South Africa hopes to be removed from an international financial crime watchdog's "grey" list in October this year, given the work that is under way to fix identified issues, with only two items remaining, a National Treasury official said on Wednesday.
Being placed on the international Financial Action Task Force (FATF) list in 2023 was a reputational setback for Africa's most advanced economy, and analysts had said it could complicate its attempts to obtain funding and support from multilateral development institutions and official lenders.
The list includes 25 countries placed under special scrutiny as they implement standards to prevent money laundering and terrorist financing.
Speaking at a financial sector conference, National Treasury official Ismail Momoniat said being on the watch list "has been good for South Africa, as many of our key institutions, especially in law enforcement, were deliberately weakened under state capture."
State capture is a type of systematic corruption whereby small groups take control or influence government institutions and regulators for their own personal gain.
"The good news is that we've only got what are called two action items to do," he told the conference.
One item he said, relates to proving a sustained increase in investigations and in prosecutions for serious and complex money laundering activities, in particular involving professional money laundering networks or enablers and third party money laundering.
South Africa must also demonstrate a sustained increase in identification, investigations and prosecution of the full range of terrorist financing activities.
Momoniat said the remaining two items "are the toughest" as it is a big challenge to find and prove third party money laundering.
"If we address all the items by June, as. ... I think it's quite likely we'll pass the test," FATF will approve an onsite visit in September, Momoniat said.
If South Africa passes the site visit test, it will exit the watch list in October, he added
Reuters
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