South Africa prepares to leave the FATF increased‑monitoring list

The real story about South Africa’s likely removal from the Financial Action Task Force(FATF) grey list is not the expected announcement. It’s in the opportunity.

At first blush, SMEs might wonder how grey listing has impacted their business. Direct capital inflow has not completely stopped since the February 2023 FATF greylisting, but it has been severely disrupted.The most dramatic impact has been on portfolio investments, which swung from R33.4 billion in inflows in quarter four 2024 to an outflow of R53.7 billion in quarter one 2025 - a net negative swing of R87.1 billion in a single quarter. This aligns with International Monetary Fund research showing that greylisted countries typically lose 7.6% of gross domestic product in capital flows, with portfolio investments declining by 2.9% of GDP on average.

However, in navigating this capital-constrained environment, many companies have built new compliance muscle: better ownership records, cleaner cross-border payment data, clearer reporting with banks and counterparties. That discipline didn’t just keep the regulator calm. It made South African businesses faster, more competitive.

For businesses with global ambitions, the delisting should serve as a mandate to compete more vigorously, rather than a licence to relax compliance efforts. The G7’s Financial Action Task Force (FATF) was established in 1989 to protect the international financial system from international money laundering and terror financing. When South Africa fell afoul of FATF standards and was placed on the organisation’s “greylist” in 2023, the decision had an immediate impact on our country’s attractiveness as aglobal investment destination.The grey listing came with an Action Plan, which National Treasury, the Directorate for Priority Crime Investigation (DPCI) of the South African Police Service, the State Security Agency, and the National Prosecuting Authority (NPA) have worked hard to comply with.

After its July on-site visit, to validate that South Africa has completed all 22 action items in the Action Plan, the FATF is expected to remove South Africa from the list at its next plenary in Paris, which concludes on 24 October. Following the visit, National Treasury issued a statement in which Deputy Minister ofFinance Dr David Masondo and Deputy Minister of Justice and Constitutional Development Mr Andries Nel assured the FATF Africa Joint Group that the South African Government “will continue actively partnering with the FATF Global network in preserving and advancing the integrity of the South African and global financial systems”.

Back in the game

South Africa stands on the brink of leaving the FATF “increased monitoring” grey list — a club that includes Algeria, Bulgaria, Cameroon, Lebanon, Nigeria, Haiti, and Yemen. In working to have ourselves removed from this list, South African treasury and local businesses have ensured that we meet FATF’s antimoney laundering and counter terrorism financing standards. We’ve tightened our financial protocols to global levels, closing gaps, reducing exceptions, and speeding up processes.

But don’t expect banks to throw open their doors the day after we are removed from the greylist. Trust takes time. Lenders and partners will look for sustained proof — clean ownership records and flawless payment files over many months. Confidence comes from consistent evidence, not celebratory headlines. Because of this, the sharpest CFOs aren’t asking where to cut their compliance burden. This is an opportunity to appreciate what has been built over the past few years, and to sell that as an advantage.

With direct capital inflow into South Africa having been heavily impacted since the greylisting, this is our chance to get back in the game. But any company looking to expand beyond South Africa’s borders must demonstrate its commitment to international standards of ethics and compliance.

In Request for Proposals and investor decks, savvy CFOs will show that their beneficial ownership records are now constantly updated, that payment errors are caught before they leave the building; and that improvement is ongoing. In doing so, they’re not “over-complying.” They’re de-risking their business partners.Strategically savvy businesses will look to incorporate compliance requirements into their workflows. Professional services firms with an eye on the global environment will be able to advise on how to do that – and deploy the technology to make it possible.

Indeed, we sense an appetite for change in the market – a hunger for outcomes-based systems that ensure the highest financial standards, streamline processes and enhance efficiencies.

Comply to win

Since official grey listing in February 2023, South Africa has taken the action plan seriously,conscientiously addressing AML and Countering the Finance of Terrorism (CFT) conditions.We were deemed to have reached “substantial completion” in June 2025.

Globally, cross-border data completeness requirements have become even tighter under the recent the FATF Recommendation 16 update. Fortunately for South African businesses, the protocols we have built over the past two years leave us well equipped to compete in this global environment. New compliance costs have already been factored in. Smart companies will lock in these gains; make them visible. And then turn discipline into speed where it counts: onboarding, payments, due diligence and deal execution.

South Africa has a chance to position itself as a socially responsible investment destination.That tone is set from the top. Leaders must embrace compliance. Failure to do so will undermine competitiveness and become a real business risk.We have done the hard yards to get to this moment. We should treat delisting as validation,not permission to take our foot off the pedal. We need to keep the muscle; show it to the market; and use it to win.

Moore Infinity CEO Leonard Roberts

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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