South Africa and the FATF Grey List: What It Was, Why It Mattered, and What Changes Now

What is the FATF “grey list”?

The FATF is the global standard-setter for anti–money laundering and counter-terrorist financing (AML/CFT). Countries on the “jurisdictions under increased monitoring” list—often called the grey list—have strategic AML/CFT deficiencies but commit to a time-bound action plan with FATF oversight. It isn’t a sanction, but it typically triggers tighter checks by banks and investors.

Why was South Africa greylisted in 2023?

In February 2023 FATF placed South Africa under increased monitoring after a mutual evaluation found shortcomings, including beneficial-ownership transparency, risk-based supervision, and effectiveness of investigations and prosecutions. In late-2022 SA fast-tracked reforms—most notably the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act and amendments to POCDATARA (counter-terrorism) legislation—to address technical gaps.

How did South Africa get off the list in 2025?

Between 2023 and 2025 South Africa implemented FATF’s action plan, strengthening supervision of banks and non-bank financial institutions, improving access to beneficial-ownership information, and increasing the number of money-laundering and corruption cases investigated and pursued. In October 2025, FATF said South Africa was no longer subject to increased monitoring.

Independent reporting the same week noted improvements in enforcement outcomes (for example, more convictions tied to corruption and money-laundering compared with prior years), aligning with FATF’s decision.

The economics: costs, capital flows, and business impact

Why do markets care about the grey list? Because counterparties—overseas banks, investors, global platforms—often respond by increasing due diligence, which can slow cross-border payments and raise compliance costs. Empirical research cited by the Basel Institute (summarising an IMF study) finds that greylisting is associated with a decline in capital inflows of roughly 7–8% of GDP and ~10% of GDP the following year—illustrating the potential macro-level drag.

South African authorities have long argued that reforms would reduce these frictions. The delisting in October 2025 removes a reputational headwind; over time, that should ease onboarding with foreign counterparties and lower the probability of “de-risking” (relationship withdrawals) by international banks—though standard KYC/AML controls remain.

At-a-glance table

What it means for you

Consumers

Expect your bank’s KYC questions to remain—FATF delisting doesn’t undo global AML rules—but international card, remittance, and marketplace payments should face fewer “extra” checks over time as counterparties recalibrate their risk settings.

SMEs & exporters

The biggest win is reputational: onboarding with foreign banks, PSPs or marketplaces may become smoother, and some correspondence/settlement times may shorten as enhanced due-diligence flags are revised. Contractually, counterparties may still require AML attestations—but the baseline risk label is now improved.

Investors

Risk premia tied to greylisting should fade; the IMF-cited literature links delisting to improved capital flows compared to greylisted peers. Macro-effects are gradual and depend on broader fundamentals (growth, power supply, fiscal metrics), but one headwind has been removed.

Timeline

• Late 2022: Parliament passes the General Laws (AML/CTF) Amendment Act and POCDATARA amendments to close gaps flagged by FATF.
• Feb 2023: FATF places South Africa on the list of jurisdictions under increased monitoring (“grey list”). Action plan agreed.
• 2023–2025: South Africa implements the plan, strengthens supervision and enforcement; FATF follow-up reports record improved compliance, including on beneficial ownership (R.24).
• Oct 2025: FATF announces South Africa is no longer subject to increased monitoring (grey list exit).

FAQ

Does delisting mean fewer bank checks? Not really. Banks still apply global AML/CFT rules. The difference is that foreign counterparty banks are less likely to add extra checks just because the country is flagged.

Will this cut the cost of cross-border payments? Costs reflect many things (FX spreads, network fees, risk). Removing the grey-list stigma can help on the margin as relationships normalise.

What reforms mattered most? Bringing company registers and beneficial ownership rules up to FATF standards; beefing up supervision; and improving investigations and prosecutions so rules bite in practice.

Sources

• FATF — Jurisdictions under Increased Monitoring (24 Oct 2025).
• FATF — South Africa: Measures to fight money laundering & terrorist financing (follow-up status).
• National Treasury — Commencement of General Laws (AML/CTF) Amendment Act (Dec 2022); POCDATARA amendments.
• Basel Institute on Governance — How does FATF grey listing affect countries? (IMF research summary on capital flows).