Key highlights from National Treasury's statement
- Major Progress Achieved: South Africa has addressed or largely addressed 20 of the 22 action items in its FATF Action Plan.
- Outstanding Items: Two key areas remain unresolved:
- Sustained investigations and prosecutions of serious and complex money laundering cases.
- Sustained investigations and prosecutions of terrorist financing activities aligned with South Africa's risk profile.
- Next Steps: South Africa will report on these outstanding items between March and June 2025, with the FATF set to assess progress at its October 2025 plenary meeting.
Treasury's response to FATF upgrades
The National Treasury welcomed the FATF's recognition of South Africa's efforts, emphasizing that this progress reflects the country's commitment to strengthening its anti-money laundering and counter-terrorism financing (AML/CFT) framework. Key achievements highlighted include:
- Enhanced enforcement of beneficial ownership obligations by companies and trusts.
- Improved access to accurate and up-to-date beneficial ownership information by authorities.
- Effective sanctions applied by regulators for breaches of AML/CFT obligations.
Treasury acknowledged that addressing the final two action items will require demonstrating sustained improvements over successive reporting periods, which will be critical for delisting from the greylist.
Implications for businesses and financial institutions
Exiting the FATF greylist would bring significant benefits, including reduced transactional costs, improved investor confidence and enhanced international financial relationships. However, businesses operating in South Africa, particularly those in the financial sector, must continue to prioritize compliance with AML/CFT regulations. Proactive measures to strengthen internal controls and mitigate risks associated with financial crimes remain essential during this transitional period.
Looking ahead
South Africa is on track for potential delisting from the FATF greylist by October 2025 if it demonstrates sustained progress on the remaining two action items. The government remains committed to implementing a prosecution-guided investigation strategy to address these deficiencies effectively.
For full details, you can access the National Treasury media statement here.
If you have any questions about how this development may impact your business or require assistance with compliance strategies, please contact our team at Baker McKenzie in Johannesburg.
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Azhar Aziz-Ismail, Knowledge Manager, contributed to this legal update.
