Sameer Kumandan | Managing Director | SearchWorks | mail me |
After demonstrating significant progress in strengthening the effectiveness of its anti-money-laundering (AML) and counter-financing of terrorism (CFT) measures, South Africa was recently removed from the Financial Action Task Force’s (FATF) grey list.
The FATF recognised South Africa’s work to strengthen financial crime prevention back in June. That recognition set the stage for the country’s eventual exit from the grey list.
The task force confirmed that South Africa had completed most of the 22 action items listed in its plan. This achievement paved the way for removal. Grey list removal is a milestone that means South Africa is no longer subject to increased monitoring by the FATF. It reassures investors, financial institutions and trading partners that the financial system is now safer and more compliant.
Why was South Africa grey-listed?
The FATF first grey-listed South Africa in early 2023 because the country failed to coordinate and collect intelligence on financial crimes. It also failed to investigate and prosecute key cases.
While the decision to delist the country has been widely welcomed, it is not the finish line. Grey list removal is a milestone, but government, regulators and accountable institutions must now work harder to maintain this progress.
After exiting the grey list, countries must continue showing measurable progress. This includes successful investigations, prosecutions and sanctions that address AML and CFT shortcomings. For South Africa, the FATF will review progress during its next Mutual Evaluation. This process begins in early 2026 and concludes in October 2027.
Milestone achieved, but the work must continue
Celebrating this achievement is important, but the real challenge lies in making improvements a permanent part of the system. Grey list removal is a milestone that should motivate continued reforms. To sustain momentum, South Africa must focus on four key areas.
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Maintain and deepen the implementation of AML/CFT frameworks
The country must ensure that all updated laws are effectively enforced across every sector. This involves strengthening institutional capacity in enforcement, regulation and cross-border cooperation. South Africa must also increase investigations, prosecutions and convictions for money-laundering and terrorist-financing cases.
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Ensure governance and accountability improvements continue
Removal from the grey list improves South Africa’s reputation. However, governance weaknesses still exist and need to be addressed. The country must take transparent and timely action on high-profile corruption cases. It must also embed a culture of compliance and oversight across both public and private institutions.
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Leverage delisting as a platform for broader economic reform
South Africa’s improved status creates opportunities for economic growth. It can attract foreign direct investment, lower the cost of capital and expand cross-border trade and finance flows. Grey list removal is a milestone that should signal stability to global markets and institutions. It shows that the country is strengthening its regulatory and financial integrity frameworks.
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Avoid complacency
The exit is only the beginning. Sustained improvement must remain a top priority. South Africa could easily be relisted if it fails to maintain continuous monitoring, auditing, evaluation and reporting. Government and other accountable institutions must ensure these mechanisms stay strong and consistent.
Managing risk efficiently and effectively
Delisting should never be seen as the finish line. The fight against financial crime must continue. VOCA, from SW360, is an automated compliance platform that helps businesses meet Financial Intelligence Centre Act (FICA) and AML/CFT requirements. It also assists organisations in managing risk efficiently and effectively.
Automated compliance tools like VOCA are not replacements for strong institutions and enforcement. However, they make compliance more reliable, scalable and measurable. By embedding such technologies across the financial sector, South Africa can maintain progress and credibility in global markets. Grey list removal is a milestone, but continued diligence will determine whether the country stays on the right path.
