It has been just over a year since South Africa was placed on the Financial Action Task Force's ("FATF") greylist, following its failure to implement the recommendations contained in FATF's 2021 mutual evaluation report.

South Africa remains under the radar of the FATF for its shortcomings in its Anti-Money Laundering ("AML") and Counter-Terrorist Financing ("CTF") regime. As one of the jurisdictions that is increasingly being monitored by the FATF, South Africa is actively working with FATF to address deficiencies in its AML/CTF regime and is required to report on its progress to address its strategic deficiencies.

South Africa had its progress reviewed by the FATF in October 2023, with the results of this review having been published on 23 February 2024. In terms of this publication, the FATF recognises the steps taken by South Africa towards improving its AML/CTF regime. However, South Africa still has a long way to go with 5 recommendations rated as "Compliant" and 29 rated as "Largely Compliant".

A delegation of government officials, including from the National Treasury, attended the FATF's plenary meeting in Paris in February 2024. During this meeting, the FATF acknowledged South Africa's work to address the AML/CTF deficiencies including increasing the use of financial intelligence from the Financial Intelligence Centre's ongoing investigations.

However, the FATF has indicated that South Africa should continue to implement its action plan to address its strategic deficiencies by, amongst other things;

  • Implementing a comprehensive national CTF strategy.
  • Demonstrating a sustained increase in investigating and prosecuting serious and complex money laundering crimes.
  • Enhancing methods for the confiscation of proceeds of financial crimes.
  • Demonstrating effective mechanisms to identify individuals and entities that meet the criteria for domestic designation.
  • Ensuring that authorities can quickly establish who the beneficial owners of companies are; and
  • Applying sanctions where there are violations of the AML/CTF regime and beneficial ownership obligations.

The next assessment of South Africa's progress in addressing the deficiencies raised by FATF will take place in February 2025. It is thus fair to assume that the country will remain on the greylist, at least, until then.

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