There is a robust international network working to prevent money laundering. It’s called the FATF (Financial Action Task Force). It has headquarters in Paris and works through nine regional satellite organizations on every continent except Antarctica.[1] It provides guidance to more than 100 countries on anti-money laundering best-practices, and it puts offenders and scofflaws on either a greylist (naughty) or blacklist (criminal) as a way to herd all these cats.[2]

Now, the US has stepped back from its leadership role in the fight against financial crime. For an administration that is in the first inning, it is a breathtaking list of reversals.

For example, the administration, through executive order, declared in February that the Foreign Corrupt Practices Act hinders our ability to pay bribes and thus compete.[3] Then FinCEN (Financial Crimes Enforcement Network) issued a rule revision that removes the requirement for most U.S.-based companies to disclose their beneficial owners.[4] So now US entities can hide their owners, while foreign entities must disclose. And a recent Wall Street Journal article stated that “Trump Administration Retreats From White-Collar Crime Enforcement.”[5]

To you, this might feel like just another adjustment in regulatory burdens. But on the world stage, this kind of shift raises alarms and could lead to serious adverse consequences. In Paris, Le Monde called the suspension of the FCPA a “license to bribe.”[6] Germany and other countries throughout the EU have expressed similar concerns.

Why should we care what the French have to say?

Your Global Reputation Matters

Back in 2008, Bill Matthews, my good friend, started the SAFE Act, and thus was born the NMLS licensing system. It gave every loan officer a national reputation and elevated the position of loan officer to one more approximating other licensed professionals.

In the same spirit, FATF is a method by which international reputations are created, guarded or destroyed, rebuilt or ignored. The FATF works to identify countries that have serious strategic deficiencies when attempting to counter money laundering. They keep a blacklist of the real bad guys - North Korea, Iran and Myanmar are examples.[7] The FATF calls on all nations to exercise enhanced due diligence and to apply “countermeasures” when dealing with these “blacklisted” countries.

For those countries, so to speak, that are committing misdemeanors not felonies, they don’t end up on the blacklist, but on the greylist – just a little less bad. These countries are deemed by FATF to be defective but working on it. Fat but on a diet. Behind but working with a tutor. These nations include, among others, Algeria, Haiti, Syria, and Venezuela. They are at least trying. [8]

And what are their deficiencies, most commonly? Their AML rules are ineffective. That’s the heart of it.

But now, the US has now taken positions on white-collar prosecutions, on bribery, on beneficial owners that make US anti-money laundering efforts much less effective. And at risk is our international reputation.

Greylisting Is Not Just Symbolic

So what happens now? We actually don’t need to guess what happens when the FATF loses confidence in a country. Just look at Turkey and the UAE, both of which were greylisted in recent years.

In 2022, Turkey[9] was placed on the greylist for its money laundering deficiencies. As a result, they endured on-site inspections across all sectors and were required to conduct more financial investigations into potential money laundering. Turkey saw a sharp drop in foreign investment. Banking relationships with EU and U.S. institutions became more strained, and many correspondent banks took a magnifying glass to every single transaction done with them. Miserable.

Or consider the UAE, where despite being a global financial hub, they faced serious ramifications for ineffective AML regulations. It was removed from the greylist in 2024, and Moody’s commented that part of getting off the greylist required the UAE to “boost international cooperation,” step up “investigations and prosecutions” and address the risk of “shell companies.”[10]

If the U.S. Were Greylisted—Then What?

So these things the UAE needed to fix, these are exactly the three areas that the US is stepping away from – cooperation, prosecutions, shell companies.

And although it is unlikely that FATF would greylist the U.S. tomorrow, if you're someone responsible for assessing institutional risk, you have to game this out:

1. What happens to U.S. interest rates if international banks begin pricing in higher reputational risk?
2. Will global investors hesitate before deploying capital into U.S. real estate markets?
3. Could home sales be affected, particularly in high-dollar markets where foreign buyers (via LLCs or trusts) play a large role?
4. Will international institutions begin applying stricter due diligence on U.S. clients and counterparties?
   
   You don't have to believe this will happen next week, but you should absolutely recognize it as a real and growing risk. You would be negligent in your risk assessment if you did not at least address the potential of international blow-back for these new US positions vis-à-vis AML protocols.

Conclusion:

In 1997, Apple’s ad campaign used the slogan “Think Different,” intentionally substituting the adjective for the correct adverb – differently. “Think different.” Perfect.

We all have to “think different.” None of this is normal.

As a BSA officer, your job is to assess risk. And currently, I would suggest that you resist the pre-programming in your brain that says, “nah, that can’t happen.”

What could happen here if the US makes the greylist? Impaired ability to wire funds? Constricted foreign capital? China a memory? Increased burden on US companies doing business abroad?

If you are inclined to disregard all this due to your heartfelt jingoism, think what would happen if another country like Venezuela or Mexico had made the moves we’ve just made. Other nations would punish them.

And though the US has through our “soft-power” created a substantial amount of goodwill around the world, that goodwill is not unlimited, and is, in this environment, arguably greatly reduced. Given tariffs and threats of tariffs, there may be a great number of nations that would like to see us hoisted by our own petard.[11]

If you are responsible for BSA/AML compliance, or if you are in risk assessment, you have to mentally go to some pretty dark places right now.

Think different.

[1] https://www.fatf-gafi.org/ You’ll see, for example, the APG, or Asian Pacific Group on Money Laundering, the Caribbean Financial Action Task Force, the Eurasian Group, and the Financial Action Task Force of Latin America

[2] FATF writes it as “black list,” while more sources create the noun blacklist as one word. I apply the same to greylist, for consistency.

[3] Executive Order dated February 10, 2025 states: But overexpansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security. It is therefore the policy of my Administration to preserve the Presidential authority to conduct foreign affairs and advance American economic and national security by eliminating excessive barriers to American commerce abroad

[4] FinCEN alert dated March 26, 2025: All entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are now exempt from the requirement to report beneficial ownership information (BOI) to FinCEN. Existing foreign companies that must report their beneficial ownership information have at least an additional 30 days from March 26, 2025—until April 25, 2025, for most companies—to do so.

[5] https://www.wsj.com/finance/regulation/trump-doj-white-collar-law-enforcement-4d27b06d

[6] Le Monde, English Edition, online, dated February 12, 2025: Donald Trump has given corporate America a license to bribe. In an executive order on Monday, February 10, the US president directed the Department of Justice to suspend prosecutions under the 1977 Foreign Corrupt Practices Act (FCPA)

[7] High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation. For all countries identified as high-risk, 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 countermeasures to protect the international financial system from the money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from the country. This list is often externally referred to as the “blacklist”

[8] https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/increased-monitoring-february-2025.html

[9] Since the assessment of the effectiveness of Türkiye's measures to combat money laundering and terrorist financing in 2019, the country has been in an enhanced follow-up process.  The country reported back to the FATF in 2021, 2022 and 2023 on the actions it had taken to strengthen its AML/CFT framework.

[10] https://www.moodys.com/web/en/us/kyc/resources/insights/fatf-announces-decision-remove-united-arab-emirates-grey-list.html

[11] A sort of humorous phrase meaning blown up by your own schemes – with roots in Hamlet and in vulgar French, petarde, being related to passing gas.