Johannesburg - The country’s greylisting by the Financial Action Task Force (FATF) could have been avoided, many political parties said following Friday’s announcement by the FATF. ActionSA blamed the ANC for the country’s recent greylisting. Analysts believe the country’s international credibility will erode the longer it remains on the grey list.
The FATF said money-laundering investigations and prosecutions need to increase, leading to the seizure of assets linked to crimes.
It is reported that greylisting will result in increased scrutiny, which puts the country’s banking sector at a disadvantage in detecting threats of fraud and criminality.
This comes amid reports that foreigner-owned spaza shops have been accused of funnelling billions of rand to terrorists in North Africa and engaging in money laundering in South Africa.
On Friday, the FATF placed South Africa on its grey list of jurisdictions under increased monitoring, with ActionSA saying this is a devastating development that will further harm the country’s already ailing economy and further compound the country’s jobless crisis.
ActionSA’s director of policy, Johann Crige, said the country’s greylisting as one of the world’s most corrupt and money laundering-prone countries came as no surprise as the country had slowly been edging towards economic instability due to increased incidents of illicit financial flows and acts of criminality and terrorism.
“While we are disappointed by the decision, it comes as no surprise. It has been abundantly clear since the publication of the FATF’s mutual evaluation report in 2021 that greylisting has been the most likely outcome for South Africa,” Crige said.
Crige added that there had been enough warnings to the government about illicit financial flows in the country, yet the government had not acted on the issues raised.
“Despite ample warning, our government failed, yet again, to act in the best interests of South Africans.
“The General Laws Amendment Bill on Anti-Money Laundering and Combating Terrorism Financing was introduced too late, and the reforms recommended by the FATF report were not implemented with sufficient urgency.
“Unfortunately, we are all too aware that any efforts to combat illicit financial flows would be met with severe resistance by the ANC and its deployments that have captured our state institutions, as this would be in direct conflict with the ANC’s corrupt activities,” Crige added.
The ANC said it was concerned that South Africa was grey-listed on Friday. The ruling party also urged the government to put in place measures to prevent illicit money flows into the country. “The decision is based on the assessment by the FATF that South Africa has eight areas of strategic deficiencies related to the effective implementation of our anti-money laundering and combating the financing of terrorism laws that still require attention,” the party said.
Crige said the greylisting would also affect businesses, which will have to contend with a decrease in the country’s economic growth.
“Due to South Africa’s greylisting, South African businesses will face even more barriers to growth as the cost of doing business internationally is set to increase.
“If estimations made by analysts are correct, South Africa’s economic growth may slow down by an additional 1 to 3% per year – something we can ill afford in the midst of the various other ANC-led crises South Africa finds itself in,” Crige said.
South Africa’s National Treasury said on Friday that it expected increased monitoring by the FATF to have a limited impact on financial stability and costs of doing business with South Africa.
The Treasury further said that the costs of increased monitoring will be lower than the long-term costs of allowing the economy to be contaminated by proceeds of crime and corruption.
The South African Reserve Bank (SARB), meanwhile, said it acknowledges the decision made by the FATF to add the country to the list of jurisdictions currently under increased monitoring.
“Going forward, SARB will further strengthen supervision and enhance the dissuasiveness and proportionality of administrative sanctions issued,” the Reserve Bank stated.
Attempts to get a comment from the Presidency were unsuccessful at the time of going to print last night.
The Star