By James George, Compli-Serve
The Financial Action Task Force (FATF)’s decision to remove South Africa from its grey list represents more than an administrative milestone — it’s a defining moment for the country’s financial integrity framework and its global reputation. While the news has been met with justified relief, the compliance community must recognise that delisting is not the finish line; it is a reset point, signalling renewed scrutiny and heightened expectations.
A Return to Credibility
South Africa’s inclusion on the FATF grey list in February 2023 was a sharp indictment of its anti-money-laundering and counter-terrorist-financing (AML/CFT) regime. The country was judged to have robust laws on paper but weak enforcement in practice. Over the past two years, a concerted effort by regulators, policymakers, and industry stakeholders has yielded measurable improvements — from tightening beneficial-ownership disclosures and reforming trust and company laws, to strengthening the investigative and prosecutorial capacity of the Hawks, FIC, and NPA.
By successfully closing all 22 action items set out by the FATF, South Africa demonstrated that it can mobilise political will, institutional cooperation, and technical reform under pressure. The removal from the grey list now restores a measure of international confidence, reduces cross-border compliance friction, and reassures correspondent banks and investors that the country is again a credible participant in the global financial system.
The Compliance Signal Behind the Relief
To compliance professionals, delisting sends a dual signal.
First, it confirms that the risk-based approach and effective enforcement are now tangible priorities across financial institutions. The regulatory environment is maturing beyond mere box-ticking — it is about demonstrating outcomes.
Second, it signals that the bar has been raised permanently. FATF delisting does not mean less oversight; it means closer observation to ensure progress is sustained. The FATF will continue monitoring South Africa’s enforcement trajectory, conviction statistics, and asset-recovery outcomes. A relapse into complacency would invite swift re-examination.
This moment reinforces that compliance is not a static duty but a living function that evolves with the country’s risk profile. Firms must continue embedding AML/CFT compliance into business culture — not just policies — by refining risk assessments, verifying beneficial ownership data, and maintaining comprehensive due diligence and screening processes.
Institutional Strengthening and Industry Role
The legislative reforms introduced during the remediation period, including amendments to the FIC Act, Companies Act, and Trust Property Control Act, are structural in nature and cannot be allowed to erode. The Financial Intelligence Centre’s ongoing supervisory role, supported by the FSCA, SARB, and Prudential Authority, will require sustained investment in compliance capability.
The private sector, too, must resist “reform fatigue”. Now that the immediate threat of greylisting has passed, some institutions may be tempted to slow their AML programmes or re-prioritise budgets. That would be a costly mistake. The FATF’s message is clear: effectiveness — measured through prosecutions, convictions, and confiscations — will determine credibility, not compliance documentation alone.
For accountable institutions, the signal is equally clear. They must:
Maintain rigorous customer due diligence processes and ongoing monitoring;
Ensure beneficial ownership information is accurate, accessible, and verified;
Align internal risk management and compliance programmes (RMCPs) with updated FATF standards; and
Continue fostering a culture of ethical conduct and transparency.
A Broader Economic Implication
Coming off the grey list is also a vote of confidence in South Africa’s governance reform agenda. It reduces the perceived risk premium for doing business in the country, potentially lowering the cost of capital, improving cross-border payment efficiency, and supporting foreign direct investment.
However, delisting alone will not reverse economic stagnation. Sustainable growth will depend on whether these compliance gains translate into long-term institutional integrity — the kind that reassures investors, rating agencies, and counterparties that the rule of law is being consistently upheld.
The Hard Part Starts Now
South Africa’s delisting is a welcome relief — but it must be understood as a signal of conditional trust, not a declaration of victory. The FATF, investors, and the global banking community will be watching whether the country maintains momentum or lapses into the complacency that triggered greylisting in the first place.
For the compliance profession, this is both validation and a renewed call to vigilance. We have proven that coordinated reform is possible. Now, the challenge is to embed that discipline permanently — to keep South Africa clean, credible, and compliant in the eyes of the world.
