South Africa nears removal from FATF's Gray List
The Financial Action Task Force (FATF) has commended South Africa for its significant strides in regulating cryptocurrencies and strengthening its anti-money laundering and counter-financing of terrorism (AML/CFT) framework. This progress has been instrumental in South Africa's efforts to exit the FATF greylist, a status it has held since 2023.
Key Achievements
South Africa has made substantial progress in addressing the deficiencies outlined in the FATF's February 2023 Action Plan. The country has successfully completed all 22 action items, a significant milestone in its journey towards compliance.
The government's commitment to improving and maintaining these AML/CFT systems has been evident, with senior officials demonstrating a sustained political will to tackle these issues.
South Africa has also seen an increase in investigations and prosecutions of complex money laundering and terrorism financing cases, aligning with its risk profile. The country has developed and updated a comprehensive national counter-financing of terrorism strategy, informed by a refreshed terrorism financing risk assessment.
Moreover, the supervisory and criminal justice systems have been strengthened to prevent the misuse of the financial system for illicit activities.
Remaining Steps
The FATF Plenary's review and decision at its October 2025 meeting will be crucial. The on-site assessment findings and confirmation of sustained political commitment will form the basis of this decision.
South Africa must continue to demonstrate sustained improvements, particularly in prosecutorial outcomes and the effective implementation of the national strategy on terrorism financing.
Crypto Regulation and Compliance
In response to the growing priority the FATF has placed on regulating cryptocurrencies due to their use in money laundering and terrorist financing, South Africa has stepped up its crypto regulatory activities. Since being greylisted, the country has licensed 248 crypto firms.
However, compliance with the FATF's guidelines on implementing crypto regulations remains a challenge for many African countries. According to FATF's assessment, 97% of African countries are partially compliant or non-compliant. This issue is further highlighted by the fact that 57% of countries on the FATF grey list are African.
The Impact of Greylisting
Being on the FATF greylist has not deterred South Africa from making significant strides in its AML/CFT reforms. In addition to South Africa, Kenya, Namibia, and 10 other African countries, including South Africa and Nigeria, were added to the FATF's grey list last year.
Official confirmation from the FATF post-October 2025 is the last procedural step for South Africa's removal from the greylist. If successful, South Africa will join the ranks of countries that have effectively addressed their AML/CFT deficiencies and improved their financial systems' integrity.
- Nigeria, similar to other African countries, is facing challenges in ensuring compliance with the FATF's guidelines on implementing crypto regulations, as cited by the FATF's assessment.
- South Africa has been commended for its efforts in regulating cryptocurrencies, a move that has been instrumental in addressing AML/CFT deficiencies and has resulted in the licensing of 248 crypto firms.
- The impact of being on the FATF greylist has not hindered South Africa's progress in AML/CFT reforms, with countries like Nigeria also on the grey list last year, continuing to make significant strides in this area.
- The progress made by South Africa in exiting the FATF greylist, achieved through addressing deficiencies in AML/CFT, aligns with the general news of improving business and political environments across Africa.
