Deadline 2025: South Africa's Fight to Exit the FATF Grey Zone
Update on South Africa's Status with the FATF Greylist as of June 2024
As South Africa remains on the Financial Action Task Force (FATF) greylist, efforts must be doubled to rectify its lacking anti-money laundering and terrorism financing controls. Following the June 2024 FATF meetings in Singapore, the update shows that South Africa has successfully addressed 8 of the required 22 action items.
That leaves 14 critical tasks to be completed by January 2025. National Treasury acknowledges the significant challenge but remains focused on honoring the FATF's timelines. South Africa was initially placed on the FATF greylist in February 2023, prompting a nationwide effort to meet the stringent requirements.
While we hope that South Africa is removed from the greylist by mid-2025, the decision is pending a positive review from a FATF onsite visit in April or May 2025. This visit will assess whether all remedial actions are satisfactorily implemented. If unresolved issues persist by the January 2025 deadline, South Africa will need to maintain detailed periodic reports to the FATF.
What has been done
Progress includes enhancements to various laws against terrorist financing, better use of financial intelligence for investigating money laundering, and stronger legal frameworks for financial sanctions. Still, major challenges remain, particularly with regulating cross-border financial services and improving transparency around company ownership.
What still needs to be done
South Africa must address the following 14 action items by January 2025 to comply with the FATF greylist requirements:
Enhanced Supervision: Improve risk-based supervision and training for high-risk non-financial businesses.
Beneficial Ownership: Ensure timely access to accurate ownership information of legal entities.
Legal Transparency: Apply sanctions for non-compliance with transparency obligations of legal entities.
Crime Proceeds Management: Improve the identification and confiscation of crime-related proceeds.
Financial Intelligence Usage: Increase proactive use of financial intelligence in money laundering investigations.
Complex Money Laundering: Intensify investigations and prosecutions of complex money laundering cases.
Terrorist Financing Sanctions: Implement terrorist financing sanctions effectively and promptly.
Domestic Designation Effectiveness: Establish mechanisms to identify entities for domestic sanctions.
Unlicensed Financial Services: Take action against unlicensed cross-border financial services.
Compliance Monitoring: Ensure AML/CFT supervisors enforce follow-up actions and sanctions.
Authority Capacity Building: Enhance the training and resources for agencies involved in combating terrorism financing.
Terrorism Financing Prosecutions: Boost efforts to identify and prosecute terrorism financing.
National Strategy Update: Update and implement a national strategy against terrorism financing.
Address R.5 Deficiencies: Rectify specific regulatory deficiencies as per FATF recommendations.
Read the full media release here.
