<\/p>\n
Another bit of good news for SA this week was its removal from the European Union\u2019s list of High-Risk Third Country Jurisdictions.<\/p>\n
This is a consequence of being removed from the Financial Action Task Force (FATF) grey list in 2025, which rewarded the country for its much-improved efforts to combat money laundering and terrorism financing.<\/p>\n
Read:
Best starting point for SA in years \u2013 Mavuso
Grey list exit: SA can\u2019t rest on its laurels
South Africa is off the dirty-money grey list<\/p>\n
National Treasury welcomed the removal from the EU list, as well as the delisting of five other African countries: Burkina Faso, Mali, Mozambique, Nigeria and Tanzania.<\/p>\n
\nSouth Africa was added to the EU List in August 2023 as an automatic consequence of its grey listing by the FATF in the same month.<\/p>\n<\/blockquote>\n
This required EU financial institutions to conduct enhanced due diligence on SA-related transactions.<\/p>\n
The removal from the EU list does not necessarily mean that SA transactions will be subject to less scrutiny, but it does allow EU institutions to adjust their risk assessment policies as they see fit.<\/p>\n
EU law increases scrutiny<\/strong><\/p>\n
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National Treasury has explained that EU law \u201crequires that financial institutions in the EU must apply a higher level of scrutiny to transactions involving parties in countries deemed to be high-risk, resulting in more rigorous and intrusive checks, increased documentation requirements, continuous monitoring and senior management approval for transactions.<\/p>\n
These requirements add friction to financial transactions and flows, affecting trade, payments and investment\u201d.<\/p>\n
Read:
IMF impressed with SA inflation target and removal from grey list, but \u2026
South Africa\u2019s ratings upgraded by S&P Global<\/p>\nThe EU issued a statement acknowledging the efforts of SA and five other African countries to strengthen their anti-money laundering and counter-terrorism financing (AML\/CFT) regimes.<\/p>\n
\u201cBurkina Faso, Mali, Mozambique, Nigeria, South Africa and Tanzania have strengthened the effectiveness of their AML\/CFT regimes and addressed technical deficiencies to meet the commitments in their action plans on the strategic deficiencies identified by the FATF.<\/p>\n
\u201cThe Commission therefore considers that Burkina Faso, Mali, Mozambique, Nigeria, South Africa and Tanzania no longer have strategic deficiencies in their AML\/CFT regimes \u2026\u201d<\/p>\n
SA\u2019s FATF grey listing<\/strong><\/p>\n
SA was placed on the FATF grey list in 2023, primarily for weak investigation and prosecution of serious money-laundering activities, as well as inadequate supervision of non-financial business and professions such as lawyers, accountants and estate agents.<\/p>\n
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FIC takes a bigger stick to lawyers and estate agents over grey list
More action needed from lawyers and estate agents to exit grey list \u2013 FIC<\/p>\nThe FATF also raised concerns about SA\u2019s ability to identify beneficial ownership in corporate structures, and weak international cooperation in facilitating money-laundering and terrorism-financing investigations.<\/p>\n
These lapses have been considerably tightened since 2023.<\/p>\n
However, National Treasury notes that SA\u2019s removal from the FATF and EU lists \u201cdoes not mean that all South Africa\u2019s challenges in implementing its AML\/CFT system have been resolved, and recognises that much work still needs to be done to strengthen deficiencies in the prevention, identification, investigation and prosecution of money laundering and terrorism financing\u201d.<\/p>\n
\nSouth Africa will be entering a new round of evaluation by FATF in the coming months, with a final report due for presentation in October 2027.<\/p>\n<\/blockquote>\n
Preparation has begun in earnest, incorporating the lessons learnt and experience gained during the process to exit FATF grey listing, says National Treasury.<\/p>\n
Listen\/read:\u00a0Are the FIC\u2019s teeth sharp enough to combat corruption?<\/p>\n
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