Financial Crime watchdog (FATF) adds South Africa to its grey list for money laundering

By: Chime Amara

In a move that has sent shockwaves through the financial industry, the has added South Africa to its grey list for money laundering, alongside Nigeria. The decision was made during a plenary session held by the international watchdog in Paris on February 24, 2023.

The grey list is a warning to countries that their financial systems are not up to scratch when it comes to combating money laundering and terrorist financing. Being on the grey list means that financial institutions operating in South Africa will face increased scrutiny, making it more difficult for them to do business internationally.

This is a blow to South Africa, which has been trying to improve its reputation as a financial hub and attract investment to its struggling economy. It is also a setback for the country's efforts to combat corruption and financial crime.

The FATF stated that South Africa has made progress in implementing its action plan to address the deficiencies in its anti-money laundering and counter-terrorist financing regime. However, the watchdog also noted that more needs to be done to fully address the identified weaknesses.

The South African government has responded to the news by saying that it is committed to working with the FATF to address the issues and to fully implement the necessary measures. The government has also emphasized that it takes the fight against financial crime and corruption very seriously.

The decision by the FATF to put South Africa on its grey list comes at a time when there is increasing global concern about the links between financial crime and terrorism. The international community is increasingly focused on preventing money laundering and terrorist financing, and countries that are seen as not doing enough to combat these threats risk being ostracized by the international financial community.

It remains to be seen what impact this decision will have on South Africa's economy and reputation as a financial center. However, the government will need to take swift action to address the issues identified by the FATF if it is to avoid further damage to its reputation and the wider economy.