South Africa Nears FATF Greylist Exit as Key Reforms Implemented

South Africa is making progress toward exiting the Financial Action Task Force (FATF) greylist, with key anti-money laundering and counter-terrorism financing deficiencies now addressed, according to the Companies and Intellectual Property Commission (CIPC).

The country was greylisted in February 2023 due to gaps in its financial crime prevention framework. Since then, efforts have focused on compliance improvements, including the Beneficial Ownership Register (BOR), which allows authorities timely access to financial crime data and enables remedial sanctions.

What Does Greylisting Mean?

Greylisting places a country under increased monitoring by the FATF due to weaknesses in preventing:

• Money laundering
• Terrorism financing
• Proliferation financing

It affects economic stability by increasing risks for foreign investment, capital markets, and cross-border transactions.

Key Progress in South Africa’s FATF Compliance

The CIPC Commissioner, Rory Voller, expressed confidence that South Africa’s 18-month-long reforms would yield a favorable FATF decision, which is expected to be announced in the coming days following a Paris conference.

Key Developments in Compliance:

Beneficial Ownership Register (BOR) Strengthened: Over 1.1 million disclosures have been submitted, with daily updates improving compliance with the Companies Act.

Legislative Amendments: A new omnibus bill enhances the CIPC’s authority, including the ability to impose fines for non-compliance.

Law Enforcement Access to BOR: Authorities, including prosecutors and investigators, are now actively using the register to prosecute money laundering and terror financing cases.

FATF Action Plan Progress: Out of 22 key action items, 16 have been fully or largely addressed, with six remaining for the February 2025 review.

Challenges & Next Steps

While progress is evident, some challenges remain:

• Limited cooperation from financial entities, including the Banking Association of South Africa, due to concerns over POPIA (Protection of Personal Information Act).
• CIPC seeks additional powers through Companies Act amendments to impose fines for non-compliance.
• Further FATF requirements include ensuring law enforcement consistently utilizes the BOR register for prosecutions.

South Africa’s Expected Greylist Exit Timeline

The National Treasury and CIPC anticipate a formal FATF announcement in February 2025, marking South Africa’s official removal from the greylist. The Paris conference in February 2024 could provide early indications of FATF’s stance on the country’s progress.

Ongoing Investigations into State Capture

Beyond FATF compliance, CIPC Senior Manager Joey Mathekga confirmed that the agency continues state capture investigations, referring high-profile cases involving Transnet, South African Airways, Alexkor, and Eskom to the State Attorney.

South Africa’s regulatory improvements signal a strong push towards financial transparency and compliance with global anti-money laundering standards. The anticipated greylist exit in 2025 would boost the country’s economic credibility, attract foreign investment, and strengthen law enforcement efforts against financial crime.

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