SA working to exit FATF greylist by June 2025, says Treasury

The National Treasury said SA, one of Africa’s most industrialised and largest economies, is on track to exit the Financial Action Task Force (FATF) greylist by June 2025, after the conclusion of the FATF plenary meetings in Singapore in June . 

It said it was satisfied with the outcomes of the meetings, with SA having addressed or “largely addressed” eight of the 22 action items in line with specified deadlines, to exit the greylist. 

The FATF, which sets global standards for the combating of money-laundering and terrorism financing, found SA deficient and placed it on the greylist in February 2023. 

“Given the FATF process, Treasury does not expect SA to exit greylisting before June 2025, as per the action plan deadlines,” the Treasury said. 

The FATF plenary did not discuss the delisting of SA from greylisting but focused instead on progress the country had made in addressing the 17 outstanding action items. 

“The FATF plenary accepted the report of the FATF Africa/ Middle East Joint Group that SA has largely addressed three further action items, and hence has 14 outstanding items left to address (from the original 22).” 

The action items have differing deadlines, falling between January 2024 and January 2025. The January 2025 deadline serves as a general guide on the earliest time that SA can be expected to have addressed all the items in the action plan, “which is two years after the placement of a country on the FATF greylist”. 

If any of the action items remain unaddressed by the January 2025 deadline, the country will be required to continue reporting to the FATF every four months, until all the deficiencies have been addressed, the Treasury said.  

It said action items addressed so far relate to the legal provisions criminalising terrorist financing and underpinning SA’s targeted financial sanction regimes, increasing the use of financial intelligence from the Financial Intelligence Centre to support money laundering investigations, and the introduction of risk-based tools to identify higher-risk designated non-financial businesses and professions. 

They also include the updating of the terror financing national risk assessment, and increasing the resources and capacity of relevant authorities.  

“SA is left with two reporting cycles in September 2024 and January 2025 in terms of the action plan. Many of the 14 outstanding items are due in the last two reporting cycles because SA has to demonstrate that the improvements made are sustained over successive reporting periods,” the Treasury said. 

“In the next reporting cycle, SA is required to address (or at least largely address) nine of the outstanding action items in the action plan that are due in September 2024. The final five action items are due in January 2025.” 

Reserve Bank governor Lesetja Kganyago, in his address to the Financial Sector Conduct Authority industry conference in March, said: “We feel confident that SA will be removed from the greylist by the next review date, in 2025, given the fixes we are implementing.” 

mkentanel@businesslive.co.za