The National Treasury has expressed satisfaction with the progress being made to remove South Africa from the Financial Action Task Force (FATF) grey list.
This follows an announcement by the FATF on Friday, in which it upgraded four of the six outstanding action items at the conclusion of its latest plenary meetings in Paris, France.
The FATF is the international standard-setting body that oversees global compliance with anti-money laundering rules.
The FATF grey list refers to the FATF’s practice of publicly identifying countries with strategic AML/CFT deficiencies.
The FATF maintains two such lists with one being jurisdictions under “increased monitoring” that are actively working with the FATF to address strategic deficiencies in their regimes” and secondly “high-risk jurisdictions subject to a call for action” that are not actively engaging with the FATF to address these deficiencies.
South Africa was grey listed by the FATF in February 2023 for not complying with international standards that relate to money laundering and addressing illicit financial flows.
According to the National Treasury, South Africa has now addressed or largely addressed 20 out of the 22 action items outlined in its Action Plan. The two remaining items are expected to be addressed in the reporting period 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.
The FATF Plenary adopted the report and recommendations of the Africa Joint Group on 21 February 2025 and noted South Africa’s progress in its public statement: “Jurisdictions under Increased Monitoring – 21 February 2025” (FATF Update on grey-listed countries February 2025).
The National Treasury commended the collaborative efforts of financial and non-financial regulators, beneficial ownership registries, and law enforcement agencies in securing the upgrade of the four action items.
“National Treasury welcomes 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 notes the ongoing efforts by all the law enforcement agencies to demonstrate the significant progress in respect of the two action items not yet upgraded, relating to the investigation and prosecution of serious and complex money laundering and of terrorist financing,” Treasury said.
The FATF statement issued after its Plenary states the following in relation to South Africa:
“Since February 2023, when South Africa made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, South Africa has taken steps towards improving its AML/CFT regime including by demonstrating that all supervisors apply effective, proportionate, and effective sanctions, ensuring competent authorities have timely access to accurate and up to date BO information on legal persons and arrangements and applying sanctions for breaches of violation by legal persons to beneficial ownership obligations.
“South Africa should continue to work on implementing its action plan to address its remaining strategic deficiency on demonstrating a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF activities in line with its risk profile,” said the FATF.
“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 activities reflects the fact that these are the most demanding goals of every country’s systems for combating money laundering and terrorist financing, particularly since they require a country to demonstrate that the improvements made are sustained over successive reporting periods,” Treasury explained.
Treasury emphasised that South Africa continues to address both outstanding action items by June 2025 to enable an exit from grey listing by October 2025.
“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,” Treasury said. – SAnews.gov.za
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