South Africa remains on FATF’s greylist

South Africa

Cape Town — Following the latest meeting of the Financial Action Task Force (FATF), South Africa remain greylisted as the country has not done enough to combat corruption and money laundering, among other issues.

South Africa was greylisted in February 2023 and has not done enough to combat the struggles the country faces in order to upgrade its status once again. After the latest meeting, the FAFT ruled that South Africa needs to do more to address its strategic deficiencies, EWN reported.

According to The Citizen, South Africa made a high-level political commitment in February last year to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group to strengthen the effectiveness of its anti-money laundering/combating the financing of terrorism regime.

The FATF said that South Africa had taken steps towards combating money laundering and corruption, as well as improving its terrorism financing risk assessment and enhancing the capacity for relevant counter terrorism.

The FATF now says South Africa should continue to implement its action plan to address its remaining strategic deficiencies, which includes a sustained increase in legal assistance  and an increase in investigations and prosecutions of serious and complex money laundering and the full range of terrorism financing activities in line with its risk profile, among many others

According to Candice Dookran, a compliance expert, greylisting leads to a substantial decline in capital flow and foreign investment, which results in a stagnating economy. She said government and state-owned companies will find it more difficult to borrow from international banks such as the IMF and World Bank.

“Greylisting could also lead to currency degradation, inflation and trade deficits and there is the possibility that South Africa could face sanctions.” she said.

While South Africa remains greylisted, Monaco and Venezuela became the latest countries to join the list, while Jamaica and Türkiye have been removed.

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Compiled by Matthew Petersen

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