Grenada FATF Status: CFATF and Mutual Evaluation

FATF and Grenada: What the Financial Action Task Force Means for the JurisdictionCopy link to section

FATF in Grenada operates indirectly: the country is not a direct member of the Financial Action Task Force but participates through the Caribbean Financial Action Task Force (CFATF), the recognised FATF-Style Regional Body for the Caribbean Basin. This matters to any foreign owner or adviser because a jurisdiction's standing within the FATF Global Network shapes how counterpart banks and service providers treat structures based there. The country sits in CFATF's enhanced follow-up, a monitoring track that differs sharply from the FATF public grey or black lists; the official FATF country page records its status and evaluation documents.

This article explains what that status means, how it arose, and the practical consequences for those holding or planning a Grenada entity from abroad. It is most useful to non-resident investors, corporate service users, and the advisers assessing the compliance profile of a Grenada company.

The Role of FATF and Its 40 Recommendations ExplainedCopy link to section

The FATF Recommendations are the global standard for combating money laundering, terrorist financing, and the financing of weapons proliferation. Every assessed country is measured against two separate questions: whether its laws meet the standard (technical compliance), and whether those laws work in practice given local risks (effectiveness).

Technical compliance uses a four-point scale: Compliant (C), Largely Compliant (LC), Partially Compliant (PC), and Non-Compliant (NC). Effectiveness is scored against 11 Immediate Outcomes on a separate scale of Low, Moderate, Substantial, or High.

Monitoring after an evaluation runs along two tracks. Regular follow-up is the default; enhanced follow-up applies to members with significant deficiencies and involves more intensive review.

The 5th round of mutual evaluations runs on a six-year cycle, shorter than the earlier rounds that averaged ten years.

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Grenada's Membership in the Caribbean Financial Action Task Force (CFATF)Copy link to section

CFATF is an inter-governmental body of 24 member states and territories across the Caribbean Basin, Central and South America, committed to common AML/CFT countermeasures. The jurisdiction belongs to this body, and its assessments are carried out by CFATF acting as the regional arm of the FATF system.

This structure means the country is not evaluated by FATF directly. Its compliance is reviewed through CFATF, whose Plenary meetings adopt its evaluation reports and track its progress; the CFATF Grenada country page holds the follow-up record.

Grenada's Mutual Evaluation History and Key FindingsCopy link to section

The country has been through this process before. After its 3rd Round evaluation, it entered enhanced follow-up in May 2009 and exited in December 2014, once the November 2014 CFATF Plenary recognised significant progress on the Core and Key Recommendations and the Special Recommendations.

The 4th Round Mutual Evaluation Report was adopted at the CFATF Plenary in June 2022, assessing the position observed during an on-site visit held 14 to 25 June 2021. That report examined compliance with all 40 Recommendations and the effectiveness of the AML/CFT system.

Several findings stand out for anyone assessing the country's risk profile:

• No national risk assessment had been completed for legal persons or non-profit organisations.
• A separate terrorist-financing risk assessment of June 2021 rated overall TF risk as medium-low, with the threat assessed as minimal and no TF cases detected.
• Suspicious transaction reports came from only four sectors: banks, credit unions, money service businesses, and insurance.
• Designated non-financial businesses showed limited grasp of politically exposed person requirements, relying heavily on the small-community environment.

Progress against these points is tracked through follow-up reports presented at later CFATF Plenary meetings.

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Technical Compliance Ratings Against the FATF RecommendationsCopy link to section

In the 2025 Follow-Up Report, CFATF re-rated the country on 4 of the 40 Recommendations following demonstrated progress. It is now rated Compliant or Largely Compliant on 21 of the 40 Recommendations.

The remaining 19 were not rated C or LC, signalling areas that still need work. Recommendation 1, covering the risk-based approach and national coordination, began at Partially Compliant in the 2022 baseline and remained short of full compliance through the follow-up.

The recommendation-by-recommendation table sits in Table 2 of the 2022 MER, published as a CFATF PDF; consult that document directly for the line-item ratings rather than relying on summaries. On the strength of both technical compliance and effectiveness, the jurisdiction stays in enhanced follow-up.

Effectiveness Ratings and the Immediate Outcomes AssessmentCopy link to section

Effectiveness is judged against 11 Immediate Outcomes, each representing a goal an AML/CFT system should achieve in practice. The ratings run High (HE), Substantial (SE), Moderate (ME), and Low (LE).

The full outcome-by-outcome scores appear in Table 1 of the 2022 MER and are not reproduced here. What the follow-up record makes clear is that effectiveness remains a primary reason the country stays under enhanced monitoring, the 2025 report having considered progress up to 27 November 2024.

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Grenada's AML/CFT Legal and Institutional FrameworkCopy link to section

The statutory base was strengthened during 2012, when the country enacted the Financial Intelligence Unit Act, establishing the FIU and its powers, alongside a revised Proceeds of Crime Act that tightened cash seizure, restraint, and forfeiture. The FIU lists the Proceeds of Crime Act and its AML/TF Guidelines as the primary instruments on its legislation portal.

Banks are licensed under the Banking Act. The Grenada Authority for the Regulation of Financial Institutions (GARFIN) is the licensing and prudential supervisor for all other financial institutions.

