The impact of South Africa’s greylisting is being felt across the country’s domestic institutions. The country needs to improve many of its identified woes to avoid long-term negative effects on the economy.<\/p>\n\n\n\n
This was outlined by the Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, at a meeting of the SARB shareholders on 30 July, where he noted that the next review for the grey list is looming, coming in January 2025<\/strong>.<\/p>\n\n\n\n “Although we are working hard to exit the Financial Action Task Force (FATF) grey list, the effects of being greylisted are being felt as foreign counterparties apply greater scrutiny to our domestic institutions,” said Kganyago.<\/p>\n\n\n\n South Africa was placed on the FATF’s grey list in February 2023 for not fully complying with international standards around the prevention of money laundering, terrorist financing and proliferation financing.<\/p>\n\n\n\n \u201cFATF also criticised South Africa\u2019s failure to show serious commitment to prosecuting individuals linked to state capture,\u201d explained Peter Fabricius in an article<\/a> for the Institute of Security Studies (ISS).<\/p>\n\n\n\n When the FATF places a country on its grey list, it means that the country has committed to resolving the identified strategic deficiencies within agreed-upon timeframes and is subject to increased monitoring within reporting cycles.<\/p>\n\n\n\n “Being greylisted means South Africa is a less attractive investment destination,” which results in the country needing to give better returns and paying higher interest on foreign investment, economics Professor Jannie Rossouw from the Wits Business School told the SABC<\/a>.<\/p>\n\n\n\n FATF identified 22 action items that South Africa must address to improve its anti-money laundering and combating the financing of terrorism regime if it wants to get off the list.<\/p>\n\n\n\n At the FATF’s latest review in June 2024, it kept South Africa on the list as eight of the 22 items have been addressed or largely addressed, with 14 still in progress. <\/p>\n\n\n\n The FATF has 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 investigate and prosecute complex financial crimes.<\/p>\n\n\n\n In terms of the action plan, South Africa has two reporting cycles: September 2024 and January 2025.<\/p>\n\n\n\n Earlier this year, Kganyago said that he is confident that the country will be removed from international financial crime watchdog FATF\u2019s grey list next year by ticking off all the required items.<\/p>\n\n\n\n