Following review, the Financial Activities Task Force (FATF) announced today during their latest plenary in Paris the placement of Democratic Republic of the Congo, Mozambique, and Tanzania on the list of jurisdictions under increased monitoring, popularly to as the “grey list” .

When the FATF places a jurisdiction under increased monitoring, it means the country has committed to swiftly resolving the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.

Assessments take place 3 times a year and in order to have these decisions reversed, the three countries will have to prove through material evidence that all recommendations made by FATF have been complied and that the country no longer has the deficiencies identified by the Task Force.

Reversing the decision (and being removed from the list) is achieved once the country completes a specific action list and depends largely on the complexity and depth of the deficiencies. 

In terms of actual consequences, although DRC, Mozambique and Tanzania will be the subject of higher compliance scrutiny by banks on most financial transactions involving an international operation, such as a wire transfer, market observers noted that there were no determinations pointing to the termination of correspondent banking and other financial relationships none of the 3 countries, rather a risk-based approach will be taken by international operators.

It is important to note, however, that the countries will be under constant monitoring and a lack of progress on the implementation of the recommended action plan could create more serious consequences.

Image courtesy: FATF website