Introduction
The Financial Action Task Force (the ‘‘FATF’’) is an inter-governmental body that develops and promotes 40 recommendations that serve as the fundamental framework for combating money laundering, terrorist financing, and related financial crimes in the global financial system. It evaluates the implementation of these recommendations and monitors the progress of countries found to have deficiencies in their Anti-Money Laundering (‘‘AML’’) and counter-terrorist financing (‘‘CTF’’) systems.
The FATF maintains two public lists known as the ‘‘Blacklist’’[1] and the ‘‘Grey list’’.[2] The Blacklist is a list of countries that have serious strategic deficiencies in their AML and CTF regimes. Countries on the blacklist are currently the Democratic Republic of Korea, Iran, and Myanmar.
On the other hand, the Grey list identifies countries that have strategic deficiencies in their AML/CTF regimes but have committed with FATF to resolve the identified deficiencies within an agreed timeframe through FAFT-monitored action plans. Examples of countries on the grey list are Algeria, Cameroon, Kenya, Monaco, Nepal, Syria, Vietnam, among others.
On 24th February 2023, FATF placed Nigeria on the Grey list. Nigeria’s inclusion on the list generated widespread concerns among regulators, investors, and global financial partners, as it signaled vulnerabilities in Nigeria’s financial oversight and governance systems. However, recently, on 24th October 2025, the FATF announced that Nigeria had been officially removed from its Grey list. This decision is a welcome development, and it underscores the efforts by Nigerian authorities and financial institutions to strengthen the country’s compliance framework against illicit financial flows. It also reflects both substantial progress in regulatory reforms and renewed international confidence in Nigeria’s financial system.
Nigeria’s Inclusion on the FATF Grey List: Context and Consequences
Nigeria’s initial placement on the Grey list was essentially due to gaps identified by FATF in Nigeria’s AML/CTF frameworks, Nigeria’s lack of robust supervision of financial institutions and non-financial businesses, poor enforcement of targeted financial sanctions, weak investigations and prosecutions of financial crimes, and weak transparency around beneficial ownership of companies; which are all regarded as strategic deficiencies by the FATF. By the inclusion, Nigeria joined a group of nations that, while not subject to sanctions, were deemed to be high-risk in global financial transactions.
Click here to read full article …
Authors
