The FATF grey list June 2026 update brings significant changes that every compliance team needs to act on. On 19 June 2026, the Financial Action Task Force (FATF) concluded its sixth Plenary under Mexico’s presidency in Paris, adding Iraq and Bosnia and Herzegovina to the list of jurisdictions under increased monitoring while removing Algeria and Namibia. For compliance officers at banks, fintechs, crypto exchanges and designated non-financial businesses and professions (DNFBPs), these changes demand immediate attention. Risk assessments need updating, customer screening processes require recalibration and enhanced due diligence procedures may need revision. This article breaks down what changed, why it matters and what your compliance team should do next.
| Compliance area | Key requirement | Why it matters |
|---|---|---|
| Grey list additions (Iraq, Bosnia and Herzegovina) | Review risk ratings and apply proportionate due diligence | New jurisdictional risks affect customer onboarding and transaction monitoring |
| Grey list removals (Algeria, Namibia) | Calibrate risk scores and refine restrictions. | Outdated risk ratings can lead to unjustified de-risking and lost business |
| Recommendation 6 update | Incorporate humanitarian exemptions into sanctions screening | Sanctions must not block humanitarian aid under UNSCR 2664 and 2761 |
| Recommendation 16 consultation | Prepare for strengthened cross-border payment transparency | New guidance will reshape originator and beneficiary information requirements |
| UK presidency priorities | Expect greater focus on fraud, risk-based supervision and information sharing | Regulatory expectations will shift toward effectiveness over box-ticking |
What changed on the FATF grey list in June 2026
The grey list, formally known as the list of “jurisdictions under increased monitoring,” now includes 22 countries. Two were added and two were removed at the June 2026 Plenary.
Iraq: gaps in supervision and terrorism financing controls
Iraq’s addition to the FATF grey list June 2026 follows a review that identified several strategic deficiencies. According to the FATF, Iraq’s weaknesses include inadequate risk-based supervision of financial institutions and DNFBPs, limited capacity for asset recovery and shortcomings in targeting terrorism financing and proliferation financing risks.
Iraq has committed to working with MENAFATF (the Middle East and North Africa Financial Action Task Force) to implement an action plan addressing these gaps within agreed timeframes. For compliance teams, this means any existing business relationships or transactions involving Iraqi counterparties should be reassessed against a heightened risk profile. Transaction monitoring rules may need recalibration to flag patterns associated with terrorism financing and sanctions evasion.
Bosnia and Herzegovina: fragmented governance and weak enforcement
Bosnia and Herzegovina’s grey listing followed a MONEYVAL mutual evaluation that exposed serious structural challenges. The evaluation flagged fragmented governance across the country’s complex political system, missing state-level AML legislation and weak money laundering and terrorist financing investigations.
Like Iraq, Bosnia and Herzegovina has made a high-level political commitment to address these deficiencies. However, the structural nature of the problems, particularly the lack of unified state-level legislation, suggests that meaningful progress may take time. Compliance teams dealing with Balkan correspondent banking relationships or trade flows should factor this into their risk assessments.
Why Algeria and Namibia were removed
Removals from the grey list deserve just as much attention as additions. Algeria and Namibia both completed their FATF action plans and passed on-site verification visits, earning their exits from increased monitoring.
Algeria strengthened its framework across risk-based supervision, beneficial ownership transparency and targeted financial sanctions. The country will continue working with MENAFATF to sustain these improvements. Namibia enhanced risk-based supervision in both financial and non-financial sectors while increasing investigations and prosecutions of serious and complex money laundering cases. Namibia will continue its engagement with ESAAMLG (the Eastern and Southern Africa Anti-Money Laundering Group).
For firms that had applied blanket enhanced due diligence or de-risking measures to clients from these jurisdictions, this is the time to review those decisions. The FATF consistently warns against indiscriminate de-risking and maintaining disproportionate restrictions on jurisdictions that have been removed from the grey list could expose your firm to regulatory criticism for not applying a genuinely risk-based approach.
The full FATF grey list as of June 2026
The 22 jurisdictions currently under increased monitoring are: Angola, Bolivia, Bosnia and Herzegovina, Bulgaria, Cameroon, Cote d’Ivoire, Democratic Republic of Congo, Haiti, Iraq, Kenya, Kuwait, Laos, Lebanon, Monaco, Nepal, Papua New Guinea, South Sudan, Syria, Venezuela, Vietnam, British Virgin Islands and Yemen.
The FATF black list (jurisdictions subject to a call for action) remains unchanged at three: Iran, North Korea and Myanmar. These jurisdictions carry the highest level of risk and the FATF calls on all countries to apply countermeasures and enhanced due diligence to business relationships and transactions with them.
