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Risk expert says regulators will up the ante to act against non-compliant entities.
Treasury is confident that complying with 37 of 39 applicable recommendations positions SA well for the assessment in October. Picture: AdobeStock
To exit the grey list in October, National Treasury says South Africa “is working” to address two outstanding action items by June.
The country’s progress regarding the Financial Action Task Force (FATF) action items was recently assessed at the February 2025 plenary.
“The plenary confirmed that two action items remain,” Treasury notes in its 2025 Budget Review.
“These relate to demonstrating a sustained increase in the investigation and prosecution of complex money laundering and terror financing.”
South Africa is deemed to “partially comply” with the two outstanding recommendations, which relate to non-profit organisations and cash couriers.
“Meeting the outstanding recommendations does not affect the process for the country to exit the FATF grey list, as greylisting is a consequence of the assessment of the extent to which a country’s anti-money laundering laws and frameworks are applied effectively,” Treasury clarifies.
It is confident that complying with 37 of 39 applicable recommendations positions South Africa well for the 2026/27 mutual evaluation assessment in October.
National Treasury will also introduce additional legislation this year to further improve the extent of compliance with the FATF recommendations.
ALSO READ: South Africa making more progress to get off FATF grey list
‘We need to see outcomes’
Vincent Gaudel, financial crime compliance expert at LexisNexis Risk Solutions, told Moneyweb recently in an interview that “turning rules into actual outcomes” is what will get SA off the grey list.
“Putting rules into place is a condition, but it’s not a guarantee. Now we need to see the outcomes – the world is waiting for that.”
He expects that South Africa’s regulators will up the ante to act against entities that do not comply with anti-money laundering regulations.
The Reserve Bank’s Prudential Authority has, for example, imposed a series of sanctions on some financial institutions over the past year, including Standard Bank, Capitec Bank, Old Mutual, Bidvest Bank and HSBC, for not being fully compliant with South Africa’s Financial Intelligence Centre Act (Fica).
South Africa was placed on the grey list in February 2023 due to deficiencies in its anti-money laundering, counter-terrorist financing, and counter-proliferation financing framework.
ALSO READ: SA stays on greylist due to its remaining strategic deficiencies
Exiting the list
Gaudel notes that it took other African countries on average 28 months – two years and one more plenary session – to exit the grey list (12 of the 24 countries currently on the grey list are in Africa).
“If you apply that to South Africa, it would mean potentially a removal from the grey list in June 2025.”
The exception was Mauritius, which managed to exit the grey list in an 18-month period by being extremely proactive in fixing deficiencies and submitting multiple reassessment requests.
Mauritius was greylisted in 2020.
“The urgency for Mauritius to be removed from the grey list so soon is because the country is heavily exposed to international finance. It was almost vital for them to get off. Mauritius’s GDP is very reliant on international finance,” Gaudel notes.
This article was republished from Moneyweb. Read the original here.
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