FATF
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APG keeps Lao PDR's FATF Recommendation 19 rating unchanged
APG kept Lao PDR partially compliant on FATF Recommendation 19, leaving its higher-risk-country countermeasure framework status unchanged
Change
The Asia/Pacific Group on Money Laundering kept Lao PDR's FATF Recommendation 19 (higher-risk countries) rating at partially compliant, finding insufficient progress on the range of countermeasures, independent high-risk-jurisdiction identification and AMLIO's communication to reporting entities.
Why it matters
APG's second enhanced expedited follow-up report leaves Lao PDR's Recommendation 19 rating unchanged at partially compliant despite the March 2025 AMLIO notification and the May 2025 customer due-diligence amendment. APG found the countermeasure framework still over-reliant on enhanced due diligence, without a proportionate countermeasure range, independent high-risk-jurisdiction identification, or a clear AMLIO mechanism to communicate foreign AML/CFT weaknesses to all reporting entities. Lao PDR remains on enhanced expedited follow-up with 16 Recommendations compliant or largely compliant. The report creates no new operator obligation, but the unchanged status is a reference point for country-risk assessment of Lao PDR exposure.
Implications
- — Lao PDR's AML/CFT authorities and AMLIO must broaden the higher-risk-country framework beyond enhanced due diligence — establishing a proportionate range of countermeasures, evidencing independent identification of high-risk jurisdictions from domestic risk assessment, and creating a clear mechanism to communicate foreign AML/CFT weaknesses to all reporting entities — before a future APG re-rating request can succeed.
- — Financial institutions with Lao PDR exposure can treat the unchanged rating as a country-risk reference point: Lao PDR's higher-risk-country framework remains only partially compliant and the jurisdiction stays on enhanced expedited follow-up, which firms may factor into jurisdiction-risk scoring for Lao-linked customers and correspondents.
Who is affected
- — Lao PDR AML/CFT policymakers and competent authorities responsible for the higher-risk-country framework
- — AMLIO, responsible for the countermeasure mandate and communication mechanism to reporting entities
- — Country-risk and financial-crime teams at firms with Lao PDR exposure using FATF/APG status as a jurisdiction-risk input