Greylisting POV

In February 2023, South Africa became only the second G20 country to be Greylisted by the Financial Action Task Force (FATF). The practical implication of this decision needs to be considered at two levels.

We should all be aware of the potential macroeconomic implications – although we as a country will largely be takers of the implications. Considering some of the factors, it’s clear that the overarching sentiment is negative. The International Monetary Fund estimates that on average, the capital inflows reduce by over 7.5% in countries once they are greylisted. Immediately following South Africa’s greylisting, the Rand weakened. Nigeria, who were greylisted at the same time, have seen financial direct investment fall to record lows.

The more important discussion is in respect of Government’s reaction to the greylisting and the steps they are taking to undo South Africa's greylisting over time. A critical action already taken is the December amendment to the Financial Intelligence Centre Act (FICA), which significantly expanded the categories of organisations who have to comply with FICA as Accountable Insitutitons (AIs).

In short, a comprehensive review of the business is required and then a prioritised action plan should be put in place where controls are not sufficient. The review, along with the action plan, will enable organisations to respond to the FIC comprehensively and will also demonstrate the organisations willingness to reach compliance over time

Should you require assistance with the execution of a risk assessment to understand your FICA obligations and develop a plan on how to meet any new obligations, we can assist you with conducting a comprehensive risk assessment to provide a view of the level of ML/TF/PF risk, advise on utilising the assessment report for the completion of the FIC questions and develop a roadmap for the implementation of the necessary actions to mitigate the noncompliance risks going forward.

How Deloitte can help

Deloitte assists clients in developing and implementing their FinCrime prevention strategy. Our solutions include:

• Advisory

• KYC-as-a-service (managed service)

• Remediation

• AML programme optimisation

• AML analytics

• Digitisation
 
 Deloitte has a global team in over 150 countries, and over 10,000 professional