South Africa Sees Progress in Effort to Get Off Dirty-Money List
(Bloomberg) -- A new report by the Financial Action Task Force shows South Africa is making progress in its efforts to be removed from the global watchdog’s dirty-money watchlist, the National Treasury said.
Most Read from Bloomberg
Tesla’s Cheapest Cybertruck Will Cost $60,990 and Be Available in 2025
These Are the World's Most Expensive Cities to Live In Right Now
Biggest Blowout in Bonds Since the 1980s Sparks Everything Rally
South Africa was placed on the so-called gray list in February by the FATF to denote the country’s shortcomings in tackling illicit financial flows and combating terror financing. The impact is still being felt, with the European Union adding South Africa to a group of high-risk countries in May.
A FATF report showed it has formally re-rated 18 of South Africa’s 20 deficiencies, the Treasury said in a statement on Wednesday. Of these, 15 were upgraded to be no longer deficient, 14 recommendations had been fully or largely complied with and one was rated as not being applicable to South Africa.
“Following these re-ratings, South Africa is now deemed to be fully or largely compliant” in 35 of FATF’s 40 recommendations, including five of the watchdog’s six core recommendations, the Treasury said.
South Africa’s addition to the gray list followed an era of endemic corruption — referred to locally as state capture — during former President Jacob Zuma nine-year rule that’s estimated to have seen the looting of at least 500 billion rand ($26.7 billion) in taxpayer funds. Its inclusion requires that financial transactions with a South African component are subject to enhanced due diligence.
“While the immediate impact is higher processing, monitoring and reporting costs, the long-term consequence will be the reduction of South Africa’s attractiveness as an investment destination,” the central bank said in its latest Financial Stability Report on Wednesday. “However, the risk is mitigated by the resilience of the financial sector, compliance with international regulatory standards and the efforts being made to address the adverse findings of the FATF.”
Read More: South Africa Cabinet Sees Progress Addressing FATF Graylisting
The Paris-based body has given South Africa until the end of January 2025, to address the shortcomings.
Meeting the remaining targets will require “a significant effort” from all relevant authorities in South Africa, the Treasury said.
Most Read from Bloomberg Businessweek
Anduril Builds a Tiny, Reusable Fighter Jet That Blows Up Drones
No Laws Protect People From Deepfake Porn. These Victims Fought Back
Soaring Canadian Housing Costs Power a Population Boom in Alberta
A $30 Billion Meltdown in Clean Energy Puts Biden’s Climate Goals at Risk
Facing a Shortage of Luxury Artisans, LVMH Seeks Apprentices in the US
©2023 Bloomberg L.P.