National Treasury says that whilst South Africa is on track to address all the outstanding Action Items to exit grey listing, it remains a tough challenge to address all 14 of the remaining Action Items by February 2025.
This assertion comes after the Financial Action Task Force (FATF) published the latest update on South Africa’s progress in addressing the Action Items in its Action Plan on 28 June 2024, following the conclusion of the June 2024 FATF Plenary meetings in Singapore.
‘All relevant agencies and authorities will need to continue to demonstrate significant improvements, and also that such improvements are being sustained and are effective,’ National Treasury said on Tuesday.
When the FATF grey listed South Africa at its February 2023 Plenary meetings, it 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.
South Africa is requ
ired to address all 22 Action Items so as to exit the FATF grey list. The Action Items have differing deadlines, falling between January 2024 to January 2025.
‘National Treasury is satisfied with the outcomes of the FATF Plenary meetings. Given the FATF process, Treasury does not expect South Africa to exit grey listing before June 2025, as per the Action Plan deadlines,’ National Treasury said.
The Minister of Finance has been leading a process within government to ensure that South Africa addresses all Action Items by February 2025, to enable South Africa to exit grey listing by June 2025.
‘The FATF Plenary did not discuss the delisting of South Africa from grey listing at this juncture but focused instead on the progress made by South Africa in addressing the 17 outstanding Action Items.
‘The FATF Plenary accepted the report of the FATF Africa/ Middle East Joint Group that South Africa has largely addressed three further Action Items, and hence has 14 outstanding items left to address (from the origina
l 22),’ National Treasury explained.
The January 2025 deadline serves as a general guide on the earliest time that South Africa can be expected to have addressed all the Action Items in the Action Plan, which is two years after the placement of a country on the FATF grey list.
FATF Joint Group
‘Once all the Action Items have been addressed, the country is required to confirm its progress via an onsite visit by the FATF Joint Group.
‘As such, if the FATF Plenary determines in February 2025 that South Africa has addressed or largely addressed all 22 Action Items, it will schedule an onsite visit of the Joint Group in April/May 2025 to confirm that assessment and make a recommendation to the June 2025 FATF Plenary to remove the country from the FATF grey list.
‘If any of the Action Items remain unaddressed by the January 2025 deadline, the country will be required to continue reporting to the FATF every four months, until all the deficiencies have been addressed,’ National Treasury said.
Deadlines
At the
June 2024 meetings, the FATF Plenary adopted a report by the FATF Joint Group for Africa/ Middle East, confirming that eight of the 22 Action Items are now addressed or largely addressed in accordance with the specified deadlines.
The items that are addressed or largely addressed relate to the legal provisions criminalising terrorist financing and underpinning South Africa’s targeted financial sanction regimes, increasing the use of financial intelligence from the Financial Intelligence Centre to support money laundering investigations.
The items that are addressed also introduce risk-based tools to identify higher-risk Designated Non-Financial Businesses and Professions, the updating of the Terror Financing National Risk Assessment, and increasing the resources and capacity of relevant authorities.
‘South Africa is left with two reporting cycles in September 2024 and January 2025 in terms of the Action Plan. Many of the 14 outstanding items are due in the last two reporting cycles because South Africa has
to demonstrate that the improvements made are sustained over successive reporting periods.
‘In the next reporting cycle, South Africa is required to address (or at least largely address) nine of the outstanding Action Items in the Action Plan that are due in September 2024. The final five Action Items are due in January 2025,’ National Treasury said.
Source: South African Government News Agency