FATF Expands Grey List with Kuwait and Papua New Guinea Following February 2026 Plenary

The first plenary session of the year held by the Financial Action Task Force (FATF) concluded on 13 February 2026, after which the organisation announced major updates to the FATF Grey List. The revisions included the addition of Kuwait and Papua New Guinea to the list, formally known as “Jurisdictions Subject to Increased Monitoring”.

Under its supervisory role, FATF regularly releases updates to the list of countries identified as having strategic shortcomings in their Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT), and Counter Proliferation Financing (CPF) frameworks. The FATF Grey List serves as an official classification of jurisdictions with such deficiencies, while also recognising that these countries are actively cooperating with FATF to strengthen their AML/CFT/CPF controls.

FATF operates as a global standard-setting authority focused on tackling financial crimes including Money Laundering (ML), Terrorist Financing (TF), and Proliferation Financing (PF). Through extensive analysis and evaluation, the body develops internationally accepted recommendations designed to prevent criminals from misusing the global financial system. These uniform AML, CFT and CPF recommendations support countries in building effective domestic compliance frameworks, while FATF also monitors how well jurisdictions implement these measures internally.

The February 2026 update to the FATF Grey List mainly involved the addition of new countries, with no jurisdictions being removed. Kuwait and Papua New Guinea were officially added to the list of Jurisdictions Under Increased Monitoring on 13 February 2026. The inclusion of these countries reflects FATF’s assessment that further strengthening of AML/CFT/CPF controls is required in their respective financial systems.

As of 13 February 2026, the FATF Grey List includes the following jurisdictions: Algeria, Angola, Bolivia, Bulgaria, Cameroon, Cote d’Ivoire, Democratic Republic of Congo, Haiti, Kenya, Kuwait, Laos, Lebanon, Monaco, Namibia, Nepal, Papua New Guinea, South Sudan, Syria, Venezuela, Vietnam, Virgin Islands (UK), and Yemen.

Following the plenary conclusion, Kuwait was formally placed on the Increased Monitoring List. In February 2026, Kuwait made a high-level political commitment to collaborate with FATF and MENAFATF to enhance the effectiveness of its AML/CFT regime. Kuwait’s Mutual Evaluation Report (MER) was adopted in June 2024, and the country has since made notable progress in implementing recommended measures. After its Grey List inclusion, Kuwait will continue working with FATF to deliver its action plan, including enhancing outreach to real estate agents and DPMSs regarding Suspicious Transaction Report (STR) reporting through sector-specific indicators for ML/TF detection. Kuwait will also focus on ensuring the accuracy of beneficial ownership registry information and applying effective, proportionate, and dissuasive sanctions where inaccuracies are identified. Additionally, the country aims to increase ML investigations and prosecutions, particularly those related to cross-border currency and Bearer Negotiable Instruments (BNIs).

Papua New Guinea was also placed under Increased Monitoring following the February plenary. The country made a high-level political commitment to work with FATF and the Asia/Pacific Group on Money Laundering (APG) to strengthen its AML/CFT framework. Papua New Guinea adopted its MER in September 2024 and has since made progress on several recommended actions, including operationalising and strengthening its anti-corruption authority, developing a national risk assessment, and automating communication of United Nations Security Council Resolution (UNSCR) updates to relevant government agencies and reporting entities.

With its Grey List inclusion, Papua New Guinea will continue working with FATF to implement its action plan. Key priorities include improving understanding of ML risks and endorsing the National AML/CFT/CPF Strategic Plan. The country will also proactively pursue outbound international cooperation to trace criminal assets abroad, enhance risk-based supervision of banks, MVTS/FX dealers, and higher-risk DNFBPs, and demonstrate measurable increases in ML investigations and prosecutions. Further objectives include increasing the freezing, seizing, and confiscation of criminal proceeds and assets of equivalent value, conducting training for competent authorities to strengthen implementation of Targeted Financial Sanctions related to Proliferation Financing (TFS-PF), and addressing technical compliance gaps relating to ML and TF offences, TFS-PF, politically exposed persons, and suspicious transaction reporting.

Following these updates, regulated entities in the United Arab Emirates, including Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs), and Virtual Asset Service Providers (VASPs), are expected to closely monitor developments in the FATF Grey List as part of their AML/CTF/CPF compliance obligations.

Regulated entities are expected to review their AML/CFT/CPF programmes and account for the inclusion of Kuwait and Papua New Guinea. Required compliance actions include initiating Enterprise-Wide Risk Assessments (EWRA) to evaluate ML/TF/PF exposure linked to the newly greylisted countries. Organisations must also revise risk metrics to flag these jurisdictions and recalibrate controls for any countries removed from the list. Internal AML/CFT/CPF policies and procedures should be updated to reflect the latest FATF changes, and Customer Risk Assessment frameworks should be aligned accordingly. Enhanced Due Diligence (EDD) must be applied to customers or suppliers connected to jurisdictions classified as “FATF Jurisdictions subject to increased monitoring”. Additionally, organisations should reconfigure AML software solutions in line with the updated Grey List and conduct comprehensive employee training to ensure awareness of the changes and revised customer handling procedures.

By fLEXI tEAM