Johannesburg (Brussels Morning Newspaper) October 28, 2026 – South Africa faces a significant risk of returning to the Financial Action Task Force (FATF) grey list barely a year after securing its removal. According to the latest quarterly assessment by business lobby group Business Leadership South Africa (BLSA), persisting weaknesses in law enforcement, investigations, and prosecutions threaten the country’s standing. The development comes as the nation prepares for a new mutual evaluation and peer review by the global financial crime watchdog.
Background on the Financial Action Task Force Monitoring
The Financial Action Task Force grey list designates jurisdictions under increased monitoring due to identified deficiencies in combating money laundering and terrorist financing. South Africa was initially placed on the list in February 2023 following criticisms of its regulatory and criminal justice frameworks. To secure removal in October 2025, the country implemented a series of legislative and structural reforms, addressing 22 specific action items mandated by the global watchdog.
These reforms included amendments to the Financial Intelligence Centre Act (FIC Act) to regulate crypto-asset service providers and high-value goods dealers, alongside updates to the Companies Act launching a beneficial ownership register via the Companies and Intellectual Property Commission (CIPC). Additional measures involved enhanced funding and operational backing for the National Prosecuting Authority and the Directorate for Priority Crime Investigation (known as the Hawks).
New Mutual Evaluation and Upcoming Peer Review Timeline
South Africa is currently undergoing a new mutual evaluation cycle administered by the FATF. A formal peer review is scheduled for the first quarter of 2027, with the comprehensive assessment continuing through October of that year.
This evaluation will examine whether the country has successfully sustained and expanded the increases in investigations and prosecutions of complex financial networks that originally facilitated its exit from monitoring. Business Leadership South Africa noted that any stagnation or decline in these metrics could negatively impact the upcoming evaluation.
Law Enforcement Shortcomings and Institutional Findings
Concerns regarding South Africa’s compliance preparedness have been compounded by institutional findings within state security and investigative agencies. The state-appointed Madlanga inquiry into alleged corruption and institutional interference has highlighted leadership failings within both the police and intelligence services.
BLSA emphasized that ongoing vulnerabilities in the criminal justice architecture remain a primary source of vulnerability. Specifically, weaknesses in investigating organized crime, securing successful convictions, and recovering criminal assets continue to pose risks that could count against South Africa during the evaluation.
Industry Response and Reform Tracker Progress
Despite the warnings concerning the international watchdog review, BLSA’s broader structural reform tracker recorded its highest score since monitoring began in March 2024. The overall completion index for tracked economic and governance reforms rose to 72.5, up from 71.3 in the previous quarter.
However, BLSA Chief Executive Officer Busi Mavuso stressed that the country cannot afford institutional complacency.
“We cannot afford to become complacent, particularly when the weaknesses in our criminal justice institutions, investigations, prosecutions, remain unresolved,”
Ms. Mavuso stated in the quarterly report. Business organizations and financial sector stakeholders continue to urge accelerated cooperation across judicial and regulatory bodies to preserve the financial standing achieved in late 2025.