Cooperation between agencies has been formalised. A memorandum of understanding between the FIU and the Inland Revenue Division, dated 8 December 2023, supports information sharing and joint financial investigations through designated points of contact, while the Tax Administration Act 2024 came into effect on 20 December 2024.

Two features matter directly to foreign-owned structures:

• The International Companies Act requires registered agents to keep records of directors and beneficial owners, and bearer shares are not permitted.
• No casinos, internet gaming sites, or free trade zones operate in the jurisdiction; car dealers have been brought into the AML/CFT regime voluntarily, beyond what FATF requires.

Supervision, Enforcement and the Financial Intelligence UnitCopy link to section

The Financial Intelligence Unit is the central AML/CFT authority, based at the Financial Complex, Building No. 1, The Carenage, St. George's. Its supervisory role is shared rather than held alone.

The Eastern Caribbean Central Bank also delivers AML/CFT training to the banking sector. The concentration of suspicious transaction reports across only four sectors as at the 2021 visit points to thinner supervisory coverage elsewhere, and no risk assessment for legal persons or NPOs had been completed at that stage.

Detailed enforcement statistics, including prosecution counts and penalties, are not reproduced in the public summaries; the relevant data sits in Chapters 3 and 6 of the MER.

Follow-Up Reporting and Progress on Identified DeficienciesCopy link to section

The 2025 Follow-Up Report measures progress against the deficiencies named in the 2022 evaluation, covering developments up to 27 November 2024. CFATF's Group of Experts reviewed every criterion of each Recommendation under examination, treating unchanged areas briefly.

That review produced the re-rating of 4 Recommendations and confirmed the running total of 21 of 40 at C or LC. For Recommendation 1, a specific criterion remained outstanding, holding the rating short of full compliance.

The 4th Round follow-up was reported to the CFATF 59th Plenary in December 2024, alongside Cayman Islands, Haiti, Dominica, Saint Vincent and the Grenadines, Anguilla, and Guyana. The country is also tracked under the FATF International Co-operation Review Group reporting, and the follow-up report is published as a CFATF PDF on the FATF website.

What FATF Alignment Means for Non-Resident Owners and AdvisersCopy link to section

The single most important point for a foreign owner: the country is neither blacklisted nor greylisted. It does not appear on the FATF list of High-Risk Jurisdictions subject to a Call for Action, nor on the list of Jurisdictions Under Increased Monitoring.

What applies instead is CFATF's enhanced follow-up, an internal improvement track. This is distinct from a formal FATF public listing and does not trigger the automatic enhanced due diligence that a grey or black listing would impose on counterpart jurisdictions.

Practical consequences still follow:

• Some compliance teams in counterpart jurisdictions map CFATF monitoring status to their internal risk frameworks and may apply heightened scrutiny to Grenada-sourced structures.

• Beneficial ownership records are mandatory through registered agents, and bearer shares are prohibited, so disclosure obligations are formalised.
• Supervision of sectors such as real estate and legal or accountancy services remains less developed; those using non-bank structures should expect evolving oversight as deficiencies are remediated.
• The Tax Administration Act 2024 and the December 2023 FIU–IRD memorandum change how information is shared; advisers should confirm the effect on their clients.

Outlook for Grenada's FATF EngagementCopy link to section

The direction is one of incremental improvement, with 21 of 40 Recommendations now rated C or LC against the 2022 baseline. The country will stay in enhanced follow-up until both its technical compliance and effectiveness shortfalls satisfy CFATF.

History offers a useful reference. The successful exit from 3rd Round follow-up after the November 2014 Plenary shows the institutional capacity to close gaps exists.

The likely drivers of an eventual exit are clear from the evaluation findings: completing the national risk assessment for legal persons and NPOs, widening STR filing across DNFBP sectors, raising effectiveness across the Immediate Outcomes, and fully operationalising FIU–IRD cooperation. FATF began its 5th round under the updated 2022 Methodology in 2024, with FSRBs adopting it after completing their current round, so the next full evaluation lies several years out; no official exit timeline for the present follow-up has been announced.

ConclusionCopy link to section

For a non-resident owner, the headline is reassuring: a Grenada company sits in a country under regional enhanced follow-up, not on any FATF public list, and so avoids the banking restrictions that a grey or black listing would bring. The framework already requires beneficial ownership records and bans bearer shares, giving structures a defensible compliance footing. Some counterpart banks will still apply extra scrutiny, and supervision outside the banking sector is maturing. Track the follow-up reports and plan for evolving oversight rather than treating the status as static.

How Expanship Can Help Your Business in GrenadaCopy link to section

Expanship helps foreign owners interpret what CFATF enhanced follow-up means for a specific structure, prepare the beneficial ownership records required under the International Companies Act, and respond to the heightened due diligence questions counterpart banks may raise. Beyond AML/CFT matters, the firm supports the full lifecycle of a foreign-owned entity in the jurisdiction.

• Company formation and entity structuring
• Registered agent and registered office services
• Tax registration and filing with the Inland Revenue Division
• Ongoing compliance and beneficial ownership record-keeping
• Accounting and bookkeeping
• Introductions to banking partners

To discuss your requirements, contact Expanship Grenada.

Frequently Asked QuestionsCopy link to section