FATF's Selective Scrutiny: Grey-Listing ignores Billion-Dollar Laundromats in the West

The FATF, an intergovernmental body established in 1989, sets global standards for combating money laundering, terrorist financing, and proliferation financing.

FATF has an infamous "Grey List", the naughty step [officially titled "Jurisdictions under Increased Monitoring"], which flags countries with deficiencies in their AML/CFT regimes, requiring them to implement action plans under scrutiny.

While not as punitive as the blocklist, grey-listing can:-

• Deter investment,
• Complicate international transactions, and
• Raise borrowing costs.

PAPUA NEW GUINEA (PNG) IS ON THE GREY LIST

• On 18 February 2026, multiple Pacific and international outlets reported that Papua New Guinea (PNG) has been placed on the Financial Action Task Force (FATF) “grey list”, meaning it has “strategic deficiencies” in its anti–money laundering and counter-terrorist financing systems (AML/CFT).
• This step puts PNG one stage away from the FATF “blacklist”, a severe global financial restriction category currently containing only North Korea, Iran, and Myanmar.
• The grey-list designation indicates that FATF will closely monitor PNG and assess whether the country addresses oversight gaps before further escalation.
• Grey-listing has already triggered significant investor hesitation:
• Around 30 banks have publicly ruled out financing the multi-billion-dollar Papua LNG project backed by Exxon.
• Experts warn grey-listing sends a signal that conducting business in PNG is “rife with danger”, increasing risk premiums and reducing foreign interest.
• For a developing nation like PNG, with a GDP of around $31.6 billion and heavy reliance on resource exports, this is a body blow.

BUT HERE'S THE RUB:

• PNG's economy is a minnow compared to global financial powerhouses.
• Its grey-listing stems from issues including weak oversight in sectors such as real estate and legal services, inadequate transparency on beneficial ownership, and limited enforcement resources.
• Meanwhile, countries such as the UNITED STATES, THE UNITED KINGDOM (PARTICULARLY LONDON), AND SWITZERLAND, hubs for trillions in global finance, have been embroiled in billion-dollar money-laundering scandals in recent years.
• Yet they have escaped similar scrutiny by the FATF.
• FATF's evaluations often overlook or downplay systemic issues in wealthy nations, where sophisticated financial systems enable vast illicit flows.
• This disparity raises uncomfortable questions:
• Is FATF truly targeting the roots of global money laundering, or is it disproportionately punishing smaller nations while letting the big players off the hook?

THE HYPOCRISY IN ACTION: SCANDALS IN THE "SAFE" JURISDICTIONS

• Recent examples from 2025-2026 illustrate how these countries serve as magnets for dirty money, dwarfing anything happening in PNG.
• Using the USA/LONDON and SWITZERLAND as examples of where you find the dirty money, I have illustrated below several cases that equal a GRAND TOTAL of financial crime for all three countries of:
• TOTALLING: $140.36 BILLION.

MORE DETAILS ON $140.36 billion[1].

• The following cases collectively span from 2013 (start of the Tuna Bonds scandal) to February 2026 (MBaer liquidation), with many underlying activities occurring in the 2010s and early 2020s.
• However, the majority of recent enforcement, reporting, arrests, and resolutions cluster in 2024-2026, aligning with the "recent years" focus in the original blog context.
• Older scandals (e.g., 1MDB, PrivatBank, Tuna Bonds) often feature developments in 2024-2025, such as sentencing or fines.

United States: A Laundromat for the World?  = $120.6 billion

• Crypto Money-Laundering Surge: $82 billion
• Prince Group Transnational Fraud: $15 billion
• National Health Care Fraud Takedown: $14.6 billion
• Minnesota Welfare Fraud Rings: $9 billion

• Crypto Money-Laundering Surge • Researchers reported that money launderers processed at least $82 billion in cryptocurrencies in 2025, with a sharp rise driven by Chinese-language networks and other illicit activities. • $82 billion •
• https://www.reuters.com/legal/government/crypto-money-laundering-hit-82-billion-2025-researchers-say-2026-01-27
• Prince Group Transnational Fraud • U.S. authorities targeted the Cambodian-based Prince Group for running pig butchering scams, leading to the seizure of $15 billion in Bitcoin tied to wire fraud and money laundering schemes. • $15 billion •
• https://www.gibsondunn.com/2025-year-end-developments-in-anti-money-laundering
• National Health Care Fraud Takedown • The 2025 operation charged 324 defendants in schemes causing over $14.6 billion in intended losses, marking the largest health care fraud action in DOJ history. • $14.6 billion •
• https://oig.hhs.gov/newsroom/media-materials/2025-national-health-care-fraud-takedown
• Minnesota Welfare Fraud Rings • Federal prosecutors estimated $9 billion stolen through schemes involving nutrition assistance and Medicaid, leading to 78 arrests in the Feeding Our Future case. • $9 billion •
• https://hill.house.gov/news/documentsingle.aspx?DocumentID=9808

London: The Dirty Money Capital?  = $7.63 billion

• Zhimin Qian Bitcoin Laundering: $6.5 billion
• Operation Destabilise: $1 billion
• Prince Group London Assets: $0.13 billion

