South Africa will be added to a global watchdog’s list of nations that have failed to adequately tackle illicit financial flows, the head of the nation’s tax agency said.
The Financial Action Task Force, which polices compliance with anti-money laundering and terror-financing measures, is expected to give its decision on Friday whether to include South Africa on its so-called grey list.
That’s after an evaluation carried out in 2019 following an era of endemic state corruption found Africa’s most-industrialized economy lacking in all 11 of its effectiveness measures to combat dirty-money flows.
“It is a very rule-driven system which means if you have any outstanding actions then you go onto the grey list, or what they call the observation list,” South African Revenue Service Commissioner Edward Kieswetter said in an online panel discussion hosted by PwC on Friday.
“We started with well over 130 outstanding actions, we are in low double digits now, so we’ve done remarkably well in terms of strengthening the system and I think that will begin to gain momentum.”
Being added to the list may have far-reaching consequences for South Africa’s financial system, cause the country reputational damage and possibly lead to capital and currency outflows, the central bank said in May.