Updating the list of jurisdictions to be monitored according to FATF standards

The recent FATF plenary meeting on February 21-23, 2024 established several updates to the list of risky jurisdictions. We present them to you so that you can evaluate which jurisdiction is best suited for opening a reliable business that will bring stable profits. There are many nuances to consider — from the taxation system to the national mentality and market. But the government's intransigent attitude to money laundering is becoming increasingly important. 

WARNING! Highest Risk!"

Jurisdictions Under Enhanced Monitoring

The FATF has added Kenya and Namibia to the list of jurisdictions under enhanced monitoring at this plenary meeting. The African continent has the highest number of countries on the list. 

“Gray Jurisdictions”

This is an intermediate option, it is where countries that are actively cooperating with the regulator to address deficiencies fall. Among the shortcomings can be quite “innocuous”, for example, the use of cash in real estate. This is the reason why, for example, a well-to-do country like Croatia fell into this category in June 2023. It is quite easy to get from this list to “white”. 

Jurisdictions that are no longer under enhanced scrutiny

Barbados, Gibraltar, Uganda and the United Arab Emirates are now on the list of countries that are not subject to enhanced scrutiny. They have made significant progress in countering crime. These countries were visited by FATF representatives, which made it possible to show significant progress. So the option of doing business in the Emirates has become more attractive, especially given the favorable fiscal policy of this country. In this way, illegal schemes are disguised. Illegal arms and drug trafficking and bribery thrive in countries that FATF classifies as high risk. Doing business in these jurisdictions can be extremely damaging to your reputation. Serious companies will not want to do business with you.

The number of FATF members was expanded during 1991 and 1992, from 16 before its creation to 28.FATF has updated the Forty Recommendations to reflect the changes that have occurred in the money laundering industry. This process of change is still taking place. Therefore, some countries are attached to the special attention list and others are improving their ranking. The future threats, the rapid development of the digital world and the increase of related dangers, illegal acts are taken into account. Changes are being made accordingly. 

How is the financial sector responding to the guidance provided?

Special attention is being paid to the importance of banks reporting suspicious transaction data. Banks prefer to know as much as possible about their customers, develop a personal profile of them, gain insight into their sources of income and are increasingly interested in such sources. 

The recommendations include options such as financial system optimization and international cooperation. Characteristics of such recommendations:

• Not difficult to implement;
• Not threaten economic development;
• No obstacles to the freedom to conduct legitimate transactions.

When choosing a jurisdiction to do business, be careful. Gather maximum information and assess the risks. It is professional analytics that matter most at the stage of business creation. We apply a risk-oriented approach. Legal Solutions consultants will help you, guide you and give arguments why this country is better than others. However, it is up to you. It is also worth considering the fact that the topic of protection against money laundering is becoming increasingly loud in Ukraine. In a few decades, or even years, a financial and economic system will be created that will eliminate this possibility. And governments have more and more tools for this purpose.

Therefore, the transition to legal business becomes the only possible way. Contact our consultants to open a foreign company without red tape.