FATF status

South Africa is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

Since February 2023, when South Africa made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, South Africa has taken steps towards improving its AML/CFT regime including by demonstrating a sustained increase in outbound MLA requests, strengthening its AML/CFT supervisory capacity by improving the risk-based supervision of DNFBPs, enhancing its identification, seizure and confiscation of proceeds and instrumentalities of a wider range of predicate crimes, in line with its risk profile, updating and implementing its TF strategy and increasing relevant authorities’ TF capabilities on the basis of an understanding of its TF risks, as well as ensuring the effective implementation of targeted financial sanctions. South Africa should continue to work on implementing its action plan to address its remaining strategic deficiencies, including by: (1) demonstrating that all AML/CFT supervisors apply effective, proportionate, and effective sanctions for non-compliance; (2) ensuring that competent authorities have timely access to accurate and up-to-date BO information on legal persons and arrangements and applying sanctions for breaches of violation by legal persons to beneficial ownership obligations; (3) demonstrate a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF activities in line with its risk profile. 

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in South Africa was undertaken in 2023. According to that Evaluation, South Africa was deemed Compliant for 5 and Largely Compliant for 29 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

South Africa has a comprehensive anti-corruption framework, yet enforcement remains weak, leading to significant corruption, especially in public procurement. The government has initiated several judicial inquiries to address corruption, notably the Zondo Commission, which highlighted extensive corruption during former President Jacob Zuma's administration. Despite the existence of laws like the Prevention and Combating of Corruption Act, the lack of whistleblower protections and inconsistent implementation hinder effective accountability.

South Africa has the most advanced economy in sub-Saharan Africa, characterized by a mature financial sector and deep capital markets that attract regional investment. However, the country faces significant challenges, including a decade of stagnation due to corruption and mismanagement, ongoing energy crises, and high unemployment rates, which hinder economic growth and investment opportunities.

South Africa's investment climate is characterized by its advanced economy, stable institutions, and robust legal framework, making it an attractive hub for regional investment. However, challenges such as persistent load shedding, corruption, and policy uncertainty hinder its potential, leading to a sub-investment grade credit rating by major agencies. Despite these issues, the government actively promotes foreign investment through various incentives and initiatives aimed at economic transformation.