South Africa Greylisted

South Africa was put on the Financial Action Task Force (FATF) list on 24 February because it does not have sufficient mechanisms in place to monitor and combat money laundering and terrorist financial activities.

What does this mean?

Grey-listing will:

• increase the costs and red tape for South African banks;  
• indicate to other countries and international businesses that it is riskier to do transactions with South African companies and individuals;
• result in South Africans facing more due diligence from international banks when they want to transact, which could make it more expensive to trade and have bank or investment accounts overseas;
• lead to local and international banks asking more questions about the source of funds coming to them and require more documentation to prove the source.

National Treasury has said it is examining how other nations were able to get removed from the grey list, and will ask the FATF to review its status at its June plenary session.