Telling empowering stories, South Africans want to hear

Friday, 28 June 2024 15:58

South Africa making progress but stays on grey list as Monaco and Venezuela added.

By Lehlohonolo Lehana.

The Financial Action Task Force (FATF) has commended South Africa for its high-level political commitment to work on anti-money laundering and counter-financing of terrorism (AML/CFT).

South Africa was classed as a jurisdiction 'subject to increased monitoring' – the so-called 'grey list' – in February 2023, when government made a high-level political commitment to work with the FATF and the Eastern & Southern Africa Anti-Money Laundering Group (ESAAMLG) to strengthen the effectiveness of its anti-money laundering and combating the financing of terrorism (AML/CFT) regime.

The FATF said that South Africa should continue to work on implementing several action plans to address some of its remaining strategic deficiencies.

South Africa's Action Plan listed 22 items linked to the strategic deficiencies that it is required to address before exiting the FATF grey list. The deadlines for addressing the action items fall between January 2024 to January 2025.

Should South Africa be assessed to have largely addressed all 22 Action Items in February 2025, the FATF will schedule an onsite visit in April or May 2025, to confirm that assessment and make a recommendation to the June 2025 FATF plenary.

In March, South Africa's Reserve Bank (SARB) governor, Lesetja Kganyago, said he is confident the country will be withdrawn from international financial crime watchdog FATF's "grey list" next year.

"We feel confident that South Africa will be removed from the grey list by the next review date, in 2025, given the fixes we are implementing, "said Kganyago.

"(The grey list) has been a costly episode for us," said Kganyago.

The FATF published the latest update on South Africa at the end if its plenary meeting in Singapore.

Venezuela and Monaco have been added to a global watchdog's "grey list" for not making enough progress to stem illicit financial flows.

The Financial Action Task Force put the two countries on its list after a discussion and vote during the group's plenary.

For Monaco, which has faced its own series of crises, the FATF list inclusion comes at a critical moment as well.

The tiny principality on the French Riviera is awaiting a report from the Group of States Against Corruption, or Greco, which is examining the government's ability to stamp out bribery. After multiple political scandals in the past half decade, Prince Albert II, the ruler, cut ties with several of his closest aides last year and is now locked in a public spat with one of them.

The watchdog also said Monaco should boost resources allocated to prosecuting money laundering, and ensure "effective, dissuasive and proportionate" sanctions.

Monaco's government said in a statement that it's determined to implement the FATF's recommendations and looking to address the issues within 18 months.

In a separate move, the FATF removed Turkey and Jamaica from its gray list, citing "significant progress" by both countries to improve their regimes for anti-money laundering and countering terrorist financing.

A 2021 IMF study found that a grey listing had "a large, significant negative effect" on a country’s capital inflows, meaning Friday's move could drive a further move into Turkish assets.