South Africa off FATF grey list after sweeping financial reforms
Key topics:
FATF removes South Africa from its grey list after two years of sweeping financial reforms
Exit expected to boost investment, cut transaction costs, and strengthen the rand
Ongoing collaboration between state and private sector to prevent future financial crime
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Operation Phumelela celebrates South Africa’s exit from the FATF grey list
Issued by Operation Phumelela
Historic milestone marks restoration of country’s financial integrity and global standing
Operation Phumelela today welcomes the Financial Action Task Force's (FATF) decision to remove South Africa from its grey list of jurisdictions under increased monitoring, marking a pivotal achievement in the nation's commitment to financial transparency and integrity.
After two years and eight months of intensive reforms, South Africa has successfully addressed all 22 action items identified by FATF – the global money laundering and terrorist financing watchdog – when it placed the country on the grey list. This demonstrates substantial progress in combating money laundering, terrorist financing, and proliferation financing.
"This is a watershed moment for South Africa's financial sector and economy," says Leila Fourie, chairperson of Operation Phumelela and CEO of the JSE. "Exiting the FATF grey list restores confidence in our financial system, strengthens our position as a leading African financial hub, and reaffirms our commitment to global standards of financial integrity."
A testament to collaborative effort
Operation Phumelela acknowledges the extraordinary dedication of multiple stakeholders who made this achievement possible:
National Treasury for coordinating the comprehensive reform programme
Law enforcement agencies, including the Directorate for Priority Crime Investigation (Hawks), State Security Agency and National Prosecuting Authority, for sustained increases in complex money laundering and terrorist financing investigations and prosecutions
Financial and non-financial regulators for implementing effective supervisory frameworks
The Companies and Intellectual Property Commission (CIPC) and high court masters’ offices for developing beneficial ownership registries to ensure transparency
Private sector financial institutions for enhanced compliance measures
Exiting in less than three years – ahead of the global median – highlights South Africa’s ability to drive reform when needed, and its determination to move beyond the legacy of state capture that weakened institutions of law enforcement and prosecution. The reforms implemented have strengthened our capacity to fight corruption, financial crime and economic misconduct.
Economic and investment implications
Grey listing has had significant adverse effects on South Africa's economy, including:
Reputational damage affecting investor confidence
Increased borrowing costs
Reduced foreign direct investment
Enhanced scrutiny of cross-border transactions
Today's exit from the FATF grey list is expected to:
Restore South Africa's reputation in global financial markets
Reduce transaction costs for South African businesses
Attract increased foreign investment
Lower sovereign borrowing costs
Strengthen regional financial integration across SADC and the African continent
While celebrating this milestone, Operation Phumelela emphasises that exit from the grey list is not the end of the journey, but the beginning of a sustained commitment to maintaining and strengthening South Africa's anti-money laundering and counter-terrorist financing systems.
"The improvements implemented are permanent fixtures of our financial architecture," says Fourie. “We remain committed to working with the FATF global network and our regional partners to preserve and advance the integrity of both the South African and global financial systems."
Looking ahead
The exit from the grey list will enhance South Africa’s competitiveness as a regional financial hub. Operation Phumelela will continue its work to:
Promote South Africa as a preferred destination for financial services and investment
Support ongoing regulatory development to enable competitive global financial services from South Africa
Facilitate public-private partnerships to combat financial crime
Strengthen South Africa's position as Africa's leading financial centre
This achievement positions South Africa to leverage its restored reputation to attract investment, create jobs, and drive economic growth across all sectors.
SA delisted - What comes next?
By Lenee Green, Lerato Lamola and Michael Denega, partners, Webber Wentzel
The Financial Action Task Force's (FATF) confirmed at its Plenary held during the week of 20 – 24 October 2025 that South Africa has been removed from the FATF's greylist. The country was originally added to the Financial Action Task Force (FATF) greylist in February 2023, placing it under enhanced monitoring due to deficiencies in its anti-money laundering and counter-terrorism financing (AML/CFT) framework.
Over the past two years, the National Treasury and regulatory agencies implemented significant reforms, culminating in the FATF’s June 2025 statement that South Africa had “substantially completed its action plan”. Following the June FATF Plenary, South Africa underwent an in-country onsite visit to allow the FATF to confirm the substantial completion of the action plan on the ground.
Investment outlook
Following South Africa's delisting, we expect a renewed optimism for increased foreign investment, building on the steady foreign direct investment that continued even during the greylisting period, as evidenced by data from PWC's Economic Outlook Report 2024/2025 and the Reserve Bank of South Africa's annual report 2024/25. According to the 2025 budget review of National Treasury, Economic growth has continued after over a decade of stagnant growth.The investor community has observed similar reform-and-recovery patterns in other jurisdictions that successfully navigated the FATF process, such as Mauritius (greylisted in 2020 and delisted in 2022); Botswana (2018 → 2021); Pakistan (2018 → 2022); Turkey and Jamaica (removed 2024). In each case, market sentiment recovered well before formal delisting once FATF acknowledged progress and timelines became clear. This has established a predictable reform-to-delisting cycle of roughly two to three years.
