The Financial Action Task Force (FATF) has placed South Africa on its grey list due to concerns about its capacity to fight financial crime.
However, FATF made it clear that South Africa has already made significant progress on many of the recommended actions to improve its anti-financial crime systems, including developing stronger national anti-money laundering and terrorism financing policies.
South Africa has committed to working with FATF to strengthen the effectiveness of its anti-money laundering and terrorism financing regime. FATF will closely monitor South Africa’s progress in implementing this plan.
The priority now is to ensure that South Africa is removed from the grey list as soon as possible. It is worth noting that South African banks already follow global best practices.
For more information about how this affects you, please contact us for more information.
DID YOU KNOW?
What is grey listing?
Essentially, it means that banks will now be required to apply enhanced security to all payments to and from South Africa. It is not the same as a downgrade and does not have the same impact.
Why was South Africa grey listed?
An investigation determined that South Africa did not do enough to combat money laundering and the financing of terrorism. However, the grey list must be seen as an opportunity for the country to resolve these issues and be delisted. In other words, it’s not permanent.
How long will this situation last?
On average, grey listing ends after 3 years of efforts by a listed country to fix the issues. There are positive exceptions e.g. Mauritius was listed in February 2020 for similar reasons and was off the list by October 2021. South Africa has to be delisted by the end of January 2025 and there is always the possibility this might happen sooner.
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