Treasury notes progress to get SA off the FATF greylist
The Financial Action Task Force (FATF) announced on Friday that South Africa has made significant progress in addressing deficiencies in its anti-money laundering and counter-terrorism financing systems.
South Africa was placed on the grey list in February 2023 because the government failed to meet international standards for combating money laundering and terrorism financing.
Although progress has been made, the global watchdog has urged South Africa to continue implementing its action plan to resolve remaining issues.
Earlier this year, the Treasury reported improvements aimed at building a financial system less vulnerable to abuse and illicit activities.
However, six of the 22 technical deficiencies identified by the FATF remain to be addressed, requiring further legislative and regulatory changes and improvements in enforcement.
The FATF announced nine upgrades for South Africa across the 22 action items required to address deficiencies, leaving the country with one reporting cycle to resolve the remaining six.
The National Treasury noted that three of these action items involve demonstrating a sustained increase in the investigation and prosecution of complex money laundering, terror financing, and unlicensed cross-border Money or Value Transfer Services (MVTS).
Treasury has previously indicated that South Africa aims to exit the grey list by February 2025.
"If South Africa is successful in addressing all remaining action items in the next reporting cycle, the February 2025 FATF Plenary will authorise an onsite visit by the FATF Africa Joint Group to confirm their assessment on the progress of all action items.
“This would happen around May 2025. If the onsite assessment results in a positive outcome, the FATF Africa Joint Group will recommend to the June 2025 FATF Plenary that South Africa be delisted from the FATF grey list.
“However, if the FATF Africa Joint Group assesses that South Africa has not adequately addressed all remaining action items in February 2025, South Africa will be required to continue reporting back to the FATF Africa Joint Group every four months until all the action items have been addressed.
“Hence the exit from grey listing will be moved from June 2025 to October 2025, or later," reads the statement by Treasury.
The October FATF Plenary also approved upgrades to South Africa’s compliance with three additional FATF recommendations.
South Africa now fully or largely complies with 37 of the FATF's 40 recommendations, with one deemed inapplicable.
In its reaction on Friday, National Treasury adds in the statement that it welcomes the progress across agencies, highlighting that while South Africa is on track to meet the February 2025 deadline, achieving full compliance remains a challenge.
Treasury called on all relevant agencies to continue making substantial progress to ensure that improvements are both sustainable and effective.
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