By late 2024, fixed-income spreads, the rand, and cross-border capital flow indicators showed that investors were already discounting the likelihood of South Africa's eventual removal. Credit analysts (Moody's, RMB, Investec) described the listing as a "transitory compliance risk" rather than a structural credit issue.
Private-equity investors adjusted operationally, strengthening 'know your customer' and beneficial ownership verification, but did not materially reprice South African assets for sustained jurisdictional risk. Deal execution slowed during 2023 and 2024, but stabilised in 2025, consistent with expectations of an imminent delisting.
In short, the greylisting penalty has already been priced in and largely amortised over the past two years. Fundraising showed investor caution peaked in 2023 and 2024, but engagement improved through 2025 as international investors viewed the FATF process as nearing completion.
Compliance costs, with enhanced AML/CFT processes are now standard operating practice and will remain, irrespective of delisting.
Given historical precedent and the June 2025 FATF progress report, markets have already internalised South Africa's likely removal from the greylist. While the formal announcement will deliver a symbolic confidence boost and may modestly ease transaction-banking friction, it is unlikely to trigger significant capital-market repricing.
During the greylisting period, the cost associated with foreign investment was a concern, with the SARB annual report noting that "effects of being greylisted were felt as foreign counterparties apply greater scrutiny to our domestic institutions". The cost of increased compliance was felt by domestic institutions doing business with foreign investors. The cost of non-compliance resulted in hefty administrative penalties being imposed on various institutions by regulatory authorities, including the Financial Sector Conduct Authority and the Prudential Authority.
With South Africa now delisted, we expect foreign investment to increase while maintaining the enhanced scrutiny and compliance standards that were developed during the greylisting period.
Regulatory and enforcement outlook
An important ongoing focus for regulatory authorities is the effective implementation of obligations under the Financial Intelligence Centre Act, 2001 (FICA) that accountable institutions are subject to.
Based on the Financial Intelligence Centre (FIC) annual report 2024/2025, Acting Director, Pieter Smit, stated that 55 262 institutions registered with the FIC and more than 13,5 million regulatory reports were submitted in the past year. The FIC conducted 556 inspections into medium-to-high-risk institutions. It is evident that the FIC will continue to address financial crime and implement measures to strengthen South African's AML frameworks.
One positive outcome following the FATF's involvement, is the ongoing commitment by South Africa, in particular the National Prosecution Authority and the FIC, to continue to demonstrate effective measures to identify and prosecute financial crime.
Regulatory authorities are continuing to build the necessary capacity to investigate entities across all industries. They have imposed various penalties since 2023 to date, focusing on accountable institutions in the financial services industry, including banks, insurers, asset managers and financial services providers.
Key observations regarding the regulatory authorities' supervisory role following South Africa's successful delisting and the commitment to fighting financial crime include:
A continued focus on ensuring enhanced risk management and compliance programmes that meet FICA requirements.
Practical methods of implementation, not purely theoretical or tick box compliance.
Addressing risk exposures to prevent financial crimes.
Training and awareness to improve understanding of AML/CFT/CPF measures.
Engagement with all stakeholders to combat financial crime collectively.
Effective prosecution.
The delisting is therefore a milestone to be celebrated, demonstrating how South Africa addressed and overcame the deficiencies identified by the FATF.
Although there is excitement following South Africa's successful delisting, the country is not completely out of the FATF's radar. The next round of mutual evaluations by the FATF will be in 2026/2027 and South Africa is on the list of countries to be evaluated. At that juncture, the FATF will once again assess whether South Africa continues to maintain the standards required by its recommendations.
Business for South Africa (B4SA) welcomes SA’s removal from the FATF grey list
Johannesburg, 24 October 2025 – Business for South Africa (B4SA) welcomes the announcement that South Africa has been removed from the Financial Action Task Force (FATF) grey list of jurisdictions under increased monitoring.
This marks a significant milestone for the country and reflects the extensive work undertaken by government, regulators, and law enforcement agencies to strengthen South Africa’s anti-money laundering and counter-terrorism financing framework. The reforms implemented over the past two years, including legislative changes, institutional strengthening, and improved supervisory capacity, demonstrate South Africa’s commitment to safeguarding the integrity of its financial system.
Within the framework of the Government Business Partnership, the Crime and Corruption focal area continues to support these efforts, particularly in preparing for South Africa’s next FATF mutual evaluation in 2026 to ensure the country remains off the grey list. This work includes initiatives to strengthen the criminal justice system’s capacity to investigate and prosecute complex financial crimes.
