Treasury working to remove SA off ‘grey list’ by 2025
National Treasury says it's working towards the removal of South Africa from the so-called grey list by next year.
The Financial Action Task Force, a global financial watchdog, greylisted the country a year ago.
This was due to failures by the South African government to enforce international standards and regulations pertaining to anti-money laundering and terrorist financing.
What has the progress been so far?
Treasury says it has made significant progress in building a financial system that is less vulnerable to abuse and illicit financial activities.
This was revealed in the 2024 financial sector review documents following last week's budget.
This involves both legislative and regulatory changes, as well as improvements in the implementation and application of these laws and regulations.
Treasury insists that South Africa will be off the greylist by February next year.
It, however, still needs to address at least five outstanding technical deficiencies out of 22 that the Financial Action Task Force raised.
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Economic Professor at North-West University, Waldo Krugell, says while it is possible to meet the deadline, it will require more work.
"Much of the remaining work are things that are going to take time, like demonstrating a sustained increase in investigations and prosecutions of serious and complex money laundering and a range of terrorism financing activities that are in line with South Africa's risk profile.
“Treasury had said that they are optimistic about the progress, but it is going to take more time.
“So, for this year, we are still on the grey list, and I think this has been priced in by exporters, banks and markets, so it shouldn't have too much effect on doing business here for the moment," says Krugell.
Once all measures are implemented and the improvements are deemed sustainable, South Africa will qualify to be removed from the grey list.
Treasury said another update on the progress will be implemented every four months.
"The October 2023 FATF plenary noted that South Africa is making progress, including largely addressing two action plan items. Additional feedback will be received in the February 2024 FATF plenary. Addressing all the remaining actions and demonstrating that improvements are sustainable by February 2025 will require a significant effort from all the relevant South African authorities,” it said.
