The Financial Action Task Force (FATF) has reported significant progress in South Africa’s action plan to strengthen its anti-money laundering (AML) and counter-terrorism financing (CTF) systems. The country was placed on the FATF’s greylist in February 2023, prompting reforms to address deficiencies in its financial crime controls.
In its latest assessment, the global watchdog acknowledged South Africa’s efforts to improve compliance, though challenges remain. The action plan focuses on enhancing regulatory oversight, improving risk assessments, and ensuring stricter enforcement of AML/CTF laws.
AI as a Key Tool in Fighting Financial Crime
During a discussion, Idrissa Diop, Compliance Director at the African Export-Import Bank (Afreximbank), emphasized the role of artificial intelligence (AI) in combating money laundering.
“Financial institutions and regulators should utilize artificial intelligence to improve control over money laundering risks and ensure compliance within the industry,” Diop said.
He highlighted the growing threat of trade-based money laundering (TBML) and stressed the need for robust compliance frameworks to secure trade transactions. Afreximbank, as a key trade financier in Africa, has prioritized compliance to mitigate risks and support legitimate trade across the continent.
Support for Greylisted Nations
With major economies like South Africa and Nigeria still on the FATF greylist, Diop explained that Afreximbank collaborates with financial institutions in these countries to strengthen compliance standards.
“Even though some nations are on the greylist, we work with banks that maintain strong compliance frameworks,” he said. “Our goal is to align with FATF recommendations and ensure that trade financing remains secure.”
South Africa’s removal from the greylist will depend on sustained progress, including tighter regulations and improved enforcement. Meanwhile, experts like Diop advocate for technological solutions, including AI, to enhance detection and prevention of financial crimes.
As the country continues its reforms, the financial sector remains watchful, hoping that further improvements will lead to South Africa’s exit from the greylist in the near future.
