SA hoping to avoid Grey List storm clouds

South Africa’s recovery from the hangover of state capture is a challenge and could filter into international monetary exchange, with the possibility that the country may be placed under jurisdictional monitoring on the international market. Known as the grey list and implemented by the Financial Action Task Force (FATF), this additional monitoring may not prevent all transactions, but the processes could be more onerous. FATF is “an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction”. 

Finance Minister Enoch Godongwana has said that it is critical for the country to bolster its financial legislation and change its laws to enable it to combat terror finance, corruption and money laundering and steer clear of the grey list that may be coming its way. Not only is the Minister consulting with stakeholders but has already put potential legislative changes in place.

Currently the government is amending two pieces of legislation to fight financial crimes. 

It does not need to be forever

If South Africa’s current changes are not implemented to the FATF’s standards in time – the deadline of February 2023 is creeping up – then it may take the country about three years to get back into the international markets’ good financial graces. Grey listed countries need to work closely with the FAFT to be able to reverse such a status and be taken off the grey list.

SA would be joining Pakistan, Syria, Turkey, Myanmar, Philippines, South Sudan, Uganda, and Yemen who are all currently under the watchful eye of the FATF.  But exiting the grey list is not impossible, Botswana, Zimbabwe and Mauritius have all managed to do so. 

How could this affect you?

If the outcome is the unfavourable grey list option, then business can still continue, but the restrictions and client check procedures will be vigorous. Navigating the new sets of regulatory processes for foreign currency payments will bring an additional layer to the process and uncertainty in these volatile market conditions. 

At Currency Partners we are able to simplify the process, give you access to our preferential pricing terms and give you more control over the timing of your transfers so you can save money with our exchange rates.

Choose Currency Partners for your foreign currency transfers and benefit from our Private Client solutions.

To speak to an expert in our specialist Private Clients team, email enquiries@currencypartners.co.za or call us on +27 21 203 0081.