The Financial Action Task Force (FATF) decided it its third regular plenary meeting on Friday to add Croatia to its “grey list,” along with Cameroon and Vietnam. Countries on the “grey list” are the “jurisdictions under increased monitoring.” The move makes Croatia the only EU member on the list, and the stated reason is the country’s deficiencies in preventing money laundering and terrorism financing.

The body has its own set of standards, the “FATF Standards“, in measuring the legitimacy of money transactions of each country. The review process is based on “threats, vulnerabilities, or particular risks arising from the jurisdiction”. FATF also encourages “mutual review”, in which its member jurisdictions would take part in the review in deciding the grey list.

Besides active evaluations, the organization also releases the “FATF Recommendations” to guide authorities in tracing illegal money transactions and taking corresponding actions. FATF had previously released a Mutual Evaluation Report in 2022 on Croatia’s performance in money laundering, terrorist financing and other illegal financing risks.

FATF is the inter-governmental organization that “leads global actions to tackle money laundering and terrorist financing,” as described in its official biography. It was established in 1989 by the G7 Summit in Paris. Currently, it comprises 2 regional organizations and 37 member jurisdictions, including great powers like China, the UK and the US.