South Africa Country Summary

FATF Status

South Africa is on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement - 21 February 2025

Since February 2023, when South Africa made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, South Africa has taken steps towards improving its AML/CFT regime including by demonstrating that all supervisors apply effective, proportionate, and effective sanctions, ensuring competent authorities have timely access to accurate and up to date BO information on legal persons and arrangements and applying sanctions for breaches of violation by legal persons to beneficial ownership obligations. South Africa should continue to work on implementing its action plan to address its remaining strategic deficiency on demonstrating a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF activities in line with its risk profile.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in South Africa was undertaken in 2024. According to that Evaluation, South Africa was deemed Compliant for 5 and Largely Compliant for 32 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

South Africa has a strong anti-corruption framework, yet enforcement is weak, and public sector accountability is low, with whistleblowers facing risks. Corruption, particularly in public procurement, is seen as a significant barrier to investment, exacerbated by the legacy of systemic corruption during former President Jacob Zuma's administration. Despite initiatives like the establishment of the Office on Counter Corruption and Security Services and various judicial commissions, challenges remain in effectively addressing corruption and related criminal activities.

South Africa has the most advanced economy in sub-Saharan Africa, characterized by a mature financial sector and deep capital markets that attract regional investment. However, the country faces significant challenges, including a stagnated economy due to corruption and mismanagement, ongoing energy crises, and high unemployment rates, which have hindered its economic recovery and growth.

South Africa's investment climate is characterized by stable institutions, a mature financial sector, and a robust legal framework that supports foreign investment. However, challenges such as corruption, policy uncertainty, and infrastructure issues, particularly related to energy supply, pose significant risks to potential investors. Despite these challenges, South Africa remains an attractive hub for regional investment, bolstered by its well-regulated capital markets and strategic position in Southern Africa.