South Africa prepares to leave the FATF increased-monitoring list

THE real story about South Africa's likely removal from the Financial Action Task Force(FATF) grey list is not the expected announcement. It's in the opportunity.

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At first blush, SMEs might wonder how grey listing has impacted their business. Direct capital inflow has not completely stopped since the February 2023 FATF greylisting, but it has been severely disrupted.

The most dramatic impact has been on portfolio investments, which swung from R33.4 billion in inflows in quarter four 2024 to an outflow of R53.7 billion in quarter one 2025 - a net negative swing of R87.1 billion in a single quarter.

This aligns with International Monetary Fund research showing that greylisted countries typically lose 7.6% of gross domestic product in capital flows, with portfolio investments declining by 2.9% of GDP on average.

However, in navigating this capital-constrained environment, many companies have built new compliance muscle: better ownership records, cleaner cross-border payment data, clearer reporting with banks and counterparties. That discipline didn't just keep the regulator calm. It made South African businesses faster, more competitive.

For businesses with global ambitions, the delisting should serve as a mandate to compete more vigorously, rather than a licence to relax compliance efforts. The G7's Financial Action Task Force (FATF) was established in 1989 to protect the international financial system from international money laundering and terror financing.