Financial crime watchdog adds SA to group of greylisted states

The financial action task force (FATF), an international financial crime watchdog, has added South Africa and Nigeria to its list of greylisted countries over poor anti-terrorism and money-laundering controls.

South Africa has been a member of the FATF, which is tasked with combating money-laundering and the financing of terrorism across national borders, since 2003.

In 2021, the FATF published its mutual evaluation report highlighting vulnerabilities in the country’s anti-money-laundering system.

Delivering his Budget Speech on Wednesday, Finance Minister Enoch Godongwana said South Africa has made substantial progress to address these weaknesses.

However, Godongwana warned that the country still needs to prepare for the worst.

He said: “Two laws have been enacted to address the technical deficiencies in the legislative framework, namely the General Laws Amendment Act of 2022 and the Protection of Constitutional Democracy Against Terrorist and Related Activities Amendment Act.

“The laws address 15 of the 20 legislative deficiencies identified by FATF. The remaining five deficiencies will be addressed through regulations and practices that do not require legislation.

“We recognise the need to be more effective in implementing our laws, particularly in fighting organised and sophisticated crimes. 

“Addressing the FATF issues is part of a broader fight against corruption, crime, state capture, and the deliberate weakening of the institutions of law and order in our country.”

During a plenary in Paris on Friday, FATF confirmed that South Africa has indeed made progress on recommended actions to improve its systems.

However, the financial crime watchdog said the country will remain under monitoring. 

“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring,” according to a FATF statement.

This list is often externally referred to as the “grey list”.

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