Monaco and Venezuela Face Potential Gray Listing for Money Laundering

June 24, 2024

The Financial Action Task Force (FATF) may put Monaco and Venezuela on its “gray list”  due to potential failings to comply with FATF standards for combating money laundering.

Monaco is expected to join the list soon if regulators suspect the country needs to make more progress in prosecuting financial crimes as reported by Bloomberg. Monaco, recognized for its richness and riches, struggles with money laundering. European watchdogs criticized Monaco’s efforts, citing a lack of financial crime reporting and investigations.

Venezuela, which is currently subject to US sanctions, is also at risk of being put on the grey list. According to the CFATF mutual evaluation report from 2023,  Venezuela has not made enough progress in halting the flow of illicit money. Compliance with FATF’s recommendations is important as countries on the grey list face increased scrutiny and foreign investors become more cautious. This presents new challenges for Venezuela, which already faces strict compliance requirements due to existing sanctions. Venezuela has been facing concerns about its large informal economy and its relationship with the Iranian government.

FATF Plenary

The sixth Financial Action Task Force (FATF) plenary, chaired by Mr. Rajakumar, will be held in Singapore from June 26 to 28. Over 200 member and observer organizations, including the IMF, United Nations, World Bank, Interpol, and representatives of the Egmont Group, will attend the meeting.

Key issues to be discussed include changes in assessment methods, asset recovery, and the development of international cooperation frameworks. Participants will discuss the priority criteria for assessing countries with strategic deficiencies in their AML/CFT regimes and the progress of some jurisdictions that threaten the global financial system. Mutual assessment reports of India and Kuwait will also be reviewed.

The FATF will announce its decision on June 28. The potential additions of Monaco and Venezuela highlight the FATF’s focus on improving the global financial system.