• Zhimin Qian Bitcoin Laundering • The mastermind of a Chinese Ponzi scheme laundered proceeds into over 61,000 Bitcoin, seized by UK police in one of the largest cryptocurrency hauls. • £5 billion (approximately $6.5 billion) •
• https://www.reuters.com/business/finance/chinese-fraud-mastermind-jailed-uk-laundering-bitcoin-2025-11-11
• Operation Destabilise • The NCA exposed a billion-dollar network that purchased a Kyrgyzstan bank to facilitate sanctions evasion and fund Russian military efforts, with seizures of millions in cash and crypto in the UK. • Over $1 billion •
• https://www.cliffordchance.com/insights/resources/blogs/regulatory-investigations-financial-crime-insights/2025/12/2025-uk-sanctions-round-up.html
• Prince Group London Assets • Linked to the U.S.-sanctioned group, millions in assets, including 19 London properties (one worth nearly £100 million), were frozen as part of a $15 billion global scam proceeds seizure. • £100 million+ in London properties (part of $15 billion global) •
• https://ankura.com/insights/2025-in-review-major-fraud-events-and-what-we-can-learn-from-them

Switzerland: Banking Secrecy Meets Modern Scandals =  $12.13 billion

• MBaer Merchant Bank Violations: $6.4 billion
• PETROSAUDI-1MDB Embezzlement: $1.83 billion
• PrivatBank Theft: $1.9 billion
• UBS/Credit Suisse Tuna Bonds: $2 billion

• MBaer Merchant Bank Violations • The U.S. Treasury accused the Zurich-based bank of funnelling hundreds of millions for sanctioned Iranian and Russian entities, leading to a FINMA liquidation order. • Hundreds of millions (client assets: 4.9 billion CHF, approximately $6.4 billion) •
• https://www.reuters.com/business/finance/swiss-financial-watchdog-says-liquidation-order-mbaer-merchant-bank-ag-is-2026-02-27
• PETROSAUDI-1MDB Embezzlement • Two managers were sentenced for embezzling over $1 billion from Malaysia's 1MDB fund, with Swiss banks involved in the outflow of funds. • Over $1 billion
• https://www.globallegalinsights.com/practice-areas/bribery-and-corruption-laws-and-regulations/switzerland
• PrivatBank Theft • Ukrainian oligarchs used a network of shell companies to steal $1.9 billion from PrivatBank, with funds laundered through Swiss accounts. • $1.9 billion
• https://uncaccoalition.org/switzerland-and-grand-corruption-the-opaque-world-of-asset-recovery
• UBS/Credit Suisse Tuna Bonds • UBS was indicted for facilitating Mozambique's $2 billion scandal, enabling money laundering through hidden loans disguised as fishing investments. • $2 billion •
• https://www.wsj.com/finance/ubs-charged-in-switzerland-over-credit-suisse-tuna-bonds-scandal-aa7ff133

Why PNG? The Scapegoat Dynamic

• PNG's grey-listing, alongside Kuwait, reflects FATF's focus on "strategic deficiencies" in smaller economies.
• With limited resources, PNG struggles to implement, while its illicit flows pale in comparison to the billions laundered through U.S. crypto, London property, or Swiss banks.
• This selective enforcement smacks of geopolitical bias: Powerful nations shape FATF standards but evade consequences, while developing countries bear the brunt.

Conclusion: Time for Real Reform

• FATF's mission is noble, but its application is flawed. Grey-listing PNG while ignoring systemic rot in the U.S., UK, and Switzerland perpetuates inequality in global finance.
• True progress requires holding all nations accountable, regardless of clout, perhaps starting with mutual evaluations that bite as hard in Washington as in Port Moresby.
• Until then, designations like PNG's feel less like justice and more like scapegoating.

[1]-FOOTNOTE: These totals treat each case's listed value independently per country, even if cases like the Prince Group span multiple jurisdictions (e.g., the $15 billion global scam includes separate US Bitcoin seizures and UK property freezes). No adjustments were made for potential overlaps, as the query focuses on per-country sums and their aggregate. If more precise figures or different assumptions (e.g., excluding subsets) are needed, additional details from sources could refine this.

Comsure Group: FATF Grey List Update – 13 February 2026 https://www.comsuregroup.com/news/fatf-grey-list-update-13-february-2026-now-there-are-22

Sources for "Around 30 banks have publicly ruled out financing the multi-billion-dollar Papua LNG project backed by Exxon."

1. BankTrack Article: Almost 30 banks turn their back on TotalEnergies' Papua LNG project https://www.banktrack.org/article/almost_30_banks_turn_their_back_on_totalenergies_papua_lng_project
2. RNZ News: Papua New Guinea one step away from being blocked https://www.rnz.co.nz/news/pacific/587146/papua-new-guinea-one-step-away-from-being-blacklisted-global-money-laundering-watchdog-warns
3. Business & Human Rights Resource Centre: 29 financial institutions decline to finance TotalEnergies liquefied natural gas project https://www.business-humanrights.org/en/latest-news/papua-new-guinea-29-financial-institutions-decline-to-finance-totalenergies-liquefied-natural-gas-project
4. Pacific Scoop: Papua New Guinea One Step Away From Being Blacklisted https://pacific.scoop.co.nz/2026/02/papua-new-guinea-one-step-away-from-being-blacklisted-global-money-laundering-watchdog-warns

Sources for "Experts warn grey-listing sends a signal that conducting business in PNG is 'rife with danger', increasing risk premiums and reducing foreign interest."

1. RNZ News: Papua New Guinea one step away from being blacklisted https://www.rnz.co.nz/news/pacific/587146/papua-new-guinea-one-step-away-from-being-blacklisted-global-money-laundering-watchdog-warns
2. The National: PNG may be grey-listed https://www.thenational.com.pg/png-may-be-grey-listed