Last week we reported on steps taken by South Africa to enable its removal from the Financial Action Task Force (FATF) grey list, to which the country was added in February 2023.
The FATF is the international standard-setting body that oversees global compliance with anti-money laundering (AML) and counter financing of terrorism (CFT) rules. Its grey list refers to Jurisdictions under Increased Monitoring¸ which have been identified as having gaps in their legislation in this regard. Countries placed on this list are “actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring”.
On 21 February the FATF announced the upgrade of four of South Africa’s six outstanding action items at the conclusion of its latest plenary meeting in Paris, France. The organisation adopted the report and recommendations of the Africa Joint Group on 21 February 2025 and noted South Africa’s progress.
“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 beneficial ownership information on legal persons and arrangements, and applying sanctions for breaches of violation by legal persons to beneficial ownership obligations.”
South Africa is now deemed to have addressed or largely addressed 20 of the 22 action items in its action plan, said the National Treasury in a statement, meaning that there are just two items to be resolved in the next reporting period that runs from March 2025 to June 2025. “This would enable South Africa to be considered for delisting from the FATF grey list in October 2025.”
The FATF advised South Africa to continue to work on implementing its action plan to address these remaining strategic deficiencies – they are significant ones, however, and the most demanding to accomplish, says Treasury. The country must demonstrate a sustained increase in investigations and prosecutions of serious and complex money laundering, in particular involving professional money laundering networks or enablers and third-party money laundering in line with its risk profile. It must also demonstrate a sustained increase in the effective identification, investigation, and prosecution of the full range of terrorism financing activities, consistent with its terrorism financing risk profile.
“Treasury notes the on-going 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.”
Investigation and prosecution teams are working closely in terms of a prosecution-guided investigation strategy to ensure that South Africa is able to demonstrate the sustained progress as required by FATF, said the treasury.
“These improvements are critical not just for getting off the grey list, but, critically, for strengthening the fight against crime and corruption.”
