Work continues to make SA FATF compliant

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South Africa, by way of the Finance Ministry’s National Treasury (NT), is progressing and has addressed five of 22 Financial Action Task Force (FATF) action items identified as deficiencies as regards anti-money laundering and combatting terrorism financing (AML/CTF).

An FATF update published late in February lists South Africa’s progress in “Jurisdictions under increased monitoring”.

South Africa, an NT statement has it, is required to address all 22 action items to exit the FATF grey list. The deadlines for addressing action items fall between January 2024 and 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”.

February’s FATF Plenary adopted a report confirming five of 22 action items are “addressed or largely addressed”. They relate to legal provisions criminalising terrorist financing underpinning South Africa’s targeted financial sanction regimes related to terrorism financing and proliferation financing, increasing use of financial intelligence from the Financial Intelligence Centre (FIC) to support money laundering investigations and increasing the resources of AML/CFT supervisors.

In the latest reporting cycle, the FATF considered two further action items not previously addressed, are now partly addressed, confirming 14 of 17 outstanding action items partly addressed. Three action items have not yet been addressed.

“The deadline for South Africa to address, or at least largely address, four 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. A further eight action items are due in September 2024 and the final five are due in January 2025.”

National Treasury notes while South Africa is on track to address all outstanding action items, it remains a tough challenge to address all 17 the remaining action items by February 2025. “All relevant agencies and authorities will need to continue to demonstrate significant improvements” and ensure they are sustained.

The FATF grey listed South Africa in February 2023.