The Financial Action Task Force put the country on the watchlist over a week ago for not meeting the global standards for combatting financial crimes.

According to Jacaranda News, the group said South Africa will be subjected to increased monitoring while the country addresses identified deficiencies.

The DA wrote to the Speaker of the National Assembly asking for an urgent debate on the steps that need to be taken to get us off the list.

It says the request has been granted but a date's yet to be decided.

The party's Shadow Minister of Finance, Dion George, said being on the grey list means the world will see South African companies as high-risk.

"We are pleased to note that the Speaker of the National Assembly has acceded to the request for an urgent debate. Being greylisted has placed our nation at significant risk, as the rest of the world now views South African companies and individuals as high-risk counterparties in global transactions.

“This development is entirely unacceptable, and it is incumbent upon our government to take immediate action to rectify this untenable position."

"The South African government continues to bring the South African business sector and its citizens to its knees. Firstly, it was the government’s bungling over electricity and complicity in the criminal deconstruction of Eskom. Now, by sitting on its hands when it comes to economic crime," said the DA's Shadow Minister of Finance, Dion George. 

"To make matters worse, President Ramaphosa does not seem to understand the magnitude of this catastrophe by commenting that the 'situation is concerning but less dire than some people suggest'. Ramaphosa added 'It is noteworthy that the strategic deficiencies identified by the FATF do not relate directly to the country’s financial sector. This means that financial stability and costs of doing business with South Africa will not be seriously impacted by the greylisting.' It is clear that the President is so far removed from reality."

"The greylisting of South Africa by the (FATF) is a damning indictment of our criminal justice system and the government’s inability to combat financial crimes such as money laundering and terrorism financing. This situation has arisen primarily due to the inadequacy of our legal framework and the failure of the authorities to prosecute those responsible for such offenses.

"This will have significant implications for South Africa’s economy, ranging from less than 1% to 3% reduction in GDP, depending on how quickly we can exit the greylist. Additionally, our reputation will suffer from the negative publicity from the greylisting. This will affect South Africa’s international relationships in many ways, ultimately resulting in a reduced appetite for business relationships with South African associates. The immediate effect of the greylisting is that South African clients will be subject to enhanced due diligence which will increase the costs of doing business for South African companies and individuals trading internationally or holding bank accounts or investment accounts abroad.

"Government must commit to rebuilding institutional capacity, processes, and systems in key parts of the supervisory, investigation, and prosecution services. The DA is committed to restoring the integrity of our financial system and strengthening our position as a respected global player. 

In his weekly letter, Ramaphosa said South Africa’s greylisting is an opportunity to strengthen the fight against financial crimes:

"Dear Fellow South African,

Last week, South Africa was put on a ‘grey list’ by the Financial Action Task Force (FATF) for falling short of certain international standards for the combating of money laundering and other serious financial crimes.

The FATF is a global body that aims to tackle global money laundering and terrorist financing. South Africa has been a member of FATF for the last 20 years due to our commitment to fight these criminal activities both at home and across the world.

The listing of South Africa as a ‘jurisdiction under increased monitoring’ – commonly known as greylisting – has caused much concern about the state of our financial institutions, law enforcement agencies and investment environment. The situation is concerning but less dire than some people suggest.

We have gone through a rigorous process of addressing the issues that FATF has raised with us. The fundamentals are in place and we know what we need to do to get off the grey list. We are determined to do this as quickly as possible. This is important not only for our international standing but also for our own ability to fight these crimes in our country.

Since the dawn of democracy in 1994, we have sought to build credible, independent institutions and implement effective laws to deal with complex financial crimes of this nature.

We have also forged collaborative relationships with transnational entities and global bodies in the financial sector, including the FATF and Interpol. During South Africa’s last regular mutual evaluation of its measures to combat money laundering and the financing of terrorism, a number of deficiencies were identified.

The mutual evaluation was conducted in 2019 when the country was emerging from the state capture era, which had a particularly detrimental impact on institutions like the South African Revenue Service (SARS), National Prosecuting Authority (NPA) and the Hawks.

Since the results of the mutual evaluation were published in 2021, we have made great progress in addressing the identified shortcomings. Of the 67 recommended actions emanating from the mutual evaluation, we have successfully addressed all but eight strategic deficiencies.

For example, we have addressed significant weaknesses in our legal framework, through the enactment of amendments to laws on anti-money laundering and combating terrorism financing.

When it comes to developing world-class expertise, legislative reform and strengthening state institutions to combat complex financial crime, we have come a long way. This is notwithstanding deliberate attempts to erode the state’s ability to detect, investigate and prosecute such crimes during the state capture era.

We have restored credibility to key institutions like SARS and the NPA to enable them to fulfil their respective mandates. We have bolstered the powers of the Special Investigating Unit (SIU) by establishing a Special Tribunal to recover public funds stolen through corruption and fraud, and an Investigative Directorate in the NPA to investigate serious corruption.

Last week, the Minister of Finance, Enoch Godongwana, announced in the Budget that additional funds will be allocated to the police, NPA, SIU and Financial Intelligence Centre (FIC) to strengthen the fight against crime and corruption.

One of our most effective tools for combating money laundering and other financial crimes is the multidisciplinary Fusion Centre we established in 2020. The Fusion Centre brings together bodies like the NPA, SIU, SARS, the Hawks, Crime Intelligence, State Security Agency, and the FIC. Since its inception, the work of the Fusion Centre has led to the preservation and recovery of approximately R1.75 billion in criminal assets.

It is noteworthy that the strategic deficiencies identified by the FATF do not relate directly to the country’s financial sector. This means that financial stability and costs of doing business with South Africa will not be seriously impacted by the greylisting.

Partnerships between the government and the financial sector have played a valuable role in efforts to address serious economic crimes. The South Africa Anti-Money Laundering Integrated Task Force was set up in 2019 as a partnership between the banking sector and government regulatory authorities. Between the beginning of 2020 and the end of March 2022, successful interventions by the Task Force led to the preservation of criminal assets worth R86 million.

Like all countries, we are dealing with the shifting sands of globalised crime and criminal syndicates. The challenge facing authorities is to anticipate criminal innovation and respond swiftly and effectively.

As a country, we welcome the intensified monitoring by FATF. We have a focused action plan in place to address the remaining deficiencies identified by the FATF. Most of these deficiencies are related to the implementation of our laws. For example, we need to be able to demonstrate, among other things, an increase in the investigation and prosecution of serious and complex money laundering and terrorism financing, an increase in mutual legal assistance requests to other countries, an increase in the use of financial intelligence by law enforcement agencies, and the effective implementation of targeted financial sanctions.

Our action plan to address these deficiencies is aligned with the work we are doing to implement the recommendations of the State Capture Commission as outlined in our submission to Parliament in October last year.

As a country that both values and enforces the rule of law, the greylisting is an opportunity for us to tighten our controls and improve our response to organised crime.  This will ultimately place us on a stronger footing to effectively fight these damaging and dangerous crimes."

The date of the urgent debate is yet to be communicated and will be finalised by the programming structures of Parliament, where the DA will continue to put pressure for this debate to take place as a matter of urgency.

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