On 24 October 2025, the Financial Action Task Force (“FATF”) removed South Africa from its “grey list” of countries under increased monitoring for deficiencies in combating money laundering and terrorist financing.
The delisting represents a significant progress made by the South African authorities over the past two years to strengthen their systems to combat money laundering and terrorist financing, including key legislative reforms.
Understanding the Grey Listing and its implications
South Africa was placed on the FATF grey list in February 2023 after the FATF identified 22 shortcomings in the country’s anti-money laundering and counter-terrorist financing (AML/CFT) framework.
This has had significant adverse effects on South Africa’s economy, including reputational damage undermining investor confidence, increased borrowing costs for businesses and the government, reduced foreign direct investment, and complicated cross-border transactions due to heightened due diligence requirements.
South Africans with structures or investments in offshore jurisdictions faced several notable effects, particularly during periods of increased financial scrutiny. Financial institutions, both locally and abroad, were required to implement enhanced due diligence measures, stricter anti-money laundering (AML) checks, and tighter monitoring of cross-border transactions for South African clients, resulting to higher compliance costs, longer transaction times and additional documentation requirements.
A Positive Outlook
The FATF delisting is expected to bring a cascade of positive economic effects. Investors, both domestic and international, can now operate with greater assurance of regulatory alignment and financial integrity. Cross-border transactions will face fewer barriers, allowing trade and investment flows to move more smoothly.
For South Africans holding offshore structures or investments, the FATF delisting is a significant boost. With South Africa back in good standing, financial institutions in Mauritius and other trusted jurisdictions can apply standard due diligence procedures, which means faster approvals, smoother cross-border transactions, and reduced administrative burdens. This allows South African investors to focus more on growing and managing their wealth rather than navigating complex compliance processes.
This achievement not only restores South Africa’s credibility within the global financial system but also unlocks tangible benefits for investors, financial institutions, and businesses with cross-border exposures.