On February 24, the Monetary Motion Job Power (FATF) introduced that it had positioned South Africa on its “grey checklist.” The monetary watchdog has identified the group of countries as having “strategic deficiencies” that must be addressed within a specified timeframe. Being graylisted may make securing international bank loans easier for South Africa.
South Africa has been attempting to avoid inclusion on the FATF grey list for some time. After the FATF raised concerns about the lack of regulation of such assets, the country’s monetary business watchdog recently designated cryptocurrencies as merchandise. Some commentators consider that this transfer will assist South Africa to keep away from being included within the grey checklist.
Nonetheless, current FATF statements indicate that the country is not doing enough to avoid this outcome. In response, the South African Reserve Financial institution (SARB) pledged to “strengthen oversight to improve the dissuasion and proportionality of administrative penalties.”
The SARB also stated that banks and other financial institutions might play a role in addressing the deficiencies identified by the FATF. “SARB expects banks and different monetary establishments inside its remit to adjust to all their obligations totally and to implement the excessive requirements of regulation essential to protect and defend the integrity of the monetary system. These actions, along with those taken by South Africa’s Regulation Enforcement and other authorities, contribute to an efficient AML/CFT/CPF system,” the central bank stated.
According to the report, being on the FATF grey list may make it difficult for South Africa to secure loans from international banks that are wary of the regulator’s transfer. A 2021 IMF paper also suggested that countries on the grey list may face disruptions in the flow of capital into their economies.
South Africa’s inclusion on the FATF grey list is a significant setback for the country. The federal government and financial institutions must collaborate to address the issues identified by regulators and improve the country’s standing on the global monetary stage.