SA has completed all 22 action items that were required by the international body that greylisted the country in February 2023, opening the way for a possible lifting of the listing in October this year.
The Financial Action Task Force (FATF) greylisted the country because of the weaknesses of its regime to combat money laundering and the financing of terrorism.
The greylisting has had a significant effect on the cost of doing business and correspondent banking relationships with more due diligence requirements being imposed.
The government and its agencies have been hard at work over the last two years to address the weaknesses highlighted by FATF including legislation to close loopholes, such as the lack of beneficial ownership regulations.
The completion of the 22 actions in the action plan paves the way for the final step before the FATF can delist SA, which is an on-site visit by the FATF Africa Joint Group before the next FATF plenary. If the outcome is positive SA's greylisting will be lifted in October.
During the on-site visit, the group will confirm the SA’s ongoing commitment to the implementation of the country’s fight against money laundering, terror financing and other financial crimes.
Exiting the FATF greylist is a significant step forward as SA continues to improve and strengthen its supervisory and criminal justice systems.
— The National Treasury
FATF said SA’s progress warranted this on-site assessment to verify that critical anti-money laundering and the combating of the financing of ferrorism (AML/CFT) reforms have been implemented, and that the necessary political commitment remains in place to sustain progress.
In a statement on Friday night, the National Treasury said it was the efforts and commitment of the law enforcement entities, especially the Hawks, SA Police Service, the State Security Agency and the National Prosecuting Authority, that were responsible “for the sustained increase in investigations and prosecutions of serious and complex money laundering and terror financing activities”.
“This made it possible for SA to secure the upgrades of the last two remaining action items, often considered to be the most difficult, in the current reporting cycle. This was recognised by the FATF,” the statement said.
The National Treasury said the improvements to SA’s AML/CFT regime were particularly important given the legacy of state capture, one element of which was that law enforcement and prosecuting institutions were deliberately weakened.
“Improvements in these domains are critical not just for getting off the greylist, but for strengthening the fight against crime and corruption, and for contributing to the integrity of the South African financial system,” it said.
“Exiting the FATF greylist is a significant step forward as SA continues to improve and strengthen its supervisory and criminal justice systems.”
The National Treasury said preparations for the on-site visit had started.
FATF lifted the greylisting of Mali, Tanzania, Nigeria, Mozambique and Burkina Faso who, like SA, were deemed to have substantially completed their action plans, and for whom on-site assessments were also approved.
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