SA back from the brink, exit from greylist imminent after massive Treasury effort

After years of institutional decay and global embarrassment, South Africa is poised to exit the FATF greylist - a major financial credibility boost. Treasury veteran Ismail Momoniat explains how two years of legal, cultural, and enforcement reforms reversed the damage of state capture and rebuilt SA’s anti-money laundering system. But he warns: the real test still lies ahead..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.In a country often overwhelmed by scandal, pessimism, and institutional decay, it’s easy to miss the quieter victories. South Africa’s imminent exit from the Financial Action Task Force (FATF) greylist is one of them. Though it may not generate headlines like a celebrity corruption trial or a currency crash, it signifies something profound: a slow but measurable recovery of state capacity - and perhaps, political will.At the heart of this comeback is Ismail Momoniat, the veteran Treasury official who was effectively told by Finance Minister Enoch Godongwana that retirement would have to wait until this mission was complete. With South Africa now only an on-site verification away from being officially delisted at the FATF plenary in October, Momoniat’s quiet determination has paid off.“It’s a great relief. We’re almost out of greylisting… and I don’t want to retire yet - I still want to do work,” Momoniat told BizNews editor Alec Hogg in an in-depth interview.From state capture to greylistSouth Africa landed on the FATF’s greylist in early 2023 - an international warning sign that the country’s financial regulatory regime was weak, inconsistent, and vulnerable to money laundering and terrorism financing. For investors and global financial institutions, it’s the kind of label that triggers red flags, compliance hurdles, and capital flight.But how did we get here?“It was a direct result of state capture,” says Momoniat. "There was a deliberate weakening of institutions - SARS, the Hawks, the NPA, and others - that left us unable to investigate, prosecute, or even detect sophisticated financial crimes."Momoniat recalls the Zuma administration’s resistance to key legislation like the FICA Amendment Bill, with the former president objecting to clauses that dealt with politically exposed persons. Even after the bill passed, enforcement mechanisms remained lethargic.When South Africa underwent its last FATF peer review, it failed miserably. Of 40 required recommendations, the country was found deficient in 20. Worse still, it scored zero out of 11 in the effectiveness category - “like getting 30% in an exam,” Momoniat explains. The FATF responded by greylisting South Africa and placing it under a one-year observation period.The turnaroundFixing the system took a Herculean two-year effort.Momoniat and the Treasury team coordinated legislative reforms and administrative overhauls. Laws were passed, training manuals were rewritten, and law enforcement was finally trained to request information from the Financial Intelligence Centre (FIC) - a basic procedure that had been largely neglected. Registries were created to track beneficial ownership of companies, helping dismantle the opaque corporate structures used for laundering money.But the most difficult items, according to Momoniat, were the last two: demonstrating a sustained increase in prosecutions for serious money laundering and terrorism financing. South Africa had to prove - not just promise - that it could act.“The worst lesson would be to say everything is now hunky-dory,” he cautioned. “It actually requires us now to build on what we’ve developed.”Beyond box-tickingGreylisting was a wake-up call. And in a twist of irony, it might have done more good than harm. The pressure forced political and institutional actors to coordinate, retrain, and rebuild a fragmented system.But even as the FATF prepares to remove South Africa from the list, Momoniat is sober about what it means.“Getting off the greylist doesn’t mean we’ve solved all our problems,” he said. “It just means the mechanism is there. Corruption hasn’t ended - it’s become more entrenched.”One area demanding urgent attention is technology. From crypto laundering to dark web payments, law enforcement and even the judiciary have been playing catch-up. Momoniat noted that digital evidence - mobile data, metadata, online financial trails - now forms the core of most crimes, but the system remains under-skilled and ill-equipped to handle it.Take the case of Babita Deokaran, the health department whistleblower assassinated in 2021. Her laptop, collected by police, reportedly sat unopened for months - despite containing incriminating evidence in plain sight.The road aheadWhile the FATF may declare South Africa compliant later this year, the real test will come in 2027 during the next mutual evaluation. If state institutions regress, or if corruption reasserts its grip, South Africa could find itself right back on the greylist.Momoniat’s warning is clear: “We have to avoid being greylisted again. There must be continuous learning, and we must strengthen the culture of enforcement.”Ultimately, the greylisting saga reveals both the fragility and potential of South Africa’s state apparatus. In a post-capture environment, progress is possible - but it takes grit, leadership, and a relentless focus on the details.And while the spotlight now fades from Treasury’s task team, the infrastructure they’ve built - legal, procedural, and cultural - may prove to be one of the most important bulwarks against the next wave of institutional decay.

SA back from the brink, exit from greylist imminent after massive Treasury effort

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