SA Makes Headway in Exiting FATF Grey List, Now Tackling Final Action Items

National Treasury highlighted that while substantial progress has been made, significant efforts are still required to address the remaining items.

South Africa has met 16 of the 22 action items required to exit the Financial Action Task Force (FATF) grey list, as announced by the National Treasury. This leaves six outstanding action items that must be addressed ahead of the last reporting cycle, concluding in February 2025. The FATF, an international standard-setting body, identifies countries with strategic anti-money laundering (AML) and counter-terrorist financing (CFT) deficiencies through its grey list.

National Treasury highlighted that while substantial progress has been made, significant efforts are still required to address the remaining items. “South Africa is working hard to address all outstanding action items by February 2025, though this remains a challenging task,” Treasury said on Friday. “All relevant agencies and authorities must continue to ensure these improvements are sustainable and effective.”

The remaining action items are divided into two main areas. The first set, focused on investigation and prosecution, aims to increase responses to complex money laundering, terror financing, and cross-border money or value transfer services (MVTS). The second set involves ensuring quick and accurate access to beneficial ownership information for companies and trusts, as well as imposing sanctions by AML/CFT supervisors.

Interdepartmental Committee and Compliance Updates

An interdepartmental committee, led by National Treasury and working closely with the Justice, Crime Prevention, and Security (JCPS) cluster, has driven coordination efforts to secure these advances. This committee has ensured compliance with outbound mutual legal assistance requests, seizure and confiscation of crime proceeds, and targeted sanctions.

Challenges remain, however, especially with updating beneficial ownership registries. As of the FATF Africa Joint Group’s review in September 2024, coverage of beneficial ownership for both companies and trusts remains too low. To address this, the Treasury has urged all companies and trustee service providers to register accurate beneficial ownership information by November 30, 2024, with the Companies and Intellectual Property Commission (CIPC) and Masters Office.

Potential FATF Assessment and Grey List Exit

If South Africa successfully addresses the six remaining items in February 2025, the FATF Plenary will authorize an on-site assessment by the FATF Africa Joint Group around May 2025. A positive outcome in this assessment could lead to a recommendation for South Africa’s delisting from the grey list at the June 2025 FATF Plenary. However, if any deficiencies persist, South Africa will be required to report progress every four months, potentially delaying its grey list exit to October 2025 or beyond.

South Africa’s initial greylisting in February 2023 highlighted deficiencies in meeting international standards on money laundering and illicit financial flows. Since then, the country’s robust response has advanced its position, with active engagement from relevant departments to strengthen financial integrity and address the remaining concerns to restore full compliance.