Many of you probably heard of Croatia’s addition to the Financial Action Task Force’s (FATF) Grey List. It has raised concerns for the fintech companies.
First, let’s try to understand the Grey List. FATF has a practice of naming and shaming countries for the deficiencies with their 40 Recommendations. While being on the Grey List does not classify a country as high-risk, and doesn’t mean it is a dead end, it nevertheless indicates that the country included in the grey list has specific deficiencies in their AML framework.
Here is what I suggest you to do:
Read thru the information on the FATF website. If we look at it we see that the country is put on the grey list due to very specific reasons. Let’s look at them closely.
- Lack of National Risk assessment
- Need for increasing FIU headcount
- Better investigation of money laundering
- Need to increase in provisional measures (confiscations)
- Need to improve detection and investigation of terrorism financing
- Poor implementation of sanctions
- Poor supervision of non-profit sector
Well, after we broke it down, it doesn’t seem so scary.
So, what do we do next in practical terms? Now we see that among the listed points only â„–7 somewhat applicable to the fintech.
But as many of you are probably aware, the most standard requirement that you are already fulfilling is the sanctions screening of your customer and counterparties. So, that’s basically it.
Here below is the list of the things that I would consider a waste of time and money (as compliance costs money!):
- Doing a gap-analysis or risk assessment from scratch (because guidelines says so).
- Conducting enhanced due diligence for all your customers from Croatia.
- Conducting separate impact/business/country risk assessments.
Now I hope that it is clear and you will be able to take fast and informed decisions, save time and resources.
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