South Africa is approaching a critical deadline set by the Financial Action Task Force (FATF) and will soon know whether it will be added to the global grey list or not.
Of recent, South Africa underwent a mutual evaluation of its anti-money laundering and combating the financing of terrorism (AML/CFT) system by the FATF between April 2019 and June 2021, with the final report being finalised and published in an October 2021 Mutual Evaluation Report.
The country engaged with representatives of the FATF in January 2023, and the group is now drawing up a report and recommendations, which will be debated and discussed at the FATF plenary sitting scheduled for 22 to 24 February.
The Intellidex founder and analyst, Stuard Theobald said that it is very likelyhood that South Africa will indeed be added to the grey list, and that the next challenge for the country is getting off of it as soon as possible.
“The consequences of grey-listing are that other countries must treat SA with a heightened level of suspicion. Several countries require their institutions to apply ‘enhanced due diligence’ of SA counterparts. In practice, this means more frequent assessments, requests for more details on sources of funds and procedures, and more senior management engagement with foreign counterparts. That is if those counterparts will do business with South Africans at all,” he said.
However, the reputational damage to South Africa will be immense, exposing South Africa’s failures and shortcomings to the world.
Since the initial publishing of the FATF report, the South African government and its authorities have been fast-tracking legislation to address the 20 deficiencies that were identified.
