South Africa scrubs off FATF greylisting and reclaims financial compliance mojo

When the Financial Action Task Force (FATF) met on Friday, 24 October in Paris, the world’s financial watchdog had good news for South Africa (SA). 

In a press statement following the FATF plenary meeting held from 22 to 24 October 2025, the organisation confirmed that SA, along with Burkina Faso, Mozambique and Nigeria, had been removed from the list of jurisdictions under increased monitoring after completing their respective Action Plans.

FATF President Elisa de Anda Madrazo noted that “a record of four countries have been removed from the greylist, including South Africa, which has sharpened the tools to detect money laundering and terrorist financing”. 

The FATF’s decision ends SA’s two year stint in the global naughty corner, better known as the greylist, for anti-money laundering and counter-terrorist financing (AML/CFT) compliance. Among the improvements cited were “a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of terrorist financing activities,” and “enhancing identification, seizure and confiscation of proceeds and instrumentalities of crime”. 

Read more: Progress report: South Africa edges closer to greylist removal as major compliance milestone achieved

SA’s greylisting in February 2023, was a public judgment that although the country had robust financial protection frameworks on paper, enforcement was sorely lacking. SA has managed to close 22 action items, including boosting prosecutions, cleaning up beneficial ownership records, and tightening oversight of dodgy sectors from estate agents to crypto service providers.

The National Treasury confirmed that all required reforms were “substantially completed” by June this year, followed by a FATF on-site visit in July. 

Commenting on the decision on Friday evening, the National Treasury noted that while exiting the greylist is an important milestone and a demonstration of SA’s commitment to rebuilding the rule of law, it is only the start of a broader process to continue to strengthen key institutions, improve enforcement and governance processes, and ensure that such improvements are sustainable and that (SA’s) systems become increasingly effective in combating money laundering, terrorism financing and proliferation financing. 

Leila Fourie, chairperson of Operation Phumelela,  SA’s financial sector competitiveness taskforce, and CEO of the JSE, hailed the news as a watershed moment for SA’s financial sector and economy. 

“Exiting in less than three years – ahead of the global median – highlights South Africa’s ability to drive reform when needed, and its determination to move beyond the legacy of state capture that weakened institutions of law enforcement and prosecution. The reforms implemented have strengthened our capacity to fight corruption, financial crime and economic misconduct,” she said. 

Fourie acknowledged the “extraordinary dedication of multiple stakeholders” including: 

• National Treasury for coordinating the comprehensive reform programme.
• Law enforcement agencies, including the Directorate for Priority Crime Investigation (Hawks), the State Security Agency and National Prosecuting Authority, for sustained increases in complex money laundering and terrorist financing investigations and prosecutions.
• Financial and non-financial regulators for implementing effective supervisory frameworks.
• The Companies and Intellectual Property Commission (CIPC) and high court masters’ offices for developing beneficial ownership registries to ensure transparency.
• Private sector financial institutions for enhanced compliance measures.

One of the faster cleanups in town 

Standard Bank’s head of South Africa macroeconomic research, Dr Elna Moolman, said the delisting showed “South Africa’s ability to implement change — the speed with which we’ve achieved the required changes was remarkable”. 

She believes the change could open the taps for foreign capital that had been hesitant to flow into a high risk jurisdiction. “[The delisting] gives investors comfort that we are meeting the global standards in terms of combatting money laundering and the financing of terrorism,” she explained.

Read more: SA’s exit from greylisting may be pushed out from June 2025 to October 2025 …or later

During the greylisting period, foreign institutions were advised to subject South African transactions to extra scrutiny, which translated into higher costs and slower deals. That burden is now lifted, which “paves the way for easier international transactions and capital flows”, said Moolman.

Vincent Gaudel, financial crime compliance expert at LexisNexis Risk Solutions, noted that the optimism around South Africa’s delisting is grounded in tangible progress. “South Africa has made significant progress in two key areas,” he said. “First, to improve technical compliance, Parliament amended six major laws, including the Financial Intelligence Centre Act and the Companies Act. These changes led the FATF to upgrade the country’s ratings against its 40 recommendations in 2023 and 2024.”

Gaudel pointed out that these legislative shifts matter in terms of credibility. “FATF status shapes global perceptions and economic opportunities,” he said. “Exiting the greylist restores investor confidence and market access. Maintaining effectiveness after delisting strengthens credibility and reinforces trust in South Africa’s markets.”

The real test is staying off the list  

Even as the confetti falls, we shouldn’t be celebrating too loudly.

Hawken McEwan, director of risk and compliance at nCino KYC Africa, warned that the real work starts now.

He cautioned against treating the delisting as a “mission accomplished moment”. Financial crime, he said, “is like a game of cat and mouse. As criminals up their game and become ever more creative in their schemes, we need to constantly evolve to keep up.” 

“Neither government agencies nor regulated entities in the private sector can afford to become complacent and stop improving. Instead, through public-private collaboration, they must continue to strengthen the AML/CFT system. The FATF requires countries that have exited the greylist to demonstrate continued commitment through measurable outcomes, including successful investigations, prosecutions, and sanctions as they relate to AML/CFT,” Treasury said. 

Looking ahead, these actions will form the basis of the next FATF mutual evaluation for SA, which is expected to commence in the first half of 2026 and conclude in October 2027.  Treasury has warned that to avoid being placed back on the greylist, it is important that monitoring systems and enforcement work more efficiently and effectively, and that there are no gaps, by the time of the mutual evaluation. 

Read more: After the Bell: South Africa’s greylist escape plan moves to Department of Justice. Bugger

“South Africa must sustain and enhance its existing efforts by maintaining ongoing investigations and prosecutions, strengthening regulatory capacities and applying consistent sanctions where institutions aren’t playing their part,” McEwan said. “This will all need proper continued political commitment from the top to fight the good fight.”

Playing clean   

McEwan pointed to a sharp rise in enforcement actions as proof that regulators are flexing their muscles. He noted that both the Financial Sector Conduct Authority and the Financial Intelligence Centre have significantly increased the value of fines issued for FICA-related breaches in recent years.

And the net is widening. Virtual asset service providers, or crypto exchanges, now fall under both the FAIS and FIC Acts. “Crypto assets were declared financial products in October 2022,” said McEwan, adding that “the reputational risks of being associated with financial crime can destroy decades of relationship building overnight.”

Read more: SA’s largest asset manager, the PIC, feels the greylisting sting

“Removal from the greylist reduces friction in cross-border payments for corporates and individuals,” Gaudel said. “Once jurisdictions such as the UK and EU update their high-risk lists, international counterparties require fewer enhanced due diligence steps. This enables access to correspondent banking services expansion and trade finance operations become more efficient.”

Gaudel also noted that enhanced due diligence from foreign banks had imposed operational burdens, causing frequent payment delays and elevating compliance costs. Delisting, he added, “addresses these challenges by lowering due diligence demands, which results in faster transactions, reduced costs and steadier international flows.”

The delisting must not breed complacency, McEwan said. “Greylisting fatigue” is real — the sense that once the badge of shame is gone, the urgency fades.

The FATF’s decision signals confidence, but also carries a warning. SA can no longer postpone the hard work of keeping its financial system transparent and resilient. DM