South Africa is on course to exit the Financial Action Task Force’s (FATF) Grey List by October after having addressed nearly all the deficiencies that were identified in the country’s financial security systems, National Treasury said Friday.
To meet the final obligations that will enable South Africa to exit the Grey List, the FATF wants South Africa to demonstrate “a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF (terrorist financing).” - these are usually the most demanding goals of every country’s systems.
On Friday, the FATF announced the upgrade of four of the six outstanding action items for South Africa at the conclusion of its latest plenary meetings in Paris, France. South Africa was now deemed to have addressed or largely addressed 20 of the 22 action items in its Action Plan, leaving two items to be addressed in the next reporting period, which runs from March 2025 to June 2025.
“This would enable South Africa to be considered for delisting from the FATF Grey List in October 2025,” National Treasury said in a statement.
National Treasury said it welcomed the efforts of financial and non-financial regulators and beneficial ownership registries and its law enforcement users in securing upgrades for the four action items they were directly responsible for in the current reporting cycle.
Treasury also noted the ongoing efforts by law enforcement agencies to demonstrate progress regarding the two action items not yet upgraded, which relate to the investigation and prosecution of serious and complex money laundering and of terrorist financing.
The FATF statement issued Friday said: “Since February 2023, when South Africa made a high-level political commitment to work with the FATF and ESAAMLG (Eastern and Southern African Anti Money Laundering Group) to strengthen the effectiveness of its AML/CFT regime, South Africa has taken steps towards improving its AML/CFT regime including…”
South Africa had demonstrated that “its supervisors apply proportionate and effective sanctions, ensuring competent authorities have timely access to accurate and up-to-date BO (beneficial ownership) information on legal persons and arrangements and applying sanctions for breaches of violation by legal persons to beneficial ownership obligations.”
The decision by the FATF Plenary to extend the reporting cycle for the two action items on investigations and prosecutions for serious and complex money laundering and terror financing.
“Our investigation and prosecution teams are working closely in terms of a prosecution-guided investigation strategy to ensure that we demonstrate the sustained progress as required by FATF. These improvements are critical not just for getting off the Grey List, but, critically, for strengthening the fight against crime and corruption,” National Treasury said.
BUSINESS REPORT