South African warning: FATF ‘grey listing’ is a threat to your financial health

Sep 6, 2022 | South African Expats

All South Africans should inform and protect themselves from the FATF's enforcement action against our financial system.

South African Greylisting Inform yourselves protect your wealth

The Financial Action Task Force (FATF) is the world’s money laundering and terrorist financing watchdog. It is a powerful global organisation with its spotlight on South Africa.

Last October (2021), FATF published a report about the South African financial system’s vulnerability to money laundering and terrorist financing, including but not limited to State Capture. It gave an ultimatum that if South Africa didn’t get its house in order by October this year, it would be placed on the FATF’s ‘Grey List’.

South Africa and the FATF Grey List

Inclusion on the grey list would mean South Africa joining the company of countries with questionable financial probity, such as Pakistan, Syria and Yemen. FATF has recently promoted Zimbabwe out of the list, a fact that should give all South Africans pause to consider how far their country’s financial reputation has fallen.

What will happen if South Africa goes on the Grey List?

Inclusion on the Grey List means FATF would closely monitor South Africa’s international financial transactions for evidence of money laundering and terrorist financing. This complicates all international financial transactions, creates barriers to cross-border business and trade, and shrinks economies.

The IMF assesses the cost of being on the Grey List is equivalent to a loss of GDP of 7.6%. That equates to nearly US$23billion, almost ZAR 400 billion!

The economic effects would be catastrophic, particularly when added to other headwinds that have tested the country to the limit over the past few years. It will cost every South African, particularly those that are unprepared.

Will South Africa go on the FATF Grey List?

This October (2022), the FATF will assess whether South Africa has made enough progress on agreed goals to remain off the list. The government has been slow to meet the FATF’s recommendations and, to date, has met the required standard on only half of the 40 required recommendations.

The government is trying to rush amended legislation, but time is short, and the deadline is looming. In July, the deputy director-general of Treasury, Ismail Momoniat said it ‘will have to perform a few miracles‘ to escape the list and many are saying it’s too little, too late.

Should you be concerned?

I don’t know for certain whether South Africa will avoid inclusion on the list or not. Still, any objective assessment must conclude that there is a significant element of risk that the worst could happen and that the consequences will be severe. That threat level leads me to recommend that all South Africans take it seriously.

What should you do next?

Inform yourself about the threat

Do due diligence about the FATF and its ultimatum to South Africa, so you are fully informed about this potential threat.
The links in this article can form a starting point from which to carry out your own research.

Assess the impact on your finances

If South Africa is placed on the grey list, how will it affect you?
What will the impact be on your property assets, your pension and your investments?
How will it complicate your international transactions?
Make a realistic assessment to decide if you need to take action.

Protect yourself

The FATF visits South Africa at the end of October to assess if sufficient progress has been made during the one-year observation period. If they conclude that South Africa has fallen short, the country may be grey listed as early as February 2023.

It is a tight deadline but taking action now will help you mitigate the effects and protect your wealth.

Protecting yourself financially from the worst consequences of South Africa being included on the grey list is possible. If you need assistance to help you navigate the threat and secure a better outcome for you and your family, please book a call with Michele to find out how she can help.

Join Our Webinar

South Africa’s potential grey listing – The threat to your financial health

Soth Africa Grey List

A dark cloud is hanging over the South African financial system. The Financial Action Task Force (FATF), the intergovernmental global money laundering and terrorist financing watchdog, has South Africa in its sights and is threatening to add South Africa to its grey list alongside the likes of Pakistan, Syria and Yemen. 

The financial consequences will be dire for both the economy and individual South Africans. However, it is best to be informed and prepared because the National Treasury has stated it will be a miracle if South Africa escapes the list. 

This webinar will explain what going on the grey list will mean for the country and South African investors, both in South Africa and living overseas.

The webinar will address these questions: 

✅ What is the FATF and the grey list?
✅ Why has South Africa been flagged for grey listing?
✅ What are the consequences for the South African economy?
✅ How will the listing affect South Africans?
✅ What will be the impact on your finances and investments?
✅ How can you protect yourself?

At the end of the webinar, there will be a Q&A to allow the audience to put their questions.

FATF grey listing is a severe threat to your financial health. Do not take this lightly. Inform and protect yourself. 

Please register to join us live and secure access to the webinar recording.





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