Cape Town - President Cyril Ramaphosa has admitted he is concerned about the country being relegated to “greylist” status by watchdog Financial Action Task Force (FATF), but says the situation isn’t as bad as some commentators are making it out to be.
The FATF, an international body committed to eradicating global money laundering and terrorism financing, decided at the weekend that South Africa should be greylisted, meaning the country has been placed “under increased monitoring”. Nigeria also joined the grey list.
In his weekly newsletter, Ramaphosa said the greylisting decision had caused “much concern about the state of our financial institutions, law enforcement agencies and investment environment. The situation is concerning, but less dire than some people suggest”.
“We have gone through a rigorous process of addressing the issues that FATF has raised with us. The fundamentals are in place and we know what we need to do to get off the grey list.”
He said government is determined to get off the list as soon as possible.
“This is important not only for our international standing, but also for our own ability to fight these crimes in our country,” Ramaphosa said.
He said since the fall of apartheid in 1994, the government had built “credible, independent institutions and implement(ed) effective laws to deal with complex financial crimes”, and had forged ties with international entities, such as FATF and international crime-busters Interpol.
“During South Africa’s last regular mutual evaluation of its measures to combat money laundering and the financing of terrorism, a number of deficiencies were identified,” he said.
He said the mutual evaluation was done in 2019 as the country emerged from state capture, which negatively impacted institutions such as the SA Revenue Service (Sars), the National Prosecuting Authority (NPA) and the
Hawks. He said since 2021, the government had made “great progress” in addressing the weaknesses.
Ramaphosa said: “Of the 67 recommended actions emanating from the mutual evaluation, we have successfully addressed all but eight strategic deficiencies.”
Through new laws, he said, the government addressed weaknesses in its legal framework and had “come a long way”, despite “deliberate attempts to erode the state’s ability to detect, investigate and prosecute such crimes during the state capture era”.
He said in 2020, SA had established the “Fusion Centre”, which enjoined the NPA, the Special Investigating Unit, Sars, the Hawks, Crime Intelligence, the State Security Agency and the Financial Intelligence Centre in an effort that led to the preservation and recovery of about R1.75 billion in criminal assets.
“It is noteworthy that the strategic deficiencies identified by the FATF do not relate directly to the country’s financial sector,” Ramaphosa added.
“This means that financial stability and costs of doing business with South Africa will not be seriously impacted by the grey listing.”
He said the intensified monitoring by FATF is welcomed and the government will address the remaining deficiencies identified by the organisation.
In a statement on Monday, Old Mutual threw its weight behind the government on the grey list issue, commending its commitment to rebuild the institutions that were ravaged by State capture.