Pullinger said that despite claims of neutrality, South Africa’s relationship with Russia is being seen as open support, and it’s starting to reverberate among the country’s trading partners.<\/p>\n
\u201cOur government\u2019s open support for Russia is increasingly being called out by our major trading partners,” he said.<\/p>\n
“This could have extremely negative consequences for the country, which benefits far more from trade with and investment from the USA, UK and Europe than from Russia.”<\/p>\n
![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/03\/Alan-Pullinger.png\")
FirstRand CEO Alan Pullinger<\/p><\/div>\n
For the banking sector in particular, Pullinger said that the sector – including the South African Reserve Bank – crucially relies on access to the US dollar, global clearing and settlement, which is a privilege and can be revoked at any time.<\/p>\n
“For all of these reasons, FirstRand does not share the government\u2019s enthusiasm for Russia,” he said.<\/p>\n
Pullinger said that compared to these risks, the FATF greylisting is less impactful.<\/p>\n
South Africa was officially added to the FATF’s watch list at the end of February for failing to have the necessary checks and balances in place to clamp down on money laundering and terrorism financing.<\/p>\n
The FATF flagged issues with South Africa’s dirty money laws as far back as 2019, and in 2021 gave the government until October 2022 to get its affairs in order. The government tried to fast-track a host of new laws and regulations to deal with the issues raised, but fell short at the deadline.<\/p>\n
Pullinger said the greylisting is “unfortunate”, but noted that it was not unexpected and should be manageable.<\/p>\n
The main headwinds for South Africa and the banking sector, in particular, are increased compliance and transaction costs, and perhaps lower capital flows to the country, he said.<\/p>\n
\u201cNational Treasury, the FSCA and SARB put in a concerted effort to avoid this outcome, but some of the necessary deliverables were not within their control. As a sector, we will continue to work hard in partnership with them to get off the grey list as soon as possible,” he said.<\/p>\n
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