FATF Plenary
Also written Plenary of the FATF
The FATF's decision-making body, meeting three times a year, which holds countries to account for non-compliance and can name them Jurisdictions under Increased Monitoring or High Risk Jurisdictions.
In plain language
The FATF writes standards, but a standard nobody enforces is advice. The Plenary is where the FATF decides what happens to a country that does not comply.
The workbook describes it as the FATF's decision-making body. It meets three times per year and holds countries to account if they do not comply with the Standards. Its sharpest tool is public: a country that repeatedly fails to implement the Standards can be named a Jurisdiction under Increased Monitoring or a High Risk Jurisdiction — the lists the world calls grey and black.
The Plenary also appoints the FATF's leadership, including the President who chairs it.
How it works
What the Plenary does (Chapter 8, section 8.1).
| Function | Workbook detail |
|---|---|
| Decision-making body of the FATF | Meets three times per year |
| Holds countries to account | Where they do not comply with the Standards |
| Names non-compliant jurisdictions | A country that repeatedly fails can be named a Jurisdiction under Increased Monitoring (grey list) or a High Risk Jurisdiction (black list) |
| Appoints the President and Vice-President | From among its members |
The two outcomes.
- Increased monitoring (grey). The country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.
- High risk (black). FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, counter-measures.
The President (section 8.1.1). A senior official appointed by the Plenary from among its members. The April 2019 revised Mandate extended the Presidency to a two-year term, beginning 1 July and ending 30 June two years later. The President convenes and chairs the Plenary and the Steering Group; the Executive Secretary and Secretariat act under the President's instructions, in accordance with the Plenary's directions; and the President is the FATF's principal spokesperson. The workbook names Elisa de Anda Madrazo of Mexico as President from 1 July 2024 to 30 June 2026, succeeding T. Raja Kumar of Singapore, and Giles Thomson of the United Kingdom as Vice-President from 1 July 2025.
The mandate (section 8.1.2). In 2019 FATF Ministers gave the FATF an open-ended mandate after three decades under a time-bound one; in 2001 the mandate was expanded to combat terrorist financing.
How it reaches an IFSC entity. The Guidelines allow the FATF Public Statement and FATF reports and guidance to be used in the regulated entity's risk assessment, and require enhanced due diligence for business relationships with persons from countries for which the FATF calls for it.
A worked example
Illustrative; "Country Q" stands for any jurisdiction.
A year of Plenaries, seen from GIFT City. Narmada Bank (IFSC Banking Unit) has 60 corporate customers from Country Q, holding USD 140 million in deposits.
| Plenary | Outcome for Country Q | Narmada's response |
|---|---|---|
| First meeting of the year | Named a Jurisdiction under Increased Monitoring | Updates its business risk assessment; re-rates Country Q customers with geography as a factor; no automatic exit |
| Second meeting | Remains under increased monitoring; agreed timeframe running | Keeps monitoring; documents progress |
| Third meeting | Repeated failure — named a High Risk Jurisdiction | Applies enhanced due diligence to all 60 relationships, as FATF calls for; reviews correspondent exposure to Country Q banks; any counter-measures called for are implemented |
Three meetings, three chances for the list to change — which is why a regulated entity cannot review country risk once a year and assume it is current.
The President's role in this. Each of those meetings was convened and chaired by the FATF President, appointed by the Plenary for a two-year term running 1 July to 30 June.
Why NISM asks about it
Chapter 8 (Financial Action Task Force and Its Recommendations), sections 8.1 to 8.1.2, carries the Plenary, the grey and black list outcomes, the President and Vice-President, and the 2019 open-ended mandate; Chapter 5, section 5.3, lets the FATF Public Statement be used in risk assessment; Chapter 6, section 6.5, requires EDD for countries for which FATF calls for it. Expect "how often does the Plenary meet?", the two-year President term and its 1 July start, and the naming of grey- and black-list jurisdictions.
Common exam traps
- The Plenary is the decision-making body, and it meets three times a year.
- Repeated failure leads to naming as a Jurisdiction under Increased Monitoring or a High Risk Jurisdiction.
- The President is appointed by the Plenary, for two years, 1 July to 30 June — the two-year term dates from the April 2019 revised Mandate.
- The President chairs the Plenary and the Steering Group and is the principal spokesperson; the Secretariat acts under the President's instructions.
