SA makes strides in addressing anti-money laundering compliance

Cape Town – South Africa has reportedly made significant progress in addressing technical compliance issues in its anti-money laundering system, according to the National Treasury.

The Financial Action Task Force (FATF) recently re-rated 18 out of 20 deficiencies, upgrading 15 to no longer deficient and leaving the country with five technical compliance deficiencies.

“On 27 October 2023, the FATF Plenary formally re-rated 18 of the 20 deficiencies, based on the progress made by the South African authorities in the two-year period following the 2021 mutual evaluation (MER). Of these, fifteen were upgraded to be no longer deficient, as 14 recommendations were now fully or largely compliant, and one recommendation was rated as not being applicable to South Africa.

“Following these re-ratings, South Africa is now deemed to be fully or largely compliant (or not deficient) in 35 of the 40 FATF Recommendations, including in five of the six core FATF Recommendations. This means that South Africa is left with five deficiencies in technical compliance (including three of the 18 which were upgraded from non-compliant to partially compliant), and two which remain as partially compliant since 2021,” the National Treasury said in a statement.

However, the report does not address the effectiveness deficiencies outlined in the mutually agreed upon Action Plan, crucial for South Africa to exit the FATF “grey list.”

“Overcoming the effectiveness deficiencies is essential for South Africa to exit the FATF “grey list”.

The government has taken steps to implement the Action Plan, including establishing the Interdepartmental Committee on Anti-Money Laundering and Combating of Terrorism Financing.

The FATF noted positive progress but emphasized sustained efforts are required to address remaining actions and demonstrate their sustainability.