Tanzania's removal from the Financial Action Task Force (FATF) grey list in July 2025 has strengthened the country's financial credibility and boosted investor confidence. The FATF grey list comprises countries with strategic weaknesses in their systems for combating money laundering, terrorist financing, and the financing of weapons of mass destruction.
The country's removal from the list was made possible by the implementation of recommendations issued by FATF to strengthen its legal and regulatory framework. According to Ms Lilian Mawala, Bank of Tanzania (BoT) Legal Officer, Tanzania earned its removal after addressing the shortcomings within agreed timeframes.
Countries placed on the grey list face heightened scrutiny in international financial dealings, making it difficult for their financial institutions to establish relationships with international counterparts. Ms Mawala said that previously, additional conditions were often imposed on financial transactions involving Tanzania, but this is no longer the case.
Following the reforms, Tanzanian financial institutions can now cooperate more easily with global partners, making international transactions smoother. The country's financial system is now recognised as having safeguards capable of preventing money laundering, terrorist financing, and the financing of weapons of mass destruction.
The reforms included amending key legislation, such as the Anti-Money Laundering Act, closing regulatory gaps, and strengthening oversight across the financial sector. Authorities also strengthened supervision of financial institutions and introduced mechanisms for enforcing targeted financial sanctions against individuals linked to terrorism.
The Bank of Tanzania was assigned specific responsibilities for regulating and supervising virtual assets and virtual asset service providers. The BoT is required to supervise these stakeholders to ensure that they continue to meet various requirements, including those related to conducting business and transfers.
Tanzania will undergo another assessment in 2028, when evaluators will examine how effectively the country has implemented the remaining recommendations issued in 2025. The assessment will be conducted through the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), and the outcome is expected to support cross-border trade, attract investment, and expand economic opportunities for citizens.
Key points
- Tanzania's removal from FATF grey list boosts financial credibility and eases international transactions.
- The country's financial system now has safeguards to prevent money laundering and terrorist financing.
- Tanzania will undergo another assessment in 2028 to evaluate its compliance with international standards.
