South Africa needs a "miracle" to avoid being placed on the grey list

Unless South Africa can pull off a "few miracles," the country will be placed on the Financial Action Task Force's grey list, according to the Director General of the National Treasury.

"Unless we can perform some miracles," Ismail Monomiat warned, South Africa is "almost certainly headed to be grey listed" by FATF in February 2023.


"Given the grey listing we face, the sooner we do things, the better for us," said Mr. Monomiat last month at the joint meeting of the standing and select committees on finance of the Parliament.


He continued by stating that South Africa was "well behind" the most recent global AML and CFT standards.


According to The Daily Maverick, South Africa's adherence to FATF standards is in "dire need of a facelift," and Treasury officials have urged the nation's two finance committees to swiftly adopt significant amendments to the Financial Intelligence Center Act of 2001 (FICA).

FATF found South Africa to have "significant shortcomings" despite having "a  solid legal framework to fight money laundering and terrorist financing."


South Africa received the lowest possible rating ('critically weak') out of 11 for the effectiveness of the legislation's implementation.


The FATF Mutual Evaluation Report's main conclusions include the fact that authorities' knowledge of the risks associated with terrorist financing is "underdeveloped and uneven."


The ability and resources of law enforcement to actively investigate money laundering and terrorist financing are also lacking.


According to the FATF, South African authorities "have identified limited activities of the Islamic State involving South African citizens and acknowledge potential sources of [terrorist financing] risks stemming from the country being used by terrorist groups."


Law enforcement is unable to look into and prosecute sophisticated and international money laundering schemes, according to the FATF peer review.


According to Mr. Monomiat, the decision to amend Schedules 1, 2, and 3 of the FIC Act, made by the National Treasury and the Financial Intelligence Centre in June, would "go a long way towards aligning South Africa with the FATF's standards."

By fLEXI tEAM