FATF plenary February 2026: Key grey list changes, new strategic publications, and a new presidential appointment

The fifth Financial Action Task Force (FATF) Plenary meeting under the Mexican Presidency of Elisa de Anda Madrazo took place from February 9-13, 2026.

Highlights from the plenary include:

• Changes to the FATF grey list: Papua New Guinea and Kuwait were added to the list of jurisdictions under increased monitoring.
• Mutual evaluations: The adoption of the first three reports under the FATF’s new assessment round.
• New strategic reports: Approval of major publications on cyber-enabled fraud and virtual asset risks.
• Presidential transition: The appointment of the incoming FATF President for the 2026–2028 term.

This article breaks down the key takeaways from this event, including what they mean for your business.

1. Additions to the grey list

The FATF’s list of jurisdictions under increased monitoring, or the ‘grey list’, is a significant document for compliance professionals. At this plenary, two countries were added to the list.

Papua New Guinea

Papua New Guinea was first placed on the FATF grey list in 2014 after failing to implement the necessary anti-money laundering and counter financing of terrorism (AML/CFT) recommendations that followed an evaluation in 2011. In response, the government undertook significant legal reforms in 2015, which led to its removal from the list in 2016. These key actions included:

• Amending the Criminal Code 1974 to incorporate money-laundering offenses.
• Updating the Proceeds of Crime Act 2005.
• Enacting the Anti-Money Laundering and Counter-Terrorist Financing Act 2015 and the Sanctions Act 2015.
• Establishing a National Coordination Committee to oversee AML/CTF efforts.
• Granting the financial intelligence unit (FIU) greater independence by moving it from the police department to the Central Bank.

While Papua New Guinea had improved its technical compliance since its first listing, the 2024 mutual evaluation report (MER) by the Asia/Pacific Group on Money Laundering (APG) revealed significant failures in the effectiveness of its regime. 

Key issues that led to the February 2026 grey-listing include:

• Lack of enforcement and prosecution: A primary concern is the country’s failure to demonstrate a track record of enforcement. There has been a significant lack of criminal prosecutions and convictions for money laundering and terrorist financing.
• Inadequate supervision: The regime has failed to adequately supervise high-risk sectors, including non-bank financial institutions and designated non-financial businesses and professions (DNFBPs).
• Poor inter-agency coordination: Low levels of cooperation between government agencies have hampered the ability to combat financial crime effectively.
• Failure to recover illicit assets: Authorities have struggled to successfully trace, freeze, seize, and confiscate the proceeds of crime, particularly those stemming from high-risk areas like corruption, illegal logging, and tax evasion.

Kuwait

Kuwait was previously placed on the FATF grey list in 2012 following a mutual evaluation that identified significant strategic deficiencies in its AML/CFT framework. In response, the Kuwaiti government implemented a series of legislative and regulatory reforms, leading to its successful removal from the list in 2015. Key actions during that period included:

• Enacting Law No. 106 of 2013 regarding AML/CFT.
• Establishing the Kuwait Financial Intelligence Unit (KwFIU) as an independent legal entity.
• Setting up the National Anti-Money Laundering and Counter-Terrorist Financing Committee to coordinate national policy.
• Creating a legal framework for the immediate implementation of targeted financial sanctions under relevant UN Security Council Resolutions.

While Kuwait has maintained a relatively robust legal and supervisory framework since its first listing, the 2024 MER conducted by the FATF and the Middle East and North Africa Financial Action Task Force (MENAFATF) highlighted that the country still faces serious shortcomings in delivering effective outcomes. Despite technical progress, the regime failed to demonstrate that its laws were being applied effectively to mitigate the country’s specific risk profile.

Key issues that led to the February 2026 grey-listing include:

• Inadequate understanding of risk: Authorities have demonstrated a basic understanding of money laundering (ML) but a consistently low understanding of terrorist financing (TF) risks, leading to an under-assessment of the threats facing the jurisdiction.
• Lack of complex prosecutions: While Kuwait prosecutes simple ML cases, there is a significant lack of investigations and prosecutions for more complex cases, particularly those involving a broader range of predicate offenses beyond corruption and forgery.
• Weaknesses in beneficial ownership: The national registry for beneficial ownership remains significantly under-populated, and there is a lack of effective, proportionate, and dissuasive sanctions for legal persons that provide inaccurate or outdated ownership information.
• Limited TF enforcement: Targeted investigations into TF have been limited and have frequently failed to result in convictions at trial, revealing a gap between the legal framework and its practical application.
• Implementation of financial sanctions: Shortcomings remain in the legal underpinning required to freeze assets linked to terrorism or proliferation without delay, rendering some international sanctions difficult to enforce domestically.

2. Mutual evaluations

The FATF has adopted new assessment reports for several countries as part of its mutual evaluation process. Here’s a summary of the key developments:

• New reports: The reports for Austria, Italy, and Singapore have been adopted and will be published between April and May 2026.
• Previous reports: These follow the reports for Belgium and Malaysia, which were the first to be published under the new process in December 2025.

A key feature of this new round is that assessed countries receive a time-bound “Roadmap of Key Recommended Actions” and are expected to demonstrate significant progress within three years.

A Guide to the FATF Grey List

The FATF grey list is among the best-known indices of higher-risk countries in the compliance industry. But how should firms respond to a grey listing in practice?

Download your copy

3. New strategic publications

To help countries combat emerging financial crime threats, the FATF has approved new publications focusing on two key areas: cyber-enabled fraud and virtual assets. These projects support responsible innovation by providing guidance on how to mitigate evolving risks. The contents of the reports are as follows:

• Cyber-enabled fraud: This report highlights the escalating global threat of cyber-fraud. It calls on the private sector and AML/CFT supervisors to leverage innovative technology to prevent fraud and help return stolen funds to victims. An official publication deadline has not been announced, but it can be expected this year. To keep up to date on official releases, find FATF publications here.
• Virtual assets: Two reports are approved for publication in March 2026:
  • Offshore VASPs: “Understanding and Mitigating the Risk of Offshore Virtual Asset Service Providers” is a report exploring the risks of unregulated offshore virtual asset service providers and how criminals often exploit regulatory gaps.
  • Stablecoins and unhosted wallets: “A Targeted Report on Stablecoins and Unhosted Wallets” will examine emerging risks in the stablecoin market, specifically regarding peer-to-peer (P2P) transactions and unhosted wallets.

4. FATF presidential appointment

The Plenary has appointed Giles Thomson of the United Kingdom as the incoming President of the FATF for a fixed two-year term beginning this year and concluding in June 2028. 

Giles Thomson has served as the FATF Vice-President since July 2025 and will succeed Elisa de Anda Madrazo upon the conclusion of her presidency on June 30, 2026.

Next steps

Moving forward, it is recommended that teams update their risk scores for the relevant countries that have been added to the FATF grey list. Our in-depth guide to the FATF grey list explains how a country’s status should be reflected in your compliance policies.

Teams should prepare for the release of the cyber-fraud, virtual asset, and stablecoin reports, the latter two coming next month. These reports will likely include new risk indicators, recommendations, and overviews of emerging technologies that should be integrated into firm-wide best practices, particularly for those operating in the FinTech and crypto sectors.

The next FATF Plenary, the final one under the Mexican Presidency, is scheduled for June 2026.