By PAUL O’DONOGHUE, Senior Correspondent
THE FATF (Financial Action Task Force) has removed South Africa, Mozambique, Nigeria and Burkina Faso from its ‘grey list’ of jurisdictions with weak AML regimes.
No jurisdictions were added in the update, which came after the latest FATF plenary.
FATF President Elisa de Anda Madrazo said the result is a “positive story for the continent of Africa”.
Sub-Saharan Africa’s largest economies South Africa and Nigeria were added to the Financial Action Task Force (FATF) ‘grey list’ in 2023. Mozambique has been on there since 2022 and Burkina Faso since 2021.
The Paris-based FATF announced the four countries’ removal at the end of a plenary meeting.
Analysts say getting off the list could make it easier for capital to enter those countries and ease transaction delays.
The FATF said South Africa had ‘sharpened tools’ to detect money laundering and terrorist financing.
It also Nigeria had stronger inter-agency coordinatio and Mozambique had improved financial intelligence sharing. Regarding Burkina Faso, the FATF said it had enhanced oversight of financial institutions and gatekeepers.
Grey list impact
Getting off the list could make it easier for capital to enter the four countries, analysts say. It could also benefit companies and households in those countries by lowering funding costs.
The International Monetary Fund has estimated that being on the list reduces foreign capital inflows by approximately 7.6% of gross domestic product.
“Corporates and individuals will face less friction in cross-border payments once key jurisdictions mirror the FATF decision,” said Vincent Gaudel, a financial crime compliance expert at LexisNexis Risk Solutions. “Banks will expand correspondent services, and trade-finance operations will run more smoothly.”
For South Africa, “the delisting provides a modest tailwind for sentiment and risk premia,” Bastian Teichgreeber, chief investment officer at Prescient Investment Management, said.
The South African and Nigerian economies picked up pace in the second quarter of this year. But growth is still well short of government targets in both nations.
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
