The appeal of an AML/CFT watchlist has well and truly elevated political egotism. The exposure of a country's failings or neglect to do anything worthwhile towards preventing money laundering and, to a lesser extent, addressing the threat of terrorism financing, has driven a global media frenzy against a side line of smugness. The most prominent of all AML/CFT watchlists is that of the FATF; it would have to be, would it not?

In 2000, the FATF implemented a Non-Cooperative Countries and Territories (NCCT) list. The process exposed the approach towards enforcement following the 9/11 attacks in the United States while adding counterterrorism financing to the FATF's remit. In 2007, the NCCT process was replaced by the International Cooperation Review Group (ICRG) that ran until 2009. The ICRG's use of MERs was instrumental in later creating two lists: the greylist, making up countries with significant deficiencies in AML/CFT practices, and the blacklist. Of the 23 countries that were initially listed as NCCTs (15 in 2000 and 8 in 2001), today only Iran, North Korea and Myanmar are present.

In 2010, the FATF members altered the process to its currentday setting – thus seizing ultimate control. During all this time, only Iran and North Korea have faced major calls by the FATF for countermeasures, with Myanmar joining them in late 2022 following unaddressed failures dating back to 2018. Still, it has not been plain sailing for the FATF watchlist process. As far back as 1991 in the FATF Annual Report the idea of whitelists was raised – those countries with strong AML/CFT systems but not fully compliant. Yet this option failed to generate sufficient consensus, suggesting the solution was never truly set to gain full global appeal, instead a level of appeal attributed only to a select group of countries. Perhaps countries which wanted a level of fairness in what was about to come tumbling down upon them?

The FATF watchlist has since spawned other lists, many helping the FATF's defensible position of making companies think twice about trading with those on any watchlist. Transparency International's Corruption Perceptions Index (CPI) is one such list.