- 2019: open-ended mandate. 2001: terrorist financing added.
- The named President is out of date. The workbook gives Elisa de Anda Madrazo's term as 1 July 2024 to 30 June 2026, and that date has passed. Learn the workbook's names for the exam, but do not assume she is the current President; the workbook does not name a successor.
Check yourself
1.How often does the FATF Plenary, the FATF's decision-making body, meet?
- a)Once a year
- b)Twice a year
- c)Three times per year
- d)Every two years
Show the answer
Answer: (c) Three times per year
The FATF's decision-making body, the FATF Plenary, meets three times per year and holds countries to account if they do not comply with the Standards.
Why the others are wrong:
- Once a year and twice a year have no basis in the chapter.
- Every two years is borrowed from the Presidency. In April 2019, the revised Mandate extended the terms of the FATF Presidency to a two-year period, running from 1 July to 30 June two years after assuming office.
What the Plenary does: where a country repeatedly fails to implement FATF Standards, it can be named a Jurisdiction under Increased Monitoring (the "grey list") or a High Risk Jurisdiction (the "black list").
Other structural facts:
- the FATF is described as the 40-member body
- more than 200 countries and jurisdictions have committed to implement the FATF's Standards
- assessments are carried out with the help of nine FATF Associate Member organisations and other global partners, the IMF and World Bank
- the President convenes and chairs the meetings of the FATF Plenary and the Steering Group
2.What does it mean when the FATF places a jurisdiction under increased monitoring?
- a)The country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring — the "grey list"
- b)All jurisdictions are called upon to apply counter-measures against it
- c)The country is expelled from the FATF
- d)Its financial institutions are automatically sanctioned
Show the answer
Answer: (a) The country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring — the "grey list"
When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the "grey list".
Two elements — a commitment by the country, and agreed timeframes. Grey listing is cooperative rather than punitive.
Option B describes the black list, and overstates even that. For all countries identified as high-risk by FATF, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and, in the most serious cases, countries are called upon to apply counter-measures.
Enhanced due diligence generally; counter-measures only in the most serious cases.
Options C and D invent consequences. Listing does not expel a country or automatically sanction its institutions; it changes what other jurisdictions' firms must do.
How listing happens: if a country repeatedly fails to implement FATF Standards then it can be named a Jurisdiction under Increased Monitoring or a High Risk Jurisdiction. These are often externally referred to as "the grey and black lists".
And who decides: the FATF's decision-making body, the FATF Plenary, meets three times per year and holds countries to account if they do not comply with the Standards.
Assessments are shared: countries and jurisdictions are assessed with the help of nine FATF Associate Member organisations and other global partners, the IMF and World Bank.
What the listings mean in practice for a regulated entity. Third-party reliance requires that the third party is not based in a country or jurisdiction assessed as high risk; correspondent banking demands caution with jurisdictions which have strategic deficiencies; and enhanced due diligence must be applied to persons from countries for which this is called for by the FATF.
Where this is taught
Free preparation for NISM Series IFSCA-01Related terms
- FATFThe intergovernmental body founded in 1989 that writes the global AML/CFT standards — the 40 Recommendations plus IX Special Recommendations — and grey-lists or black-lists countries that fail them.
- FATF StandardsThe FATF Recommendations together with their Interpretive Notes and the applicable Glossary definitions — the international AML/CFT/PF standard that more than 200 jurisdictions have committed to implement.
- FATF black listThe informal name for FATF's public statement of jurisdictions with serious strategic AML/CFT/PF deficiencies, on which FATF calls for enhanced due diligence and, in the most serious cases, counter-measures.
- FATF grey listThe informal name for FATF's list of jurisdictions under increased monitoring — countries working with FATF that have committed to fix identified strategic deficiencies swiftly within agreed timeframes.
- FATF Style Regional BodiesThe nine regional counterparts of the FATF — APG, CFATF, EAG, ESAAMLG, GABAC, GAFILAT, GIABA, MENAFATF and MONEYVAL — which with FATF form the global AML/CFT network; India belongs to APG and EAG.
- FATF PresidentThe senior official the FATF Plenary appoints from among its members to chair the Plenary and the Steering Group, serving a two-year term that runs from 1 July to 30 June.