Beyond the grey list: other critical outcomes from the June 2026 Plenary
The grey list changes were not the only significant outcome. The FATF Plenary delivered several additional decisions that compliance teams should track.
Humanitarian exemptions now embedded in Recommendation 6
The FATF updated Recommendation 6 to incorporate humanitarian exemptions from United Nations Security Council Resolutions 2664 and 2761. This update ensures that targeted financial sanctions measures do not block the flow of funds, assets, resources, goods and services necessary for humanitarian assistance and basic human needs. Compliance teams at banks and money service businesses handling cross-border remittances to conflict zones should review their sanctions screening workflows to align with this updated standard.
Public consultation on Recommendation 16 guidance
The Plenary approved a public consultation on guidance for implementing the strengthened cross-border payment transparency standard under Recommendation 16. Financial institutions will need to comply with the updated standard by the end of 2030. The consultation opens shortly and is an opportunity for firms to influence how the guidance takes shape. Payment service providers, correspondent banks and VASPs should pay close attention to the consultation documents when they are published.
New reports on terrorist financing via social media and underground banking
The FATF approved a new publication on detecting and disrupting terrorist financing conducted through social media, instant messaging applications and streaming platforms. A separate report examining how underground banking, hawala and similar service providers can be exploited by professional money launderers is due in September 2026. Both publications will carry practical implications for transaction monitoring and suspicious activity reporting.
Virtual assets: seventh targeted update and DeFi report incoming
The Plenary approved a seventh targeted update on the implementation of FATF Standards on virtual assets and VASPs, alongside a new report examining regulatory challenges around decentralised finance (DeFi) platforms. Both reports are expected next month. VASPs and crypto exchanges should watch for updated expectations, particularly around DeFi-related risks.
UK presidency: what to expect from July 2026
The incoming UK presidency under Giles Thomson will run from July 2026 to June 2028. Three priorities will define this period. First, the UK will step up the international response to fraud, including the money laundering and terrorism financing risks linked to scam compounds. Second, the presidency will focus on strengthening implementation of the risk-based approach and risk-based supervision. Third, enhanced information sharing and public-private partnerships will be a central theme.
For compliance teams, this signals a regulatory environment that increasingly rewards effectiveness over formalistic compliance. Firms that can demonstrate their AML programs actually detect and prevent financial crime, rather than simply ticking boxes, will be better positioned for the next round of regulatory scrutiny.
India’s Vivek Aggarwal was appointed as the incoming FATF Vice-President for July 2026 to June 2027, signalling continued engagement from major emerging economies in the global AML framework.
Practical steps for your compliance program
Knowing what changed is only half the picture. Here is what compliance teams should do in the weeks ahead.
Start by updating your jurisdictional risk ratings. Add Iraq and Bosnia and Herzegovina to the list of elevated-risk countries in your risk assessment framework. At the same time, review and potentially downgrade the risk ratings for Algeria and Namibia. Avoid blanket de-risking. The FATF explicitly discourages enhanced due diligence based solely on grey list status; instead, use the listing as one input into a broader, context-specific assessment.
Review your customer base for exposure. Run a screening exercise to identify clients, beneficial owners or counterparties with connections to newly listed jurisdictions. Existing enhanced due diligence files for clients linked to Algeria and Namibia should also be reviewed and measures adjusted where appropriate.
Brief your front-line staff. Relationship managers, onboarding teams and transaction monitoring analysts need to understand the changes and how they affect day-to-day decision-making. A short internal briefing or compliance alert is often the most effective way to achieve this quickly.
Monitor the Recommendation 16 consultation. When the consultation documents are published, assign someone on your team to review them. Cross-border payment transparency requirements will affect originator and beneficiary information standards and early engagement gives your firm a voice in shaping the final guidance.
Review your sanctions screening for humanitarian exemptions. If your firm processes transactions to conflict-affected regions, ensure your screening tools and procedures account for the humanitarian exemptions now embedded in Recommendation 6.
Conclusion
The FATF grey list June 2026 update is a clear reminder that the global AML landscape does not stand still. Iraq and Bosnia and Herzegovina face scrutiny over strategic deficiencies, while Algeria and Namibia’s exits show that determined reform efforts can succeed. The broader Plenary outcomes, from humanitarian exemptions in sanctions standards to upcoming guidance on cross-border payment transparency, reinforce the need for compliance teams to stay engaged with evolving FATF expectations.
If your firm needs support updating risk assessments, recalibrating screening processes or preparing for upcoming regulatory changes, Compliance7 can help. Book a free consultation to discuss how these changes affect your business.
This article is for informational purposes only and does not constitute legal or regulatory advice. For guidance specific to your business, consult a qualified compliance professional.
