATF listing and OFAC sanctions are legally separate regimes — one is an intergovernmental AML/CFT standard-setting body; the other is a U.S. government enforcement agency. However, they frequently overlap in practice and must both be analyzed for any high-risk jurisdiction transaction.

Convergence points: Iran and North Korea appear on both the FATF blacklist and face comprehensive OFAC sanctions — dual prohibition that effectively eliminates virtually all formal financial transactions. Venezuela appears on the FATF grey list and faces targeted OFAC sanctions. Syria appears on both the FATF grey list and faces comprehensive OFAC sanctions. Myanmar is on the FATF blacklist and faces targeted OFAC sanctions.

Divergence points: Many FATF grey-listed countries are NOT subject to OFAC sanctions — for example, Bulgaria, Monaco, Laos, Nepal, and Namibia. Conversely, some OFAC-targeted countries (e.g., Belarus, Nicaragua, Sudan) are not currently on the FATF grey list. This means that a transaction may require FATF-related EDD but be OFAC-clean, or be OFAC-restricted but not trigger FATF EDD.

For comprehensive compliance analysis covering both frameworks, our OFAC lawyers and international sanctions team provides dual-regime assessments. We also work with EU sanctions lawyers to cover the full multilateral sanctions landscape for clients operating across jurisdictions.

AML Compliance Requirements for Grey-Listed Country Operations

Businesses that regularly operate in or with grey-listed countries should maintain the following AML compliance infrastructure:

• Updated country risk framework: Formal documentation classifying grey-listed (and blacklisted) jurisdictions as high-risk, with enhanced due diligence procedures applicable to all transactions
• Beneficial ownership registry: Systems to identify and verify full beneficial ownership chains for all counterparties from grey-listed jurisdictions
• Transaction monitoring: Automated monitoring for unusual transaction patterns from high-risk jurisdictions, with manual review thresholds set lower for grey-listed country transactions
• Source of funds documentation: Standard collection of source-of-funds and source-of-wealth documentation for all significant transactions with grey-listed counterparties
• Ongoing monitoring: More frequent reviews of existing customer relationships with grey-listed country nexus
• Senior management oversight: Approval processes for new high-value relationships with grey-listed country counterparties
• Sanctions screening: Combined Specially Designated Nationals list screening plus UN Security Council list screening for all grey-listed country counterparties

Many businesses also maintain PEP screening and adverse media monitoring for counterparties from grey-listed jurisdictions. Politically Exposed Persons from grey-listed countries represent heightened corruption and AML risk, and their transactions require particularly careful documentation. Professional World-Check screening services provide comprehensive PEP and sanctions database access for onboarding and ongoing monitoring.

Key Countries to Watch: Grey List Outlook 2026

Several grey-listed countries are at inflection points in their FATF compliance journeys:

• Bulgaria (listed June 2023): The EU member state’s grey listing has triggered significant pressure from the European Commission and ECB. Bulgaria is implementing AML reforms to exit the list, but challenges in the banking sector and judicial effectiveness remain.
• Syria (listed Feb 2026 grey list, previously delisted after brief 2024 assessment): Syria’s AML framework collapsed with the fall of the Assad regime. The transitional government is engaging with FATF but reforms will take years. Syria also faces comprehensive OFAC sanctions, making it one of the most complex high-risk jurisdictions.
• Venezuela (listed Feb 2020): Venezuela has been on the grey list for over 5 years. The combination of FATF grey listing and targeted Venezuela sanctions under OFAC makes transacting with Venezuela exceptionally complex. No near-term exit from the grey list is expected.
• Kuwait and Papua New Guinea (listed Feb 2026): Both countries were newly added at the February 2026 plenary. Businesses with existing operations in these jurisdictions should immediately assess and upgrade their EDD procedures.

For a comprehensive analysis of any specific country’s FATF status and the combined OFAC/FATF/international sanctions landscape, our experienced sanctions attorney team provides country-specific risk assessments and compliance guidance.

Frequently Asked Questions: FATF Grey List and Blacklist

Which countries are on the FATF blacklist in 2026?

The FATF blacklist contains three countries as of February 2026: Iran, North Korea (DPRK), and Myanmar. The blacklist has not changed since Myanmar’s addition in October 2022. Both Iran and North Korea also face comprehensive OFAC sanctions.

Does FATF grey listing mean transactions are illegal?

No — FATF grey listing does not create a legal prohibition on transactions. It creates an obligation to apply enhanced due diligence (EDD) when dealing with grey-listed country counterparties. However, in practice, many banks apply de-risking policies that effectively restrict or refuse transactions with grey-listed jurisdictions even where they are legally permissible. For OFAC-related legal prohibitions, see our guide on OFAC sanctioned countries list.

How often does FATF update its lists?

FATF updates its grey list and blacklist three times per year following plenary sessions held in February, June, and October. Changes take effect immediately upon publication. Businesses must track FATF updates at each plenary cycle and adjust risk frameworks accordingly — a country can be added or removed without advance notice to the business community.

How does FATF grey listing interact with OFAC sanctions?

They are legally separate. FATF listing creates AML/CFT compliance obligations (EDD) globally, regardless of any U.S. sanctions nexus. OFAC sanctions create legal prohibitions applicable to U.S. persons and parties with U.S. financial nexus. Both must be assessed independently. Some jurisdictions (Iran, North Korea, Venezuela, Syria, Myanmar) face both FATF listing and OFAC sanctions simultaneously, creating compounded compliance complexity. Our AML and OFAC compliance practice covers both frameworks comprehensively.

What should my company do if a new country is added to the FATF grey list?

Immediately: (1) reclassify the country as high-risk in your risk framework; (2) apply EDD procedures to all existing and new relationships with counterparties from that country; (3) notify relevant business lines of the change; (4) review and update customer risk ratings for affected accounts; and (5) enhance transaction monitoring thresholds for the affected jurisdiction. Our OFAC compliance program service includes FATF-integrated country risk frameworks that automatically update when FATF list changes are published.