South Africa was grey listed in February 2023. South Africa adopted a jointly agreed Action Plan containing 22 Action Items linked to the eight strategic deficiencies identified in the country’s Anti-Money Laundering and the Combating of the Financing of Terrorism (AML/CFT) regime.
In simple words, the international community could not tell enough of a difference between good and bad money flowing in South Africa. This meant that certain financial transactions essentially had more red tape than usual. Not great for a country that needs foreign investment. I am happy to report, that there are some credible sources that believe that we are firmly on the way to getting off this list and back to our previous highs as a lower risk investment destination.
I quote from an article written by Amanda Visser (10 Sep 2024) from Money web, as she describes the latest news and some talking points on this. Please do check the article out.
“South Africa expects to be off the dreaded grey list by June next year. However, failing that, there might be an extension of another four months to October.”
Timeframe
“If South Africa manages to deal with eight to ten matters, it leaves four to six issues for the last reporting cycle that starts in October. If we do manage to get them all done, then there will be a site visit around May next year, and we would exit the grey list at the earliest in June next year,” he said during the annual Tax Indaba in Cape Town”.
The challenge
“A tough challenge is demonstrating to the Financial Action Task Force that the country’s criminal justice system can successfully investigate and prosecute those involved in financial crimes. If businesses do not see themselves as part of the solution, the financial intelligence centre has only one option left, and that is to issue non-compliance sanctions”.
Enablers of corruption
“Paul Gering, a tax specialist at PKF, noted the lack of action against those named in the Zondo Commission’s report on state capture. He accused government of coming with a “stick” at the private sector for non-compliance and being enablers of corruption and money laundering”.
Final thoughts
I find it comforting that many uncomfortable topics are being discussed openly. Like government corruption, double standards that contribute to the current situation. But it’s also encouraging that both public and private entities have taken the call to action seriously and we are on track to reclaim our former glory, as one of the apex emerging markets to do business with. Long may it last!
