National Treasury Acting head of department, Ismail Momoniat, says he is optimistic that South Africa can avoid greylisting by the international Financial Action Task Force (FATF).<\/p>\n
Momoniat was speaking during a Daily Maverick webinar on the potential greylisting on Wednesday afternoon.<\/p>\n
The FATF works to combat money laundering, and greylisting would not only impede the country\u2019s ability to attract foreign investment but would also knock investor confidence in South Africa.<\/p>\n
An evaluation report released by the organisation in October last year gave South Africa an adverse rating and laid out 40 recommendations and other measures which would allow the country to avoid greylisting.<\/p>\n
\u201cI am still optimistic that there is a path for us to prevent greylisting. It may not be likely, but I think there certainly is a path<\/strong>. There\u2019s legislation before Parliament, and they are both at an advanced stage in the National Assembly.<\/p>\n \u201cBy February, we would have been able to show that [we are complying] largely with\u202620 of the 40 recommendations. The laws themselves deal with about 16 of the 20, and then they require some regulations and other measures, but we\u2019d get there on technical compliance,\u201d he said.<\/p>\n The Treasury head warned, however, that although South Africa might reach the technical compliance threshold, \u201cit is in effectiveness that we are lacking\u201d.<\/p>\n \u201cThat is a general South African problem\u2026it\u2019s all about implementation, and that\u2019s where we lack. But even there, I am quite optimistic. There\u2019s three or four of the immediate outcome measures that related to prosecutions, investigations [and] forfeitures.<\/p>\n \u201cCompared to 2019, I would argue that our entities were at their weakest. They were coming out of State Capture, they just had a new head appointed [and] they hardly had any cases to show. Whereas now, I think \u2013 slow as it has been \u2013 there has been consistency, and we are seeing the cases tally up.<\/p>\n \u201cSo we would be able to show that we\u2019ve made fairly significant progress. Sure, we still need to make much, much more progress, but if we can demonstrate that for each of the measures, there\u2019s commitment, and we\u2019ve made progress,\u201d he said.<\/p>\n Missing the threshold<\/strong><\/p>\n Momoniat said that in the event of greylisting, the government\u2019s work towards meeting the FATF\u2019s recommendations and measures will soften the blow.<\/p>\n \u201cTo the extent that we get greylisted, but we\u2019ve demonstrated that we\u2019ve changed the laws, we\u2019ve demonstrated that we\u2019ve made progress on five or six of the measures, it\u2019s a very different message that will come through that South Africa has made progress, it just needs a bit more time, and the impact will be less.<\/p>\n \u201cCertainly, I\u2019m hoping on the financial sector side, correspondent banks and so on, we\u2019ll have passed the test,\u201d he said.<\/p>\n The treasury head expressed that the effect of the FATF\u2019s evaluation has sharpened focus at all levels to ensure that South Africa avoids greylisting.<\/p>\n \u201cIn a sense, the effect of [potential] greylisting has concentrated minds and got to make sure that our criminal justice system actually begins to work better when you deal with financial crimes.<\/p>\n \u201cWe\u2019ve made them aware of the economic consequences of them acting too slowly. They\u2019ve realised that their own performance is in a sense, under observation and have certainly begun to get their house in order. Certainly, that awareness has got through to them.<\/p>\n \u201cEven with the other authorities that we deal with on terror financing\u2026they\u2019re beginning to do things now that they weren\u2019t doing before and that there\u2019s a great focus on this. There are going to be tough challenges all the time but I think we can show that we\u2019ve made significant progress,\u201d he said.<\/p>\n
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