South Africa is moving closer to being removed from the Financial Action Task Force’s (FATF) grey list, with a team of assessors scheduled to visit the country this month.
The country could exit the list as early as October, marking a major step forward in its efforts to strengthen financial oversight and restore investor confidence.
FATF President Elisa de Anda Madrazo said South African authorities have met “all or almost all” of the required steps laid out by the international watchdog.
The visit will now focus on verifying that the reforms aimed at curbing money laundering and terrorist financing have not only been implemented but are sustainable, according to a report by Bloomberg.
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Although being placed on the grey list does not carry automatic penalties, it can damage a country’s reputation, shake confidence in its financial systems, and make it harder to attract foreign investment or secure international funding.
A 2021 report from the International Monetary Fund (IMF) revealed that grey listing can reduce capital inflows by up to 7.6% of a nation’s GDP.
South Africa was added to the grey list in February 2023 due to weaknesses in its financial oversight systems.
Since then, the government has introduced various reforms to address the FATF’s concerns.
If the upcoming assessment confirms the effectiveness and long-term viability of these measures, South Africa could be formally removed from the list at the next FATF plenary meeting.
“They will assess, report back to the plenary, and a decision will be made,” De Anda said.
Speaking on the sidelines of the G20 finance ministers and central bank governors’ meeting in South Africa, she added: “What I can say is we do see political commitment from South Africa.”
De Anda, a former Mexican official, also met with the South African Reserve Bank governor during the event to reaffirm the country’s dedication to meeting FATF standards.
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