On 13 June 2025, the Financial Action Task Force (FATF) released its latest update on jurisdictions under increased monitoring (commonly referred to as the grey list) and those subject to a call for action (the black list) [1] [2]. These lists are critical tools for identifying countries with strategic deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CFT) regimes.
For small law firms and sole practitioners, understanding the implications of these lists is essential. Whether you’re advising clients on international transactions, handling cross-border funds, or conducting AML checks, the FATF lists directly impact your risk assessments, due diligence obligations, and compliance with SRA AML guidance.
What Are the FATF Grey and Black Lists?
The FATF publishes two key lists three times a year:
- Grey List (Jurisdictions under Increased Monitoring): Countries that have committed to resolving strategic AML/CFT deficiencies within agreed timeframes. These jurisdictions are actively working with the FATF and are subject to ongoing monitoring[3].
- Black List (High-Risk Jurisdictions Subject to a Call for Action): Countries with serious strategic deficiencies. The FATF calls on all jurisdictions to apply enhanced due diligence and, in some cases, countermeasures to protect the international financial system [2].
FATF Grey List – June 2025 Update
As of 13 June 2025, the following countries remain on the grey list [1] [3]:
- Africa: Algeria, Angola, Burkina Faso, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Kenya, Mozambique, Namibia, Nigeria, South Africa, South Sudan
- Asia: Lao PDR, Lebanon, Nepal, Syria, Vietnam, Yemen
- Europe: Bulgaria, Monaco
- Americas: Bolivia, Haiti, Venezuela, Virgin Islands (UK)
Notably, Croatia, Mali, and Tanzania have been removed from the grey list, having made sufficient progress in addressing their deficiencies [1].
These jurisdictions are not subject to FATF-mandated enhanced due diligence, but firms are encouraged to apply a risk-based approach when dealing with clients or transactions involving these countries.
FATF Grey List – June 2025
- Africa:
- Algeria
- Angola
- Burkina Faso
- Cameroon
- Côte d’Ivoire
- Democratic Republic of the Congo
- Kenya
- Mozambique
- Namibia
- Nigeria
- South Africa
- South Sudan
- Asia:
- Lao People’s Democratic Republic (Lao PDR)
- Lebanon
- Nepal
- Syria
- Vietnam
- Yemen
- Europe:
- Bulgaria
- Monaco
- Americas:
- Bolivia
- Haiti
- Venezuela
- Virgin Islands (UK)
FATF Black List – June 2025 Update
The black list includes countries with significant AML/CFT deficiencies and limited progress in addressing them. As of June 2025, the following jurisdictions are listed [2] [3]:
- Democratic People’s Republic of Korea (North Korea)
- Iran
- Myanmar
For these countries, the FATF urges all jurisdictions to apply enhanced due diligence and, where appropriate, countermeasures. This may include:
- Terminating correspondent banking relationships
- Limiting financial transactions
- Increasing external audit requirements
What This Means for Small Law Firms and Sole practitioners
1. Enhanced Risk Assessments
If your firm handles matters involving clients, counterparties, or funds linked to grey or black list jurisdictions, you must update your Practice-Wide Risk Assessment (PWRA) and matter-level risk assessments accordingly.
Action point: Include FATF-listed jurisdictions as a specific risk factor. Document how your firm identifies and mitigates risks associated with these countries.
2. Client Due Diligence (CDD) and Source of Funds Checks
The FATF encourages a risk-based approach, not blanket de-risking. This means firms should assess each client and transaction individually, considering:
- Country of origin
- Nature of the transaction
- Beneficial ownership
- Source of funds and wealth
Action point: For clients linked to grey or black list jurisdictions, conduct enhanced CDD. This may include verifying additional documents, conducting open-source checks, and seeking independent verification of source of funds.
3. Compliance with SRA AML Guidance
The Solicitors Regulation Authority (SRA) expects firms to incorporate FATF guidance into their AML frameworks. The April 2025 LSAG update and the SRA’s 2025/26 Business Plan both emphasise the importance of international AML risk awareness.
Action point: Review your AML policies to ensure they reference the FATF lists and outline procedures for dealing with high-risk jurisdictions.
4. Ethical and Humanitarian Considerations
The FATF explicitly states that its standards do not support de-risking or cutting off entire classes of customers. Instead, firms should ensure that legitimate activities—such as humanitarian aid, NPO operations, and remittances—are not disrupted [1].
Action point: Train staff to distinguish between high-risk and legitimate financial flows. Ensure your compliance decisions are proportionate and ethically sound.
5. Monitoring and Ongoing Due Diligence
Clients and transactions involving FATF-listed jurisdictions require ongoing monitoring. This includes:
- Regular reviews of client profiles
- Monitoring transaction patterns
- Updating risk assessments as new FATF updates are published
Action point: Set calendar reminders to review FATF updates every February, June, and October. Adjust your firm’s AML procedures accordingly.
Practical Scenarios for Small Firms
Scenario 1: Property Purchase by a Client from a Grey List Country
A client from Nigeria (on the grey list) wants to purchase property in the UK. Your firm must:
- Conduct enhanced CDD
- Verify the source of funds
- Assess the client’s risk profile
- Document all decisions and rationale
Scenario 2: Commercial Contract Involving a Black List Jurisdiction
Your firm is asked to draft a contract involving a company based in Iran. You must:
- Apply enhanced due diligence
- Consider whether countermeasures are required
- Consult the SRA or a compliance expert if unsure
- Possibly decline the matter if risks cannot be mitigated
Next Steps for Compliance
- Review the FATF Lists
Visit the FATF website to access the latest grey and black list updates. - Update Your AML Framework
Ensure your AML manual, risk assessments, and CDD procedures reflect the June 2025 FATF guidance. - Train Your Team
Provide training on FATF lists, risk-based approaches, and ethical considerations in AML compliance. - Monitor Transactions and Clients
Use technology or manual systems to flag transactions involving high-risk jurisdictions. - Seek Expert Advice When Needed
If you’re unsure how to handle a matter involving a FATF-listed country, consult with a compliance specialist or the SRA.
Final Thoughts
The FATF grey and black lists are essential tools for managing AML risk in the legal sector. For small law firms and sole practitioners, the June 2025 update is a timely reminder to stay vigilant, apply a risk-based approach, and ensure your AML systems are robust and responsive.
By understanding the implications of these lists and embedding them into your compliance framework, you not only meet regulatory expectations—you also protect your firm, your clients, and your reputation.
References
[1] Jurisdictions under Increased Monitoring – 13 June 2025
[2] High-Risk Jurisdictions subject to a Call for Action – 13 June 2025