Fiduciary Services

South Africa’s grey-listing by the Financial Action Task Force (FATF)

By Martin Hall

01/03/2023

South Africa’s grey-listing by the Financial Action Task Force (FATF) could have several effects on the country’s economy and financial system.

The FATF is an intergovernmental organization that sets standards and promotes measures for preventing money laundering, terrorist financing, and other related threats to the integrity of the international financial system.

Here are some potential effects of South Africa being grey-listed:

1. Impact on foreign investment: Being on the grey list could make foreign investors more cautious about investing in South Africa. It could also lead to higher compliance costs for companies doing business in the country as they may need to implement additional anti-money laundering and counter-terrorism financing measures.
2. Difficulty accessing international finance: South African banks may find it more difficult to access international finance due to concerns about money laundering and terrorist financing. This could lead to higher borrowing costs and reduced liquidity in the financial system.
3. Impact on international trade: Grey-listing could also affect South Africa’s ability to participate in international trade as some countries and companies may be hesitant to do business with a country that has been flagged for potential financial crime risks.
4. Pressure to improve anti-money laundering measures: Grey-listing could serve as a wake-up call for South Africa to improve its anti-money laundering and counter-terrorism financing measures. This could lead to increased regulatory oversight and enforcement, which could help to improve the integrity of the financial system in the long run.

Atla Group has strong links with South Africa and while the grey-listing could pose additional challenges, we continue to work with clients to mitigate the risks, add value, and ensure we continue to service our clients’ needs.