Treasury: Update re FATF greylisting

Treasury: Update re FATF greylisting

• 03 July 2024
• Regulatory Compliance and Legislation
• South African Accounting Academy

South Africa was greylisted in February 2023 because of ‘eight strategic deficiencies’ in its anti-money laundering and combating terrorism financing regime. The action plan focuses on 22 items requiring attention.

Having ‘largely addressed’ 3 more of these items, South Africa now has 14 to tackle before the end of January 2025 – in anticipation of a FATF plenary the following month. Should the plenary be satisfied that all 22 action items have been fully or largely addressed, a FATF ‘joint group’ will conduct a site visit to confirm that this is so and recommend South Africa’s removal from the grey list.

Progress thus far has focused on:

• legal provisions criminalising terrorist financing and ‘underpinning South Africa’s targeted financial sanctions regime’
• increasing the use of financial intelligence to support money laundering investigations
• ‘the introduction of risk-based tools to identify higher-risk designated non-financial businesses and professions’
• ‘updating … the terror financing national risk assessment’ system, and
• ‘increasing the resources and capacity of relevant authorities’.

The statement describes as ‘a tough challenge’ the process of addressing all 14 outstanding action items concerned by the end of January 2025. Should things not go according to plan, the 4-monthly cycle of reporting to the FATF will continue until all 22 deficiencies have been rectified.

Click here to download the Media Statement:

https://www.gov.za/news/media-statements/treasury-financial-action-task-force-greylisting-02-jul-2024

Relevance to Auditors, Independent Reviewers & Accountants:

• FICA is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• Auditors, Independent Reviewers and Accountants should be aware of the latest publications and guidance issued by regulators, such as the FATF.
• As an accountable institution, a business owner and individual, you need to be aware of developments in respect of our country’s greylisting.

Relevance to Your Clients:

• An accountable institution, as well as an entity (company or close corporation), has a duty to comply with the FICA, otherwise they could be held liable.
• As an accountable institution, a business owner and individual, you need to be aware of developments in respect of our country’s greylisting.

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