National Treasury provides update on South Africa's progress in getting off the FATF grey list

National Treasury confirmed that South Africa now complies or largely complies with 37 of the 40 FATF Recommendations, including complying or largely complying with all 6 core Recommendations.  A reminder that in terms of the 2021 mutual evaluation that brought the country onto the grey list, South Africa was found to be wanting in 20 of the FATF 40 Recommendations.

In February 2023, to be removed from the grey list, South Africa devised a 22 point action plan, each with a deadline. National Treasury stated that only 6 of the 22 points remain outstanding. One of those are that South Africa should demonstrate that competent authorities have timely access to adequate, accurate and up to date beneficial ownership information of legal persons and arrangements.

5 of the 6 outstanding points all have a deadline of January 2025, however the last point, dealing with beneficial ownership, had a deadline of September 2024. In this regard, FATF noted that the South African registries for both companies and trusts was found to be wanting. As such, National Treasury has urged trusts and companies to register their beneficial ownership with the Masters' Office and CIPC respectively.

The sentiment of National Treasury has already been actioned by the relevant domestic regulatory authorities. The recently introduced regulation 32A of the Companies Act, 2008, requires affected companies to establish a register of persons who hold beneficial interest equal to or in excess of five percent or more of the total number of securities. Additionally, the Financial Intelligence Centre (FIC), published PCC 59 in August 2024, which "strongly recommends" that accountable institutions identify all persons who hold five percent or more of an ownership interest in a legal person, which persons can be regarded as beneficial owners for purposes of section 21B(2) of the FIC Act.

National Treasury, in concluding its statement, acknowledged the progress made by South Africa in addressing the action items, but also reiterated that the onus is on both the regulatory authorities and also the relevant juristic entities to continue building on the improvements made to South Africa's AML/CFT framework. 

Looking ahead, should South Africa successfully resolve all outstanding action points in the upcoming reporting cycle, the FATF Plenary in February 2025 will greenlight an onsite visit by the FATF Africa Joint Group to assess the progress made. This visit would occur around May 2025. If the results of the onsite assessment are favourable, the FATF Africa Joint Group will recommend to the FATF Plenary in June 2025 that South Africa be removed from the FATF grey list.