On 24 February 2023, South African citizens woke up to the news that South Africa had been greylisted.
After failing to address shortcomings on money laundering and the financing of terrorism which were identified in a 2019 evaluation; international watchdog, the Financial Action Task Force (FATF), has greylisted South Africa along with a list of countries also under increased monitoring. These events can influence investor sentiment.
The Financial Action Task Force (FATF) is a laundering and terrorist financing watchdog for the global community - it aims to set international standards that help prevent illegal activities. It categorizes countries as blacklisted (high-risk) or greylisted (increased monitoring).
When a jurisdiction is placed under increased monitoring or greylisted, it has agreed to find measures to resolve identified deficiencies swiftly under a specific timeframe. South Africa is one of the two countries under increased monitoring due to counter-money laundering, terrorist financing, and proliferation financing. As of 24 February 2023, there were 23 countries on the grey list; Cambodia and Morocco were the two counties that could resolve their issues and be removed from the grey list. Other grey listed countries include the United Arab Emirates, Senegal, the Philippines, Mozambique, the Democratic Republic of Congo and more.
To be removed from the grey list will require efforts and active citizenship from the public and private sector to rebuild the country’s credibility and trust in the global community. To support these efforts, the South African President recently put two laws in place:
- Anti-Money Laundering - General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 (“General Laws Amendment Act”)
- Combating the Financing of Terrorism (AML/CFT). - Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act, 2022 (“POCDATARA Amendment Act”)
For more on what’s been happening locally in South Africa, you can also watch or read highlights from the SONA and BUDGET speeches.
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