“GREYLISTING”: SOUTH AFRICA’S PROGRESS PLAN AGAINST ITS ACTION PLAN

The FATF published the latest update on South Africa on 23 February 2024, following the conclusion of the February 2024 FATF Plenary meetings. South Africa’s progress update is listed on the progress for “Jurisdictions under Increased Monitoring – 23 February 2024” (FATF Update on greylisted countries February 2024).

When the FATF greylisted South Africa at its February 2023 Plenary meetings, a jointly agreed Action Plan was adopted listing 22 action items linked to the strategic deficiencies identified in the Anti-Money Laundering and the Combating of the Financing of Terrorism (AML/CFT) regime. South Africa is required to address all 22 to exit the FATF grey list. The deadlines for addressing the action items fall between January 2024 to January 2025. Should South Africa be assessed to have largely addressed all 22 Action Items in February 2025, the FATF will schedule an onsite visit in April/May 2025, to confirm that assessment and make a recommendation to the June 2025 FATF plenary.

The February 2024 FATF Plenary adopted a report by the Joint Group, confirming that five of the 22 Action Items are now addressed or largely addressed. These relate to the legal provisions criminalizing terrorist financing and underpinning South Africa’s targeted financial sanction regimes related to terrorism financing and proliferation financing, increasing the use of financial intelligence from the Financial Intelligence Centre to support money laundering investigations, and increasing the resources of AML/CFT supervisors.

In this cycle of reporting, the FATF also considered that two further action items that were previously not addressed, have now been partly addressed, confirming that 14 of the 17 outstanding action items have now been partly addressed. Three action items still have not been addressed as yet. The deadline for South Africa to address (or at least largely address) 4 of the outstanding action items in the Action Plan, is May 2024. The FATF will consider South Africa’s progress on these action items at its Plenary meeting in June 2024. A further 8 action items are due in September 2024, and the final 5 items are due in January 2025.

National Treasury notes that whilst South Africa is on track to address all the outstanding action items, it remains a tough challenge to address all 17 of the remaining action items by February 2025. All relevant agencies and authorities will need to continue to demonstrate significant improvements, and also for such improvements are being sustained.

Progress in addressing technical compliance deficiencies (related to the 40 FATF recommendations)

The process in addressing effectiveness deficiencies is distinct from the process in addressing technical compliance deficiencies (related to the adequacy of the country’s AML/CFT laws and policy frameworks). As reported in a National Treasury media statement on 29 November 2023 (National Treasury Media Statement 29 November 2023) , the October 2023 FATF Plenary formally re-rated 18 of South Africa’s 20 deficiencies, based on the progress made by the South African authorities in the two-year period following the 2021 mutual evaluation.

Of these, 15 were upgraded to a point where they are no longer deficient, as 14 Recommendations are now fully or largely compliant, and one Recommendation was deemed to be inapplicable to South Africa. Following these re-ratings, South Africa is now deemed to be fully or largely compliant in 35 of the 40 FATF Recommendations, including in 5 of the 6 core FATF Recommendations. South Africa will apply for further re-ratings of technical compliance deficiencies, for the consideration of the October 2024 FATF Plenary.

ANNEXURE: SOUTH AFRICA’S ACTION PLAN