FATF revises grey list: Algeria, Namibia exit; Bosnia and Iraq join, while Iran, North Korea and Myanmar stay blacklisted
Executive summary: The FATF removed Algeria and Namibia from its grey list and added Bosnia-Herzegovina and Iraq, while Iran, North Korea and Myanmar remain on the blacklist. The change alters AML/CFT risk classifications, affecting compliance obligations for banks and governments, and may influence investor perception of the listed jurisdictions.
Who is involved: Financial Action Task Force (FATF), Algeria, Namibia, Bosnia-Herzegovina, Iraq.
Likely next: Further monitoring of remaining blacklisted jurisdictions, possible future list revisions, and increased compliance scrutiny by financial institutions.
The Financial Action Task Force updated its grey list, removing Algeria and Namibia and adding Bosnia-Herzegovina and Iraq, while confirming that Iran, North Korea and Myanmar remain on the blacklist. The change revises AML/CFT risk classifications for the affected jurisdictions and signals heightened scrutiny on jurisdictions perceived as less cooperative. Financial institutions will need to adjust monitoring and reporting practices accordingly.
What's next — scenarios
Compliance Normalization (Base Case) (50%)
Reduced transaction costs and faster settlement times for trade involving Algeria and Namibia.
- Increased FDI inflows to Algeria
- Lowered risk premiums for Namibian banks
Heightened Friction & Scrutiny (Downside) (35%)
Increased operational costs for banks managing correspondent relationships in Bosnia and Iraq.
- New AML/CFT audit requirements from EU/US regulators
- Slowdown in cross-border payments to Iraq
Systemic Risk Escalation (Blacklist Drift) (15%)
Extreme liquidity constraints and heightened sanctions risk for entities with ties to blacklisted jurisdictions.
- Secondary sanctions on entities linked to Iran
- Increased volatility in North Korean-linked maritime trade
What to watch
- FATF follow-up reports on Bosnia-Herzegovina (next 60 days)
- Central Bank of Iraq regulatory updates on AML protocols (next 30 days)
- Compliance budget adjustments in MENA-focused banks (next 90 days)
Analysis — what this means
Likely next events
- Banks intensify AML checks on remaining grey‑list jurisdictions
- Investor sentiment toward Iran’s market could shift if peace talks advance
Sectors affected
- Banking
- FinTech
- International Trade
- Compliance Services
Regulatory implications
- Enhanced monitoring of high‑risk jurisdictions
- Potential updates to EU AML directives
- Greater diplomatic pressure on listed countries to meet FATF standards
Historical parallels
- 2019 FATF revision that removed Pakistan and Trinidad & Tobago
- Early 2000s removal of Israel after reforms