FATF puts South Africa, Nigeria on 'grey list'

This was despite desperate attempts by South Africa to pass several relevant laws late last year, as well as a high-level delegation sent to the FATF recently to make representations.

Global anti-money laundering watchdog FATF on Friday added South Africa and Nigeria to its "grey list" of countries for failing to combat money laundering and terrorism financing, in a set back to Africa’s two largest economies.

The decision of the Paris-based Financial Action Task Force (FATF) indicates to global banks, financial institutions and investors that these countries are not fully compliant with anti-money laundering and terrorist financing standards.

This was despite desperate attempts by South Africa to pass several relevant laws late last year, as well as a high-level delegation sent to the FATF recently to make representations.

The FATF conceded that there had been significant progress by South Africa on many of the recommendations previously made to the country, but that more needed to be done in terms of increasing investigations and prosecutions related to cases of money laundering, as well as the seizure of assets which were the proceeds of criminal activities.

“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the ‘grey list’, FATF said in a statement issued after its meeting in Paris.

The FATF identifies additional jurisdictions, on an on-going basis, that have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing, the statement said.

“In February 2023, South Africa made a high-level political commitment to work with the FATF and to strengthen the effectiveness of its anti-money laundering (AML) and combating financing of terrorist activities (CFT) regime.