South Africa registers progress in leaving gray list – LNN

South Africa is now considered to have largely addressed 16 of the 22 action points in its action plan to leave the Financial Action Task Force (FATF) gray list.

This leaves the country with six outstanding action items to be addressed before the last scheduled reporting cycle, which ends in February 2025.

The FATF is the international standard-setting body that oversees global compliance with anti-money laundering rules.

The FATF Gray List refers to the FATF’s practice of publicly identifying countries with strategic deficiencies in the areas of combating money laundering (AML) and the financing of terrorism (CTF). The FATF maintains two such lists, one of which is jurisdictions that are under ‘heightened scrutiny’ and actively working with the FATF to address strategic deficiencies in their ‘regimes’, and secondly ‘high-risk jurisdictions’ that are subject to a ‘call to action’ that are not actively working with the FATF to address these shortcomings.

“The National Treasury welcomes the progress made by all agencies to ensure that South Africa now meets 16 of the 22 action points, with only six action points remaining. It is emphasized that while South Africa is working hard to address all outstanding action items by February 2025, this remains a difficult challenge.

“All relevant agencies and authorities must continue to make substantial progress and ensure that these improvements are indeed both sustainable and effective,” the National Treasury said on Friday.

South Africa now has one reporting cycle left to address the remaining six action items.

“Three of these relate to demonstrating a sustained increase in the investigation and prosecution of complex money laundering, terrorist financing and cross-border unlicensed money or value transfer services.

“The remaining three relate to the timely access to beneficial ownership information relating to companies and trusts, and the imposition of corrective measures and deterrent sanctions by designated AML/CTF supervisors.”

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 confirm their assessment of progress on all action items . This would happen around May.

“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, South Africa will be required to continue reporting to the FATF Africa Joint Group every four months until all action items have been addressed. . Therefore, the exit from the gray list will be moved from June 2025 to October 2025 or later,” the National Ministry of Finance said.

South Africa was placed on the FATF gray list in February 2023 for failing to meet international standards related to money laundering and tackling illicit financial flows.

Activities of the interdepartmental committee

The interdepartmental committee chaired by the National Ministry of Finance coordinates the process to get out of the gray list and reports regularly to the cabinet and the Justice, Crime Prevention and Security cluster.

“It has provided effective leadership and coordination to ensure the improvement of action items related to outgoing mutual legal assistance requests, the seizure and confiscation of proceeds of crime, the implementation of a terrorist financing strategy and ensuring its effective implementation of targeted financial sanctions.

“It continues to monitor further progress on at least four of the six outstanding action items, including three related to investigations and prosecutions.

“The interdepartmental committee also notes that the action item on beneficial ownership registers is outdated as it should have taken place in September as coverage for both companies and trusts was assessed as too low by the FATF Africa Joint Group in September.

“It is incumbent on all companies and trusts to ensure that they have accurate beneficial ownership information registered with the Companies and Intellectual Property Commission and Masters Office respectively, in accordance with their legal obligations.

“National Treasury is calling on all companies and professional service providers to ensure the registration of companies and trusts they work with (or are involved with) by November 30, to significantly increase coverage in beneficial ownership registers.” – SAnews.gov.za