The Ministry of Finance notes that progress has been made towards removing SA from the FATF gray list

South Africa was placed on the gray list in February 2023 because the government failed to meet international standards for combating money laundering and the financing of terrorism.

While progress has been made, the global watchdog has urged South Africa to continue its action plan to resolve remaining issues.

Earlier this year, the Ministry of Finance reported improvements aimed at building a financial system that is less vulnerable to abuse and illegal activities.

However, six of the 22 technical deficiencies identified by the FATF remain to be addressed, requiring further regulatory changes and improvements in enforcement.

The FATF has announced nine upgrades for South Africa to the 22 action items needed to address the deficiencies, leaving the country with one reporting cycle to resolve the remaining six.

The National Treasury noted that three of these action items relate to demonstrating a sustained increase in the investigation and prosecution of complex money laundering, terrorist financing and unlicensed cross-border money or value transfer services (MVTS).

The Ministry of Finance has previously indicated that South Africa aims to leave the gray list by February 2025.

“If South Africa is successful in addressing all remaining action items in the next reporting cycle, the February 2025 FATF Plenary will authorize an on-site visit by the FATF Africa Joint Group to assess their assessment of the progress of all action items. to confirm.

“This would happen around May 2025. If the on-site assessment leads to a positive outcome, the FATF Africa Joint Group will recommend to the June 2025 FATF Plenary that South Africa be removed from the FATF gray list.

“However, if the FATF Africa Joint Group finds that South Africa has not adequately addressed all remaining action items by February 2025, South Africa will be required to continue reporting to the FATF Africa Joint Group every four months until all action items have been resolved. addressed.

“Hence, the exit from the gray list will be moved from June 2025 to October 2025, or later,” read the statement from the Ministry of Finance.

The October FATF Plenary also approved upgrades to South Africa’s compliance with three additional FATF recommendations.

South Africa now fully or largely complies with 37 of the FATF’s 40 recommendations, one of which is considered not applicable.

In its response on Friday, the National Treasury added that it welcomes the progress across the agencies, stressing that while South Africa is on track to meet the February 2025 deadline, achieving full compliance remains a challenge .

The Ministry of Finance called on all relevant agencies to continue making substantial progress to ensure that improvements are both sustainable and effective.

READ ALSO