South Africa edges closer to FATF graylist exit
The country has been on the FATF’s greylist since 2023 because of loose AML/CFT regulations.
South Africa has taken a major step toward exiting the Financial Action Task Force (FATF) grey list, resolving 20 of the 22 shortcomings that landed it there. The country plans to resolve its two remaining action points by June.
The details
- In a media statement, South Africa’s National Treasury announced that the FATF approved the country's progress on four additional action points, leaving two still unresolved.
- If the country resolves the two outstanding points by June, it will be removed from the FATF greylist by October, the National Treasury said.
💡 Be Smart: FATF Greylisting
- The FATF is the global agency tasked with implementing measures to tackle money laundering and terrorism financing activities worldwide.
- While the FATF’s blacklist names countries considered high-risk for money laundering and terrorism financing (ML/FT) because of the loose implementation of ML/FT measures, the greylist is for countries on their way to blacklisting but are under monitoring.
- Greylisted countries also have loose implementation of ML/FT guidelines but have indicated a willingness to work with the FATF to resolve these issues.
- South Africa has been on the FATF’s greylist since 2023 and has been working to get on the international regulator’s good books.
- To completely get off its greylist, the FATF wants the country to demonstrate an increase in the investigation and prosecution of complex money laundering and terrorism financing acts.
Key quotes
- The FATF said:
“South Africa has taken steps towards improving its AML/CFT regime ... [but it] 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.”
- In its media statement, the South African National Treasury said:
“South Africa continues to address both outstanding action items by June 2025 to enable an exit from greylisting 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.”
Why this matters
- Countries look to avoid the FATF’s black and grey lists because global financial institutions shift resources and services away from them due to concerns about loose AML/CFT rules.
- African countries make up 57% of the FATF grey list, highlighting the continent’s challenges in meeting the task force’s standards.
- A growing priority for the FATF is how nations regulate cryptocurrencies, given their rising use in money laundering and terrorist financing.
Zoom out
- In a report last year, the regulator noted that 97% of African countries are partially compliant or non-compliant with its guidelines on implementing crypto regulations to combat ML/FT.
- Kenya and Namibia joined 10 other African countries including South Africa and Nigeria on the FATF’s greylist last year.
- However, since its greylisting in 2023, South Africa has stepped up its crypto regulatory activities, licensing 248 crypto firms.
