‘Miracles’ needed to stop a deficient SA from being greylisted by global anti-terror financing watchdog

Parliament has now pulled up the National Treasury’s handbrake, insisting on due process when Treasury officials pushed South Africa’s two financing committees to quickly adopt far-ranging changes to schedules of the Financial Intelligence Centre Act of 2001 (Fica).

The issue is best described in the Treasury’s own words and emphasis: 

“We are almost certainly headed to be GREYLISTED by the [Financial Action Task Force] next FEB 2023 UNLESS WE PERFORM A FEW MIRACLES.

“The implications: A GREYLISTING IS COMPARABLE TO A RATINGS DOWNGRADE, especially if SA is deemed not to be trying to address its deficiencies.”

Known worldwide for its measured and diplomatic approach, the National Treasury is not in the habit of screaming in underlined capitals. When it does, as in this latest presentation to journalists by Acting Director-General Ismail Momoniat, it seems prudent to take it seriously. 

The Financial Action Task Force (FATF) is an intergovernmental policymaking body combating all forms of money laundering and terrorism financing. It ensures a coordinated global response to prevent organised crime, corruption and terrorism. 

To be greylisted by the FATF means a country’s shortcomings are a threat to the international financial system and a serious blow to a country’s reputation. Such a country is then subjected to increased monitoring and has to deal with adverse economic consequences for trade and transactions with other countries. 

Regulators in the US, UK and EU may also restrict their banks from transacting with greylisted countries’ banks. The FATF’s greylisted countries include Cambodia, Cayman Islands, Burkina Faso, Albania, Yemen, Pakistan and Syria. 

Blacklisted countries — at this stage only North Korea and Iran — are officially seen as high-risk jurisdictions. The list is a warning of the significant danger of money laundering and terrorism financing that a particular nation holds in global dealings.

“Given the greylisting we face, the sooner we do things, the better for us,” the Treasury’s Momoniat said in an address to Parliament’s joint meeting of the standing and select committees on finance on 15 June.

Speaking virtually from Berlin where he attended a FATF meeting, Momoniat briefed the committees on proposed amendments of schedule 1, 2 and 3 of the Financial Intelligence Centre Act of 2001. 

Momoniat accepted criticism by MPs that the Treasury should have given Parliament more time to follow “due process” rather than attempt to force Parliament’s hand in making a “rushed” decision.

But Momoniat reminded Parliament that the process of aligning South Africa with international standards had started as early as 2015. The Treasury’s last briefing to Parliament was in February 2022.

It “has been a slow [process] with lots of consultation”, Momoniat said. He emphasised that South Africa was “well behind” international anti-money laundering and anti-terrorism funding standards.

Momoniat was gracious enough not to also remind Parliament that the ANC Cabinet, the justice cluster’s ministers and parliamentary committees of the Zuma era were the stumbling blocks in bringing South Africa’s legislation and enforcement implementation up to scratch — at the time, mostly at the behest of the Guptas and other Zuma acolytes.

How the FATF peer review rated SA

• Customer due diligence;


• Terrorist financing offences; and


• Targeted financial sanctions for terrorism and terrorist financing. 

How do we get out of this mess?