South Africa’s Reserve Bank (SARB) governor, Lesetja Kganyago, says he is confident the country will be removed from international financial crime watchdog FATF’s “grey list” next year.<\/p>\n\n\n\n
The governor said that work is underway to fix the numerous issues that were identified by the Financial Action Task Force (FATF) – which is expected to be completed by the watchdog’s next review.<\/p>\n\n\n\n
“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 in an address to the Financial Sector Conduct Authority industry conference on Wednesday (13 March).<\/p>\n\n\n\n
South Africa’s placement on the grey list “has been a costly episode for us,” said Kganyago. <\/p>\n\n\n\n
“The lesson is that joint efforts are required to look after the integrity of South Africa\u2019s financial system – we all suffer when this is compromised,” he added.<\/p>\n\n\n\n
South Africa was put on the FATF grey list on 24 February 2023 for\u00a0not fully complying with international standards around the prevention of money laundering, terrorist financing and proliferation financing.<\/p>\n\n\n\n
“FATF also criticised South Africa\u2019s failure to show serious commitment to prosecuting individuals linked to state capture,” explained Peter Fabricius in an article<\/a> for the Institute of Security Studies (ISS).<\/p>\n\n\n\n \u201cWe got this \u2018high risk\u2019 designation partly because of poor conduct by institutions and because of the exploitation of vulnerabilities in the existing financial frameworks relating to anti-money-laundering regulations,\u201d explained the Reserve Bank governor. <\/p>\n\n\n\n The “listing was a reputational blow and economic setback that could deter foreign investment and increase business costs,” he added.<\/p>\n\n\n\n To get off the grey list, South Africa has identified 22 action items that need to be met by set deadlines.<\/p>\n\n\n\n Recent reporting has shown that the country has only thus far ticked off five. <\/p>\n\n\n\n The FATF have said that South Africa, among other requirements, must still show that it can implement a modern and comprehensive strategy to counter the financing of terrorism, do more to curb money laundering and show it can investigate and prosecute complex financial crimes.<\/p>\n\n\n\n Experts have notes that South Africa\u2019s progress in getting off the grey list has been hindered by two groups \u2013 legal practitioners and estate agents.<\/p>\n\n\n\n