South Africa's Financial System Deemed a Money Laundering and Terrorism Financing Threat by FATF
Hello friends. A warm welcome to new readers and subscribers. I am glad you are here!
The Financial Action Task Force (FATF) officially grey-listed South Africa (SA) today , meaning the county's limitations in fighting money laundering and terrorist financing threaten the global financial system.
The FATF assessed South Africa’s anti money laundering measures in its October 2021 evaluation. The results were poor, finding that although South Africa has ‘a solid framework to fight money laundering and terrorist finance’ there are ‘significant shortcomings in implementing effective systems, including a failure to pursue serious cases’.
Being grey-listed by the FATF is bad omen and could lead to economic as well as financial sanctions and embargoes.
As posited in my preview to Minister Enoch Godongwana’s budget speech:
“This is not ideal, considering the socio-economic landscape in SA, and the expectation is that the Minister will allocate more resources to address the structural inefficiencies in implementing effective systems and failure to pursue serious cases.”
See the full preview below.
Having delivered the speach, funds to the amount of R 9.5 billion were allocated to the National Prosecuting Authority, the Special Investigating Unit, the Financial Intelligence Centre to address concerns over grey-listing, however the results of these efforts will lag and weren't enough to get SA and the Rand out of the plunge.
Our country continues to face headwinds that heighten the risk for economic downturn.
Talk to you soon.