Through the South African Banking Risk Information Centre (SABRIC), business is assisting the Directorate for Priority Crime Investigation (DPCI) to strengthen its digital and financial investigation capacity, including awareness and training initiatives that enhance understanding of financial systems and transactions.
Neal Froneman, Chairman of Business Against Crime (BACSA), who, together with Mary Vilakazi and Jannie Durand, champions the Partnership’s Crime and Corruption focal area, said: “This is an excellent outcome for South Africa. The initiatives underway to tackle crime and corruption are not only crucial for unlocking investment in the country, but are also meaningful to the lives of ordinary South Africans. There is more work to be done but what has been achieved so far again demonstrates the benefits that can be unlocked when the private and public sectors work together in the national interest.”
South Africa’s removal from the grey list will help reduce transaction costs, enhance investor confidence, and improve the ease of doing business, particularly in the financial sector. It sends a clear signal to international partners that South Africa is committed to transparency, accountability, and global best practice.
B4SA is proud of the team, led by the National Treasury, who helped South Africa achieve this outcome. Maintaining this progress will be vital to ensuring that our financial systems remain robust, credible, and globally competitive.
MEDIA STATEMENT BY THE COMMISSIONER OF THE SOUTH AFRICAN REVENUE SERVICE (SARS) ON SOUTH AFRICA’S EXIT FROM THE FATF GREY LIST
Tshwane, 24 October 2025 - The South African Revenue Service (SARS) today welcomes the decision by the Financial Action Task Force (FATF) to delist South Africa from its "grey list" of jurisdictions under increased monitoring. This is a significant moment for our country and a testament to the whole of government approach and its institutions to restore the integrity of our financial system.
While the FATF's initial grey-listing in February 2023 was a consequence of systemic weaknesses aggravated during the era of state capture, SARS is acutely aware that it, along with other key institutions, was impacted and must continue to play a crucial role in preventing any future regression. Commissioner Edward Kieswetter notes that “we recognise that removing the designation of grey listing is not a finish line but a milestone on a long-term journey toward building a robust and resilient financial ecosystem”.
SARS is proud to have supported the national effort to meet the 22 action items required by the FATF. Our specific contributions include:
Enhanced investigation and collaborate recovery:
In partnership with other law enforcement agencies through forums such as the National Priority Crime Operational Committee (NPCOC), the National Joint Operational and Intelligence Structure (NATJOINTS), the Inter-Agency Working Group on Illicit Financial Flows, the Fusion Centre, the South African Anti-Money Laundering Integrated Taskforce (SAMLIT), Inter-Agency Working Group on Illegal Money or Value Transfer Services (MVTS) and the State Capture Task Force, SARS has strengthened its financial intelligence-gathering capabilities and increased investigations and asset preservation/recovery in relation to tax and customs crime matters involving complex money laundering and terror financing schemes.
Increased access to beneficial ownership information:
We have introduced beneficial ownership reporting obligations for legal persons and trusts as well as collaborated closely with the Companies and Intellectual Property Commission (CIPC) and the Master of the High Court (MOHC) to improve access to accurate and up-to-date beneficial ownership information for legal persons and trusts.
The introduction of key legislative amendments:
The Tax Administration Act was amended in 2023 to enable information exchange with CIPC, MOHC and the Department of Social Development (DSD) further supporting the national beneficial ownership information framework.
The rollout of a Traveller Management System:
The development and piloting of a digital traveller declaration system for cash and bearer negotiable instruments (BNIs) on entry and exit at all borders. This system enables the sharing of information with the FIC and is expected to become mandatory by the end of 2025.
Capacity building (joint and SARS driven):
SARS provided training to its officials as well as other law enforcement officials on money laundering, beneficial ownership, legal gateways for information exchange and the application of mutual legal assistance. This aligns with SARS's broader strategy to use data-driven insights and sophisticated technology to detect and combat tax evasion and other financial crimes.
SARS's focus now shifts to embedding these improvements permanently and sustainably into our operational DNA. This means continuing to:
Make it clear and easy for taxpayers to comply with their obligations to pay tax.
Enforce our tax and customs laws decisively and fairly without fear, favour, or bias.
Cooperate effectively with domestic and international partners in combatting the illicit economy.
Utilise sophisticated data and business intelligence to understand and counter illicit financial flows.
Commissioner Kieswetter says that “this delisting is a vote of confidence in South Africa's progress, but it is not an end to our vigilance. The fight against financial crime and corruption is a continuous one. SARS remains committed to upholding the highest standards of financial integrity and, as we approach the new round of FATF review commencing in the latter part of 2026, SARS will work relentlessly to ensure that we do what is required to combat the illicit economy. By doing so, we will not only maintain our standing with FATF but, more importantly, continue to build public trust and confidence in our financial system, and create a stronger, more prosperous South Africa for all.”