South Africa has reported progress in amending the Financial Action Task Force’s (FATF) concerns and exiting the global Anti-Money Laundering (AML) grey list.
In an announcement, the FATF has upgraded the country’s progress in the following:
- Recommendation 2 (National cooperation and coordination) is re-rated from partially compliant to largely compliant.
- Recommendation 6 (Targeted financial sanctions related to terrorism and terrorist financing) is re-rated from partially compliant to largely compliant
- Recommendation 15 ( New technologies) is re-rated from partially compliant to largely compliant
The FATF will now evaluate any further progress and South Africa will next report back on remaining deficiencies in its fifth round of mutual evaluation.
There is hope that South Africa will fully make it off of the greylist by June of next year, though many experts believe South Africa may not be removed from the grey list until 2026. However, this doesn’t understate the significant development the country has made over recent years.
When the Mutual Evaluation Report (MER) was released in 2021, the country did not comply with half of FATF’s 40 recommendations. Currently, South Africa is compliant with five recommendations and largely compliant with 32, as well as two recommendations rated partially compliant.
Despite featuring on the AML grey list, the country has seen investments made by payments firms this year. Last month, Mastercard revealed that South Africa will be the first market worldwide to launch immediate Mastercard card payments.
Nevertheless, achieving removal from the grey list could enhance confidence in the nation’s financial ecosystem, a critical factor for attracting investment across sectors, including finance and regulated gaming.
Another country currently on the grey list, but hoping to secure its exit is the Philippines. Late last month, the Asian country made a decisive move toward strengthening its financial reputation by fulfilling the 18-point action plan outlined by the FATF.
Lucas Bersamin, Executive Secretary of the Philippines AML Council, said: “This milestone is a testament to the hard work and coordination across government agencies. It reflects our strong commitment to meeting the FATF’s stringent standards and ensuring the long-term protection of our financial system. We are confident that this progress will be affirmed during the on-site visit.
“We must continue our efforts to ensure that our reforms are implemented and sustained. Building a resilient AML/CTF regime is critical for safeguarding our financial system and our economy from illicit activities.”
