South Africa was placed on the FATF grey list in February 2023 — a seismic event for Africa's most sophisticated financial market. Nearly three years later, an exit appears imminent. But has anything fundamentally changed?
The 8-Point Action Plan
South Africa's action plan required: completing a National Risk Assessment; implementing risk-based supervision of banks and DNFBPs; increasing STR quality and volume; demonstrating ML investigations and prosecutions; implementing targeted financial sanctions for terrorism and proliferation financing; strengthening beneficial ownership transparency; addressing NPO sector vulnerabilities; and enhancing international cooperation.
Progress has been faster than expected. The FIC (Financial Intelligence Centre) has dramatically increased STR filings. The SARB Prudential Authority has enhanced its risk-based supervision framework. The Companies and Intellectual Property Commission has implemented a beneficial ownership register. And the NPA has secured several ML convictions.
What Didn't Change
The structural vulnerabilities that led to grey listing — state capture-era governance failures, weak enforcement capacity at SARS and the NPA, and the sheer scale of illicit financial flows through South Africa's open economy — are still present. The question is whether the institutional reforms undertaken since 2023 are durable or whether they will erode once the FATF spotlight moves elsewhere.