South Africa risks return to money-laundering grey list
JOHANNESBURG: South Africa faces a significant risk of returning to the Financial Action Task Force’s grey list barely a year after it secured removal, according to the latest quarterly assessment from business lobby group Business Leadership South Africa (BLSA). The FATF grey list names countries under increased monitoring for weaknesses in fighting money laundering and terrorist financing. A…
South Africa teeters on the brink of rejoining the Financial Action Task Force's grey list, just one year after its removal, according to Business Leadership South Africa (BLSA). The grey list designation means the nation would face heightened scrutiny of its financial transactions, higher compliance costs for businesses, and the possibility of some international banks distancing themselves from South Africa.
South Africa was previously on the list for over two years before its removal, a situation that deterred foreign investment at the time. The BLSA Reform Tracker, released on Wednesday, reported that South Africa's corruption reform score remained steady at 51.2 in the July-September quarter, with no progress in anti-corruption efforts.
The score indicates that anti-corruption reforms are still lagging significantly, far below the overall reform score of 72.5. Stuart Theobald, executive chairman of Krutham, a research consultancy firm, warned that South Africa is at risk of re-entering the grey list, with corruption reform being the weakest point. The National Treasury, which spearheaded efforts to remove South Africa from the grey list in October 2025, did not comment on the matter.
South Africa is currently undergoing a mutual evaluation by the FATF, with a peer review expected in the first quarter of 2027. The evaluation will assess whether the country has maintained the increase in investigations, prosecutions, and asset recoveries that led to its removal from the grey list. Weaknesses in law enforcement, including investigations into organized crime and the prosecution of money laundering cases, could negatively impact South Africa's rating.
The Madlanga inquiry, an investigation into alleged corruption and interference in law enforcement, has further fueled concerns about unresolved issues in the country's criminal justice institutions. Despite this gray list warning, the overall reform tracker showed its highest score since monitoring began in March 2024, with the completion index rising to 72.5 from 71.3 in the previous quarter.
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