On February 24, the worldwide monetary crime watchdog, the Monetary Motion Activity Power (FATF), announced that South Africa has been added to its “gray listing”. This listing consists of nations positioned underneath scrutiny to implement requirements to stop cash laundering and terrorism financing.

To get again into the FATF’s good books, South Africa is ready to undertake a raft of legislative adjustments over the subsequent three to 5 years to modernise the regulatory framework for monetary establishments and align with worldwide requirements.

In accordance with Astrid Ludin, deputy commissioner on the Monetary Sector Conduct Authority, the nation’s nationwide treasury can be finalising a Conduct of Monetary Establishments Invoice  which seeks to streamline the licensing of monetary establishments and enhance disclosure necessities to supply larger visibility into their enterprise practices. .

Moreover, the Monetary Markets Act can be being reviewed and adjustments are anticipated to be submitted to parliament by the top of the yr. A few of the anticipated adjustments embody enhanced controls over brief promoting and securities financing transactions, and extra disclosure necessities of pre- and post- buying and selling knowledge to enhance market surveillance.

In accordance with Ludin, the FSCA will spend the subsequent three years enhancing the digitisation of its techniques to allow it to streamline its reporting necessities, take away redundancies, and facilitate the sharing of data with different regulators such because the prudential authority and the Monetary Intelligence Centre.

Why was South Africa greylisted?

In accordance with the nation’s nationwide treasury, South Africa carried out poorly in its 2019 mutual analysis by the FATF, because of many establishments being crippled by state capture underneath former president Jacob Zuma’s administration. 

The nation was subsequently put underneath a one-year remark interval in October 2021 to present it time to deal with the 67 really helpful actions by the FATF following the analysis.

In January 2023, an evaluation of South Africa’s progress discovered that the nation had managed to scale back the 67 really helpful actions to eight strategic deficiencies.

The FATF then took the choice to greylist South Africa till the deficiencies are addressed.

“In abstract, the greylisting of a rustic signifies that its authorities has adopted an motion plan to deal with deficiencies recognized throughout its mutual analysis after an remark interval, and to implement such motion plan inside an outlined time interval, and with FATF monitoring such implementation,” stated the Nationwide Treasury in a press release.

Following the greylisting, the South African authorities is working to deal with the deficiencies identified by the FATF by  the top of January 2025, to adjust to the FATF’s requirements.