South Africa has made progress tackling most of the technical compliance deficiencies in its anti-money laundering system that led to its international grey listing rating in February this year.
This is according to the Treasury following the release of the Financial Action Task Force’s (FATF) technical compliance re-rating follow up report.
“On 27 October, the FATF Plenary formally re-rated 18 of the 20 deficiencies, based on the progress made by the South African authorities in the two-year period following the 2021 mutual evaluation (MER),” Treasury said.
“Of these, fifteen were upgraded to be no longer deficient, as 14 recommendations were now fully or largely compliant, and one recommendation was rated as not being applicable to South Africa.”
“Following these re-ratings, South Africa is now deemed to be fully or largely compliant (or not deficient) in 35 of the 40 FATF Recommendations, including in five of the six core FATF Recommendations.
“This means South Africa is left with five deficiencies in technical compliance (including three of the 18 which were upgraded from non-compliant to partially compliant), and two which remain as partially compliant since 2021.”
Treasury said the FATF follow up report does not “address the progress made by South Africa to improve the effectiveness of deficiencies” that were identified in the mutually agreed upon Action Plan following South Africa’s grey listing by FATF earlier this year.
Overcoming the deficiencies is essential for South Africa to exit the FATF grey list.
This assessment is a distinct process from addressing technical compliance and is conducted under FATF’s International Co-operation Review Group Joint Group (ICRG JG) process.
On the action items set out by the FATF following South Africa’s grey listing, Treasury said FATF’s October Plenary statement noted that South Africa has recorded “positive progress”.
“However, addressing the remaining actions within the agreed timelines will require a significant effort from all the relevant South African authorities.
“In doing so, the South African authorities will also need to demonstrate that the improvements are sustainable, before South Africa will be deemed by FATF to have adequately addressed all the action items,” Treasury said. – SAnews.gov.za
