This blog was co-authored by Michael McCarthy, Candidate Attorney.

In November 2023 the Financial Action Task Force issued a Follow-up Report and Technical Compliance Re-Rating outlining the progress South Africa has made to address identified anti-money laundering and counter-terrorist financing deficiencies. The report highlights that while progress has been made to address most technical compliance deficiencies, five FATF recommendations remain rated as partially compliant. As a result, South Africa will remain in enhanced follow up and is to report back to the FATF in October 2024.

Individual country responses to South Africa being placed on the FATF’s list of “Jurisdictions under Increased Monitoring” in February 2023 may have eased the initial impact of the greylisting. On 4 December 2023 HM Treasury, as the United Kingdom’s economic and finance ministry, issued an advisory notice that South Africa has been added to the schedule of “High-risk Third Countries” under the UK Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017.

Designated regulated businesses in the UK, such as credit institutions and financial institutions, will now apply enhanced customer due diligence measures and enhanced ongoing monitoring to any business relationship with a South African person or entity, and to any transaction ordinarily requiring customer due diligence measures involving a South African person or entity. How long South Africa will remain on the greylist and the impact and cost of the heightened foreign regulatory scrutiny remains to be seen.

South Africa’s :2nd Enhanced Follow-up Report