South Africa is now deemed to have largely addressed 16 of the 22 action items in its Action Plan to exit the Financial Action Task Force (FATF) grey list.
This leaves the country with six outstanding action items to be addressed for the last scheduled reporting cycle, concluding in February 2025.
The FATF is the international standard-setting body that oversees global compliance with anti-money laundering rules.
The FATF grey list refers to the FATF's practice of publicly identifying countries with strategic AML/CFT deficiencies. The FATF maintains two such lists with one being jurisdictions under "increased monitoring" that are actively working with the FATF to address strategic deficiencies in their regimes" and secondly "high-risk jurisdictions subject to a call for action" that are not actively engaging with the FATF to address these deficiencies.
"National Treasury welcomes the progress made by all agencies in ensuring South Africa now meets 16 of the 22 action items, with only six action items remaining. It emphasises 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, ensuring that these improvements are indeed both sustainable and effective," Treasury said on Friday.
South Africa is now left with one reporting cycle 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, terror financing and unlicensed cross-border money or value transfer services (MVTS).
"The remaining three relate to the timely access of beneficial ownership information in respect of companies and trusts, and the imposition of remedial action and dissuasive sanctions by designated anti-money laundering and counter-terrorist financing (AML/CFT) supervisors."
READ | SA continues work to exit grey list
If South Africa is successful in addressing all remaining action items in the next reporting cycle, the February 2025 FATF Plenary will authorise an onsite visit by the FATF Africa Joint Group to confirm their assessment on the progress of all action items. CIPThis would happen around May 2025.
"If the onsite assessment results in a positive outcome, the FATF Africa Joint Group will recommend to the June 2025 FATF Plenary that South Africa be delisted from the FATF grey list.
"However, if the FATF Africa Joint Group assesses that South Africa has not adequately addressed all remaining action items in February 2025, South Africa will be required to continue reporting back to the FATF Africa Joint Group every four months until all the action items have been addressed. Hence the exit from greylisting will be moved from June 2025 to October 2025, or later," National Treasury said.
South Africa was grey listed by the FATF in February 2023 for not complying with international standards that relate to money laundering and addressing illicit financial flows.
Work of the interdepartmental committee
The interdepartmental committee chaired by National Treasury is co-ordinating the process to exit greylisting, and has been reporting regularly to Cabinet, and the Justice, Crime Prevention and Security (JCPS) cluster.
"It has provided effective leadership and co-ordination to ensure the upgrading of action items related to outbound mutual legal assistance requests, seizure and confiscation of proceeds of crime, implementation of terror financing strategy and ensuring the effective implementation of targeted financial sanctions.
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"It continues to oversee further progress in 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 related to beneficial ownership registries is out of date as it was due in September 2024, as the coverage for both companies and trusts was assessed to be too low by the FATF Africa Joint Group in September 2024.
"It is incumbent upon all companies and trusts to ensure they have registered accurate beneficial ownership information with the CIPC [Companies and Intellectual Property Commission] and Masters Office respectively, in accordance with their legal obligations.
"National Treasury calls upon all companies and professional trustee service providers to ensure registration by companies and trusts they engage (or involved) with before 30 November 2024, to significantly increase the coverage in beneficial ownership registries."
