FATF, fraud and the corruption index

FATF concluded its February plenary in Mexico City earlier this month. The most significant signal was its commitment to focusing on fraud over the coming years, in recognition of the evolving threats facing the globe.

The FATF added Kuwait and Papua New Guinea to its list of jurisdictions under increased monitoring.

Whenever FATF moves, so does the UK’s High Risk Third Country list. Under Regulation 33(1)(b) of the Money Laundering Regulations 2017, Enhanced Due Diligence (EDD) is not a maybe. It is a legal requirement.

If your organisation has customers established in either jurisdiction, funds coming from there, beneficial owners linked there, or transactions connected there, EDD applies.

Transparency International published its 2025 Corruption Perceptions Index (CPI) earlier this month, and the picture is a gloomy one. The global average score shows stagnation or decline across many jurisdictions.

Corruption is one of the key drivers of financial crime. Countries that score poorly in the CPI tend to struggle with Politically Exposed Person (PEP) oversight and procurement integrity. Those weaknesses create the perfect setting for money laundering, bribery and sanctions evasion.

Increasingly, corruption risk is also becoming intertwined with geopolitical risk and sanctions enforcement. Exposure to weak governance environments raises not just financial crime risk, but reputational and regulatory risk too.

Publications like these are good trigger events to review your financial crime risk assessment. Risk assessments should be dynamic, and that includes your geographic risk scoring. FATF and CPI trends are both important factors in that scoring.

Corruption risk should also be seen as a strategic risk, affecting not just customer risk scoring but correspondent banking relationships, capital allocation and long-term market strategy.

Taken together, FATF tells you where AML systems are structurally weak and the CPI tells you where governance pressures are rising. Used in combination, they provide a forward-looking lens on financial crime exposure.

This blog is based on the February 2026 episode of ThirdEye View, hosted by Claire Rees and Phil Roberts from ThirdEye. Claire brings extensive expertise in financial crime prevention as Global Financial Crime Regulatory Specialist, whilst Phil serves as Business Development Manager for ThirdEye in the UK, helping organisations navigate complex regulatory landscapes.