South Africa has been greylisted by the Financial Action Task Force (FATF), an intergovernmental body that sets global standards to combat money laundering and terrorist financing.
The move puts South Africa in the company of countries such as Syria, Haiti, Yemen and Mozambique. The watchdog’s decision signals to global banks, financial institutions and investors that the country is not fully compliant with anti-money laundering and terrorist financing standards.
The FAFT took the decision during a meeting this week in Paris. In a statement on Friday afternoon, the group said that Nigeria and South Africa have been added to the grey list. It said that in recent months, South Africa has made significant progress on many of its recommended actions to improve its system.
Greylisting is expected to hike the cost of doing business in South Africa by increasing the amount of due diligence companies have to carry out. Greylisting has also historically also led to a decline in foreign investment