Greylisting is not a colour!
What is “Greylisting”?
The Financial Action Task Force (FATF) is a global inter-governmental body that promotes policies and international standards relating to the combating of money laundering and terrorist financing. FAFT maintains a list of countries that are identified as having strategic deficiencies in these areas and this is the list known as the grey list, which is publicly available. Essentially, being on the grey list means that a country needs to improve its strategies for combating these financial crimes.
South Africa has taken a major step towards fighting money laundering and terrorism with their inclusion in the Financial Action Task Force (FATF). However, after an assessment period of one year, it was determined that although great strides have been made, additional action needs to be taken – leading to South Africa being “greylisted” by FATF on 24 February 2023.
What are we doing to counter our “Greylisting” status?
To tackle the “Greylisting” status, the government of South Africa has been collaborating with the FATF to address 8 key areas. A comprehensive action plan is already being rolled out, and any progress will be monitored by this independent body – giving South Africa a great opportunity to put things right!
The Anti-Money Laundering & Combating Terrorism Financing Amendment Act, No.22 of 2022 was recently passed by the South African government. This newly amended regulation of Beneficial Ownership in terms of Companies, Trust Property Control and Financial Sector Regulations will help authorities gain access to ownership records more easily while helping them identify any violations committed by beneficial owners.
With this legislation now passed it is expected that all 8 deficiencies identified by the FATF will be addressed before January 2025 – setting up the country for greater success as it continues working together against illegal money laundering activities!
What is the effect of “Greylisting”?
The devastating impact of international “greylisting” on the nation is far-reaching. It can damage the reputation of the country and significantly impede economic growth, as many services essential for trade are withdrawn or restricted.
How can South Africa be removed from the “grey list”?
To get off the grey list, South Africa will need to undergo a final, on-site assessment and show that all the points on the action plan have been addressed. While this may take some time, the Department of National Treasury expects that the evaluation will take place during 2027/2028.
However, the good news is that if South Africa continues to make improvements and works towards exiting the grey list as quickly as possible, it will have a limited impact on the country’s financial stability.