You can also listen to this podcast on iono.fm here.
ADVERTISEMENT
CONTINUE READING BELOW
Download the free LiSTN audio app on Google Play, Apple or here.
JIMMY MOYAHA: For those who don’t remember, we were placed on a grey list, a very, very bad naughty list at some point for some things that we needed to sort out. Hopefully, we are on the right track to coming off that list because nobody wants to be on it. It doesn’t look good for the country, and it doesn’t look good for trying to attract investment.
I’m joined on the line by the former deputy director-general of National Treasury, Ismail Momoniat, to chat about the latest updates around that. We’ve got those updates from the Financial Action Task Force, the FATF, around where we stand and what it is we are going to need to do to get off that grey or naughty list. Good evening, Ismail. Thanks so much for taking the time. Where do we stand on that greylisting?
ISMAIL MOMONIAT: Good evening, and hi to your listeners. Look, what we released yesterday is just to show progress. Remember, we were greylisted in February, and we still have a lot of hard slog [ahead]. So I don’t want to give the wrong impression, but we are making good progress.
What we were showing yesterday was that, when you look at greylisting, there are two aspects to it. The one aspect is technical compliance, and that really refers to the legal framework that we have on anti-money laundering and countering terror financing. On that score, we’ve done really well. [FATF had] 40 recommendations of standards, and we had passed 20 when they did a mutual evaluation, the assessment in the report in 2021 – but we were deficient in the other half, 20.
Read: SA sees progress in effort to get off dirty-money list
What we’ve done now is that on 15 of them, we’ve either got compliant and one is non-applicable. So that leaves us with only five to go, and we anticipate that we do this by October next year, which is the earliest we can go back for the re-rating. So on that score I think we are making good and solid progress.
The greylisting, however, involves also measuring our effectiveness capability. In other words, are we implementing the laws that we have? That’s where we have hard challenges. We’ve agreed on an action plan with FATF, where there were 22 steps and a lot of these expire at different times, with the last one expiring in January 2025. On those, we’ve made some positive progress. We’ve certainly got two of them out of the way, so we are left with 20. But on the others it’s going to be a slog. We’ve kind of got positive endorsement, but we are still far from having them seen to be largely addressed or fully addressed.
JIMMY MOYAHA: Ismail, you mentioned these 22 actionable items. I noted that there is one that has an expiry of January 2024, which is a couple of months away – if not just after December. Are we making progress there? I mention it only because it is the most immediate from the Treasury…
ISMAIL MOMONIAT: That one may be done. We are fine on that one. We met that at the first possible instance that we could.
JIMMY MOYAHA: Okay, fantastic. Let’s look at the technical compliance of it. You did mention that of course we’ve gone from 20 out of 40 to 35 out of 40, and in the report or in the media release, both by National Treasury as well as by the FATF separately, there was note that there were certain actions that we’ve been partially compliant with since 2021. And those have obviously been the difficult ones that you mentioned around some of them being harder to address than others.
What is being done about these, and are we confident that we’re going to be able to tackle them in time to come off that grey list as soon as possible?
Read: South Africa eyes exiting FATF grey list in 2025
ISMAIL MOMONIAT: That’s how I’ve differentiated. The technical compliance is the easy bit. Those 22 items, of which there are 20 left, are what are called ‘effectiveness measures’ that we have to deal with to get off the grey list.
Even if you do very well on the technical compliance, you won’t get off the grey list just by doing that.
ADVERTISEMENT
CONTINUE READING BELOW
But in any case there are five left. We will meet those next October when it’s the first time we get caught up to look at what we’ve done. And in fact, we’ve done quite well even on the five outstanding ones. We’ve made progress. It’s just that perhaps by that deadline they wanted us to do a bit more.
It’s on those 20 action items that we really, really need to do a lot more. For example, that involves many players. It involves your regulators who deal with anti-money laundering, whether it’s of estate agents or the legal practices, or casinos and so on. Those are going to be the one set of things.
Read: The route to exiting South Africa’s greylisting
The second set of things relates to the criminal justice system – the number of investigations, prosecutions and asset forfeitures that we can demonstrate.
And the third set relates to what’s called countering terror financing, to what extent we identify such actions. We actually also have prosecution investigations, and prosecutions and so on related to that. So those are the more difficult ones that we have to reach.
JIMMY MOYAHA: Ismail, there were some things that were obviously left out of the Financial Action Task Force’s follow-up report. They didn’t address things that we have been working on in terms of those effectiveness deficiencies that you highlighted earlier. Can you just shed some light on that, the things that the FATF may not have put in their report, but that we know we’ve been able to work on?
ISMAIL MOMONIAT: Look, I don’t think that matters too much. The point is it’s what we say to the FATF – and those are very specific areas that we have to act on, and our acting on those. Let me say, when we act on those, it’s really for the benefit of the country because if you have more criminal investigations that lead to prosecutions, that’s clearly a positive for us when we fight corruption, when we fight money laundering and so on.
Similarly, you don’t want South Africa to be used as a base for acts of terror in other countries and so on. So those are things that all countries are expected to do, and I think now we are focusing on building our capability to do that.
Remember, we were under the period of state capture. It really destroyed a lot of capabilities. I think, although it’s taking us long, we need all our agencies now to be on top of their game and doing what they have to do and doing it quicker.
JIMMY MOYAHA: Absolutely. Implementation is necessary if we are to succeed and we all need to work together for this.
Thanks so much, Ismail. That was IsmaiI Momoniat, the former deputy director-general at National Treasury, giving us a sense of the latest updates on South Africa’s efforts to get off the grey list that we are placed on by the Financial Action Task Force.
Read:
Legislation to prevent state capture on its way
SA could miss 2025 grey list exit, says incoming FirstRand CEO
