By Lehlohonolo Lehana.
South Africa has been greylisted by global anti-money laundering watchdog the Financial Action Task Force (FATF).
The Paris-based anti-money laundering watchdog added South Africa to its list of countries that will be monitored to ensure the implementation of anti-money laundering and terrorism-funding regulations.
The greylisted countries include Nigeria, Turkey, Yemen, Cambodia, South Sudan, Mali, Morocco, Myanmar, Panama, and the Philippines.
The global watchdog published an updated list on Friday.
The South African Reserve Bank (SARS) says it acknowledges the decision of the Financial Action Task Force (FATF).
“The SARB has a zero-tolerance approach when addressing the abuse of the financial system by money launderers or terrorist financiers. The SARB reaffirms its strong commitment to disrupt money laundering, the financing of terrorism and proliferation through the enhancement of its supervisory activities.”
“Going forward, SARB will further strengthen supervision and enhance the dissuasiveness and proportionality of administrative sanctions issued,” the Reserve Bank stated.
SARB further stated that it reaffirms its strong commitment to disrupt money laundering, the financing of terrorism and proliferation through the enhancement of its supervisory activities.
Momentum Investments economist Sanisha Packirisamy says that when the global FATF places a jurisdiction under increased monitoring (ie the greylist), it means that the country is actively working with the FATF to address apparent strategic deficiencies in its regimes designed to tackle financial crimes.
“In our view, much of the responsibility for the weakening of South Africa’s (SA) criminal justice system lies with the previous administration’s subversion of democracy. During this period, the capacity of SA’s tax authority, intelligence agencies and crime-fighting and law enforcement bodies were incapacitated.
SA was given until November 2022 to prove it is remedying the country’s structural deficiencies when it comes to anti-money laundering and countering the financing of terrorism,” she said.
“We believe this yellow card warning should serve as a wake-up call for SA policymakers, regulators and law enforcement agencies to convince the country’s international counterparts it is worth their effort to maintain relationships in the interim as SA continues to build a more robust legal and compliance framework to remain competitive on the global stage,” Packirisamy further said
The Financial Sector Conduct Authority (FSCA), on Friday, said, “The FATF recognised the significant progress made by South Africa to remedy shortcomings in the country’s efforts to combat financial crime since the publication of its Mutual Evaluation Report (MER) in October 2021. However, both the FATF and South Africa acknowledge that further improvements are still required in some areas.”
The FSCA further stated that it appreciated the consultative process adopted by the FATF and respected the decision that has been taken.
“Since the Mutual Evaluation, the FSCA has worked closely with other key stakeholders, including the South African Reserve Bank (SARB), Financial Intelligence Centre (FIC) and the National Treasury, to strengthen its oversight of anti-money laundering (AML) and counter-terrorism financing (CFT) risks in the financial sector. These coordinated and substantial efforts, led by the National Treasury, have resulted in many of the key deficiencies relating to the supervision and prevention of AML/CFT risks in the financial sector being addressed in a relatively short period of time,” the FSCA said in a statement.