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The Grey (List)

April 21, 2024

In the 2011 film The Grey, Liam Neeson portrays a wolf hunter who attempts to lead seven oil workers through the Alaska wilderness after their plane crashed. He leads them through the heavy snow as they are chased and attacked by relentless wolves. The film, at its heart, is about the human will to survive and what keeps us alive.

It’s a dramatic comparison, but South Africa encountered our survival struggle in February 2023 when we were placed on the grey list.

The “grey list” issue in South Africa refers to the country’s inclusion on the Financial Action Task Force’s (FATF) list of jurisdictions with strategic deficiencies in their anti-money laundering and counter-financing of terrorism (AML/CFT) frameworks. Being on this list can have significant implications for a country’s financial reputation and access to global markets. South Africa’s placement on the grey list has prompted concerns about the effectiveness of its AML/CFT measures and the potential impact on its financial sector. It often requires affected countries to take immediate action to address the identified deficiencies and enhance their regulatory frameworks to comply with international standards.

To get off the grey list, South Africa must take several measures to address the deficiencies identified by the Financial Action Task Force (FATF) in its anti-money laundering and counter-financing of terrorism (AML/CFT) framework. Some of these measures include:

  1. Strengthening Legislation: South Africa may need to enact or amend existing laws to enhance its legal framework for combating money laundering and terrorist financing. This could involve updating regulations, increasing penalties for violations, and improving mechanisms for enforcement.
  2. Enhancing Regulatory Frameworks: The country must bolster its regulatory bodies responsible for overseeing financial institutions and ensuring compliance with AML/CFT measures. This may involve providing additional resources, training, and guidance to regulatory authorities to improve their effectiveness.
  3. Improving Financial Intelligence Capabilities: South Africa needs to enhance its capacity to gather, analyse, and share financial intelligence related to money laundering and terrorist financing activities. This may involve strengthening collaboration between law enforcement agencies, financial institutions, and other relevant stakeholders.
  4. Implementing Risk-Based Approach: Adopting a risk-based approach to AML/CFT measures allows South Africa to prioritise resources and efforts in areas with the highest risk of illicit financial activities. This involves conducting risk assessments, implementing appropriate mitigation measures, and regularly reviewing and updating risk profiles.
  5. Enhancing International Cooperation: South Africa must strengthen its cooperation with other countries and international organisations to combat cross-border money laundering and terrorist financing activities effectively. This may involve improving information-sharing mechanisms, extradition treaties, and mutual legal assistance agreements.

The February 2024 FATF Plenary adopted a report by the Joint Group, which confirms that five of the twenty-two required Action Items are now addressed or largely addressed. These relate to the legal provisions criminalising terrorist financing and underpinning South Africa’s targeted financial sanction regimes related to terrorism financing and proliferation financing, increasing the use of financial intelligence from the Financial Intelligence Centre to support money laundering investigations, and increasing the resources of AML/CFT supervisors.

In a recent media statement release, the National Treasury stated that while South Africa is on track to address all the outstanding action items, it remains a challenge to address all seventeen of the remaining action items by February 2025. All relevant agencies and authorities will need to continue to demonstrate significant improvements. Additionally, these improvements must be sustained.

Let’s hope that South Africa achieves a better outcome than Liam Neeson and his fellow survivors experienced in the film and that we don’t end up at the mercy of the wolves.

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