SOUTH Africa has been placed on Financial Action Task Force (FATF)'s grey list after failing certain international standards for fighting money laundering and other serious financial crimes.
The FATF is a global body that aims to tackle global money laundering and terrorist financing. The decision to place Mzansi on the grey list was announced on Friday, 24 February.
“The grey listing is an opportunity for us to tighten our controls and improve our response to organised crime,” said President Cyril Ramaphosa.
The president said the listing of South Africa, as a jurisdiction under increased monitoring commonly known as grey listing, has caused much concern about the state of the country’s financial institutions, law enforcement agencies and investment environment.
He said the situation is concerning but less dire than some people suggest.
“We have gone through a rigorous process of addressing the issues that FATF has raised with us. The fundamentals are in place, and we know what we need to do to get off the grey list.
“We are determined to do this as quickly as possible. This is important not only for our international standing, but also for our own ability to fight these crimes in our country,” said Ramaphosa.
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According to Ramaphosa during South Africa’s last regular mutual evaluation of its measures to combat money laundering and the financing of terrorism, several deficiencies were identified.
He said the mutual evaluation was conducted in 2019, when the country was emerging from the state capture era, which had a particularly detrimental impact on institutions such as the South African Revenue Service (Sars), National Prosecuting Authority (NPA), and the Hawks.
“Since the results of the mutual evaluation were published in 2021, we have made great progress in addressing the identified shortcomings. Of the 67 recommended actions emanating from the mutual evaluation, we have successfully addressed all but eight strategic deficiencies.”
“For example, we have addressed significant weaknesses in our legal framework, through the enactment of amendments to laws on anti-money laundering and combating terrorism financing,” said the president.
He said they have restored credibility to key institutions such as Sars and the NPA, to enable them to fulfil their respective mandates.
“We have bolstered the powers of the Special Investigating Unit (SIU) by establishing a Special Tribunal to recover public funds stolen through corruption and fraud, and an Investigative Directorate in the NPA to investigate serious corruption,” said Ramaphosa.
