Though it would be tough, SA should get off the Financial Action Task Force (FATF) greylist by the scheduled date of June 2025, Treasury deputy director-general Ismail Momoniat said on Sunday.
Momoniat, who is technical adviser and head of the SA FATF delegation, attended the task force’s plenary meeting in Paris last week. He said it was a “good meeting” even though the FATF had identified several aspects of SA’s regime for combating money-laundering and terrorist financing that remained deficient.
The FATF is a Paris-based organisation that sets global standards for regimes to combat money-laundering and terrorist financing. At last week’s meeting, an assessment was made of the progress by SA and other countries on the greylist with meeting requirements.
SA was placed on the greylist in 2023, which affected its international reputation and resulted in heightened due diligence, especially in the financial sector.
SA has taken several steps, including tightening up the law on the identification and tracking of the beneficial ownership of companies and trusts, and is in the process of establishing the Investigating Directorate of the National Prosecuting Authority as an independent entity.
But while it has made progress on the legislative front, it has failed to demonstrate successful prosecutions of those involved in money-laundering and terrorist financing.
Momoniat said SA had now completed five of the 22 actions required by the FATF and had made good progress on 15 of the remaining 17.
“While it is going to be tough, we should be able to make good progress this year to get out of greylisting by June 2025, which is the scheduled date,” Momoniat said. “Bear in mind we had a lot to cover as our key law enforcement institutions were crippled due to state capture.”
While the FATF recognised in a statement after its plenary meeting that SA had taken steps towards improving its regime, it said it still had some way to go.
Steps taken included addressing technical deficiencies in its targeted financial sanction regime related to terrorist financing, increasing the use of financial intelligence from the Financial Intelligence Centre (FIC) to support investigations, and increasing the resources of supervisors.
But SA had to demonstrate a sustained increase in the number of its requests for mutual legal assistance from other jurisdictions to help it with its investigations and confiscations of different types of assets in line with its risk profile.
It also had to improve its supervision of designated nonfinancial businesses and professions, such as estate agents and lawyers.
Recently, the FIC complained that many estate agents and law firms had failed to comply with its requests for the information that the FATF required for effective supervision.
The FATF said SA had to demonstrate that supervisors applied effective sanctions for noncompliance, had to ensure that its authorities had timely access to accurate and up-to-date beneficial ownership information and had to apply sanctions for breaches of the law.
Another requirement, the FATF said in a statement, was that SA had to demonstrate “a sustained increase in investigations and prosecutions of serious and complex money-laundering and the full range of terrorism financing activities in line with its risk profile”.
SA needed to identify, seize and confiscate the proceeds of crime and update its terror financing risk assessment for the implementation of a comprehensive national strategy to counter the financing of terrorism.
Finally, the FATF said SA had to ensure that it effectively implemented targeted financial sanctions and demonstrate that it had an effective mechanism to identify individuals and entities that meet the criteria for domestic designation.
Kenya and Namibia were added to the countries under increased FATF monitoring, while Barbados, Uganda, Gibraltar and the United Arab Emirates were removed because of the progress they had made.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.