Maintaining FATF Status Will Require a New Phase of Reform, Vigilance

Dr. Reneva Fourie

On 24 October 2025, the Financial Action Task Force (FATF) formally removed South Africa from its list of jurisdictions under increased monitoring, effectively ending its period on the grey list. This development represents a significant step forward.

It reflects the determined and coordinated efforts of the South African government and its key institutions to address the systemic weaknesses that were exacerbated during the period of state capture.

Those who have contributed to this outcome merit genuine recognition. Their collective work has helped steer the country away from financial marginalisation and towards a renewed sense of institutional credibility and economic opportunity.

The success of this effort rests on a carefully coordinated strategy designed to meet the FATF’s 22 action items. At the centre of this achievement has been the strengthening of investigative and asset recovery mechanisms through improved inter-agency cooperation. The establishment and empowerment of multiple collaborative structures represent a decisive shift from the fragmented approach of the past.

This integrated framework has enabled SARS and its law enforcement partners to improve the collection and analysis of financial intelligence, leading to a marked increase in investigations and in the recovery and preservation of assets connected to complex money laundering and terror financing networks.

Another central element of reform has been the expansion of access to beneficial ownership information, which directly addresses the problem of financial opacity. The introduction of reporting requirements for legal persons and trusts, supported by cooperation between SARS, the Companies and Intellectual Property Commission, and the Master of the High Court, will reveal the true ownership structures behind corporate entities. Identifying those who ultimately control companies is essential in preventing the misuse of the financial system. 

Legislative changes, including the 2023 amendments to the Tax Administration Act, have reinforced this initiative, creating a comprehensive national framework for transparency. This ensures that shell companies and complex trust arrangements can no longer be used with impunity to conceal illicit wealth, bringing South Africa closer to alignment with international standards of financial integrity.

Underlying these structural measures has been a deliberate focus on capacity building. Providing targeted training for SARS officials and other law enforcement personnel on money laundering typologies, beneficial ownership, and international legal cooperation has strengthened the human capital required to maintain the progress achieved.

This approach forms part of SARS’s broader strategy to integrate data-driven methodologies and advanced technology into its operations. The development of the digital Traveller Management System for cash declarations illustrates this forward-looking perspective, creating a modern tool to track and manage cross-border financial movements and to reduce vulnerabilities in this area.

The experience of other countries that have successfully exited the FATF grey list provides valuable context for understanding the potential benefits of South Africa’s delisting. Mauritius, for instance, was grey-listed in 2020 but removed from the list in 2021 following the introduction of robust anti-money laundering reforms.

Its delisting was followed by renewed investor confidence and a notable increase in foreign direct investment. Similarly, jurisdictions such as Malta and the Bahamas have shown that the ending of grey listing can lead to improvements in international perceptions, lower transaction costs for financial institutions, and a more attractive investment environment.

For South Africa, these outcomes are likely to be mirrored in several ways. The removal of the grey-list designation signals to global investors that the country has addressed key deficiencies in its anti-money laundering and counter-terrorism frameworks.

This signal is expected to strengthen market confidence and encourage greater participation in the South African economy. A more resilient financial system will also facilitate cross-border trade and investment by reducing compliance burdens and transaction delays often associated with grey-listed countries. 

Businesses operating domestically are likely to benefit from lower risk premiums on loans and insurance, supporting expansion, job creation, and broader economic development. These improvements also contribute to rebuilding public confidence in the integrity of the country’s financial and governance institutions.

Despite this progress, ongoing hearings regarding the infiltration of criminal networks within elements of the criminal justice system indicate that vigilance must remain constant. The delisting should therefore be understood as a milestone rather than a conclusion. Financial crime continues to evolve in scope and sophistication, reflecting underlying structural tensions within the economy and the state.

The potential for powerful interests to manipulate vulnerable individuals and public institutions for private gain remains a serious concern. Compliance with international technical standards addresses the immediate symptoms of financial misconduct but not the deeper causes that enable such practices to persist.

To ensure that South Africa’s removal from the FATF monitoring list remains permanent, a new phase of reform is required. This phase must move beyond procedural adjustments to address the structural relationship between economic power and the functioning of the state.

Sustained progress depends on building a financial monitoring framework capable of identifying and disrupting the concentration of wealth and influence that enables systemic corruption. This involves treating the economic foundations of organised criminal activity, including unemployment, poverty, and food insecurity, as key risk points.

Strengthening the state’s prosecutorial and investigative capacity is essential, but it must serve the broader goal of transforming the distribution and exercise of economic power.

The state’s administrative and enforcement functions should be directed towards safeguarding public wealth and ensuring that the legal framework protects collective interests rather than private accumulation. Enhancing protections for whistleblowers remains essential, but genuine resilience will depend on embedding oversight within the broader social fabric.

The participation of organised workers and communities in monitoring economic and institutional activity can help embed transparency. By formalising mechanisms for collective input into oversight processes, the vigilance of citizens can become a permanent element of the financial governance system.

South Africa’s removal from the FATF grey list, therefore, marks not only a technical achievement but also an opportunity to consolidate a more equitable and accountable economic order.

The challenge now lies in ensuring that the foundations laid through this reform process continue to evolve, transforming both the institutions that uphold financial integrity and the broader social conditions that determine their effectiveness.

* Dr Reneva Fourie is a policy analyst specialising in governance, development, and security.

** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.