International financial crime watchdog the Financial Action Task Force (FATF) on Friday added South Africa to its “grey list” of countries under special scrutiny to implement standards to prevent money laundering and terrorism financing, Reuters reports
Being added to the list is a reputational setback for Africa’s most advanced economy, which has been trying to address shortcomings identified by the FATF.
The rand extended losses against the dollar after the watchdog’s decision, to trade down about 1.3% on the day.
Analysts say increased FATF monitoring could mean South African clients at international financial institutions will be subject to enhanced due diligence checks.
South Africa’s central bank and National Treasury said in separate statements that they noted the watchdog’s decision and would work to address its concerns.
The Treasury said it expected a limited impact from the grey-listing on financial stability and the costs of doing business with South Africa.
