Finance Minister Enoch Godongwana has cautioned South Africans to be prepared for possible greylisting due to the country’s shortcomings to address money laundering.
Delivering the 2023 national budget in Parliament on Wednesday, Godongwana says the government has made substantial progress to address weaknesses in dealing with the financing of terrorism.
The Financial Action Task Force which South Africa is a member is expected to announce its decision on whether it will be greylisted or not.
“We recognise the need to be more effective in implementing our laws, particularly in fighting organised and sophisticated crimes. Addressing the FATF issues is part of the broader fight against corruption, crime, state capture and the deliberate weakening of the institutions of law and order in our country. The FATF Plenary will make its decision later this week on whether or not to put South Africa under increased monitoring, otherwise known as greylisting. We should be prepared for that possibility.”
Minister Enoch Godongwana’s speech:
Director General at National Treasury Ismail Momoniat says the FATF will make its decision at the end of this week. Areas of concern raised by the global financial watchdog include the local banks’ effectiveness in reporting suspicious transactions, government’s ability to demonstrate improvement in the laws and the court’s ability to arrest corruption and money laundering.
Thus far, two laws have been enacted to address the technical deficiencies identified by the FATF. Momoniat says the country should be prepared for the possibility of being greylisted.
“Firstly FTAF doesn’t want us to talk until they’ve made the announcement, which they will on Friday evening. Having said that I think we are prepared for all eventualities. I think if we look at what will happen if we were to be greylisted, for example, is to what extent have we made progress. I think we’ve made phenomenal progress in the last year and a half. I think when a county is seen to be taking actual steps, it is just a matter of time before to complete those steps. I think we can reduce the impact if there were to be an adverse outcome.”