By Kirsten Kern, Partner, Head of Financial Services Regulatory South Africa, and Kirsten Paulo, Senior Associate, Bowmans
South Africa has officially been removed from the ‘grey list’ of the Financial Action Task Force (FATF), following more than two years of rigorous regulatory reform. This follows the successful completion of all 22 action items in the FATF Action Plan, adopted by South Africa in February 2023.
South Africa’s National Treasury has hailed the delisting as a collective national effort and a significant milestone that strengthens global confidence in South Africa’s financial integrity, which is likely – in turn – to stimulate foreign investment.
Since its greylisting, South Africa has overhauled its anti-money laundering and counter-terrorism financing regime through far-reaching legislative, institutional and enforcement reforms. This included tightening supervisory and enforcement capacity across key agencies, improving access to beneficial ownership data, and enhancing inter-agency coordination and intelligence sharing.
For example, certain sections of the Companies Amendment Act, 2024 and the entire Companies Second Amendment Act, 2024 (Amendment Acts) became effective in December 2024, introducing several key measures, including the requirement for enhanced transparency. Companies must now disclose beneficial ownership information and provide clarity regarding the identities of individuals who own or control the company. Other amendments strengthen corporate governance, including extending the time period in which delinquent directors are held accountable, and increasing public access to company records.
Sections of the Amendment Acts not yet in force include those sections that deal with remuneration disclosures for public and private companies, access to private company financials, removal of the right of ‘accredited entities’ to perform dispute resolution functions in favour of using the Companies Tribunal, and obligations to publish where records are kept. Also still to be implemented are new M&A transaction thresholds that require Takeover Regulation Panel scrutiny.
South Africa’s National Treasury also published further proposed amendments to the Companies Act, 2008. in the recent draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024. The amendments include measures to increase the maximum penalty for administrative fines to ZAR10 million (up from ZAR1 million) and empower the Companies and Intellectual Property Commission (CIPC) to deregister non-compliant companies and impose fines.
The Financial Intelligence Centre has also reduced controlling ownership thresholds to counter sophisticated financial crime tactics. Other amendments include new provisions in the Financial Intelligence Centre Act for extraordinary expenses, interest accrual on prohibited accounts, reporting cash conveyance to/from South Africa, and addressing risks associated with new delivery mechanisms and technologies.
Expanded definitions of financial products and services were also added to the Financial Sector Regulation Act, 2017. in addition to new licensing powers, enhanced information-gathering powers for regulators, and exceptions for certain transactions under the Insolvency Act, 1936. The Non-Profit Organisations (NPO) Act, 1997 also introduced maximum penalties to enhance compliance.
To enable the National Prosecuting Authority (NPA) to address multi-jurisdictional offences, Corporate Alternative Dispute Resolution guidelines were implemented in 2024. These provide companies charged with corruption the opportunity to voluntarily disclose evidence and information, fully cooperate and pay financial remediation.
Established under the NPA Amendment Act, 2024, the Investigating Directorate Against Corruption (IDAC) is a specialised, independent unit dealing with high-level corruption cases with cross-border implications. The Twenty-First Amendment Bill further proposes a dedicated Anti-Corruption Commission to focus on grand corruption and high-level organised crime, complementing the NPA. Also effective in 2024, the Independent Police Investigative Directorate (IPID) Amendment Act, 2024 investigates and oversees the South African Police Service and the Municipal Police Services.
Although not yet in effect, the Public Procurement Act, 2024 (PPA) was signed into law in July 2024, with the aim of enhancing transparency and accountability in procurement processes and ensuring the independence of the procurement office from National Treasury.
Further, an updated South African Revenue Service Trust guide now also requires detailed reporting on trust beneficiaries to strengthen regulatory transparency.
Collectively, these measures reflect a shift from formal compliance to demonstrable effectiveness in detecting, deterring and disrupting financial crime.
To stay off the grey list, South Africa must continue to improve and stay updated with new FATF developments.
