President Cyril Ramaphosa says South Africa’s exit from the Financial Action Task Force’s (FATF) grey list bodes well for the integrity and reputation of our financial system, the country’s status as an investment destination and the economy as a whole, Cape {town} Etc reports.
This comes just over two years after South Africa was flagged for failing to meet crucial international standards aimed at combating money laundering and the financing of terrorism.
During a recent address, Ramaphosa expressed optimism about the implications of this exit, stating, ‘This milestone is a boost for South Africa’s international reputation and global standing.’
He emphasised that being on the grey list signals to potential investors that a country is risky, impeding access to credit, reducing foreign direct investment and complicating international financial transactions.
The FATF highlighted the ‘significant progress’ made by South Africa in enhancing its anti-money laundering and counter-terrorism financing regime.
Ramaphosa explained that the grey listing adversely affected citizens and businesses, leading to increased costs of living and conducting business.
The weakened currency, coupled with international borrowing complexities, constrained fiscal space for social spending, exacerbating the financial burden on the populace.
‘Exiting the grey list will reduce pressure on citizens, businesses, and the government.’
‘The return of international financial confidence will attract more foreign direct investment, and as our currency strengthens, the costs for citizens will improve,’ Ramaphosa said.
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Ramaphosa lauded the efforts of a multidisciplinary team led by the National Treasury, crediting their commitment as essential to achieving this pivotal change. ‘The far-reaching regulatory and institutional reforms we have instituted as part of the FATF process are a clear demonstration of our commitment to improving the business and investor climate,’ he added.
Significantly, amendments were made to expand the mandate of the Financial Intelligence Centre, enhancing its ability to monitor and detect complex financial crimes.
Legislative changes have established stricter reporting regulations to ensure transparency regarding company ownership, making it tougher for individuals to obscure financial wrongdoing through shell companies and trust networks.
In addressing potential terrorism financing loopholes, regulatory amendments have been implemented to facilitate the investigation and prosecution of such cases, increasing government commitment to countering money laundering and terrorism financing.
The shadow of the state capture era looms large, having almost depleted state capacity and weakened institutions integral to safeguarding financial integrity.
However, Ramaphosa is focused on rebuilding, asserting that South Africa’s move off the grey list serves as a testament to the country’s progression in combating corruption and enhancing financial resilience.
Robin Kieswetter, the Commissioner of the South African Revenue Service (SARS), reiterated the significance of this delisting. ‘It is a vote of confidence in South Africa’s progress, but it is not an end to our vigilance. The fight against financial crime and corruption is continuous,’ he stated, confirming SARS’s commitment to maintaining the highest standards of financial integrity as they prepare for the next FATF review in 2026.
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Picture: Gallo Images / Frennie Shivambu
