South Africa is on track to exit the Financial Action Task Force’s (FATF) so-called grey list by October.
- South Africa is progressing towards exiting the FATF’s grey list by October.
- FATF assessors will visit South Africa to confirm the sustainability of implemented reforms.
- Grey listing affects the economy and international confidence, limiting investment and aid.
South Africa is on track to exit the Financial Action Task Force’s (FATF) so-called grey list by October, with a team of assessors set to visit the country this month.
The FATF has already concluded that South African authorities have fulfilled “all or almost all” of the required actions, according to FATF President Elisa de Anda Madrazo.
The upcoming visit will focus on confirming that reforms to combat money laundering and terrorist financing have not only been implemented, but are sustainable, Bloomberg reported.
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Economic toll
While being placed on the grey list does not trigger immediate penalties, it can seriously harm a country’s economy and reputation. It often undermines confidence in the financial sector and limits access to international aid and investment.
A 2021 report by the International Monetary Fund (IMF) found that grey listing can reduce capital inflows by as much as 7.6% of a country’s GDP.
Removal from the grey list would mark a huge milestone for Africa’s most industrialised economy, potentially restoring investor confidence and improving capital flows. South Africa was added to the list in February 2023 due to shortcomings in its financial oversight.
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“They will assess, report back to the plenary, and a decision will be made,” De Anda said. Speaking on the sidelines of the G20 finance ministers and central bank governors’ meeting in South Africa, she added: “What I can say is we do see political commitment from South Africa.”
De Anda, a former Mexican official, also met with South Africa’s central bank governor at the event, reaffirming the authorities’ commitment to addressing FATF concerns.
