South Africa Must Reform Casino Regulations to Exit FATF Grey List

South Africa is making a concerted effort to exit the Financial Action Task Force (FATF) grey list, targeting full compliance by mid-2025. Although the country has strengthened its anti-money laundering (AML) and counter-terrorist financing (CTF) policies since the FATF’s original 2021 evaluation and the subsequent follow-up report in 2023, issues like casino licensing and regulation still prevent full compliance.

The Nation Has Made Significant Advances

The FATFs most recent review praised the steps taken by South Africa to implement better AML and CTF policies. Since the 2021 review, South Africa has made considerable adjustments, reporting progress to FATF and the FATF Africa Joint Group. South Africa’s National Treasury revealed that the nation can expect an onsite evaluation by the FATF Africa Joint Group as early as May 2025, provided it addresses the remaining recommendations.

“South Africa has taken steps towards improving its AML/CFT regime, ensuring the effective implementation of targeted financial sanctions.”

FATF statement

A positive assessment could mean removal from the FATF grey list by June 2025. However, failure to meet the FATF’s criteria in the next reporting cycle could mean South Africa’s grey list status will extend to at least October 2025. However, such a development could have significant financial repercussions for the nation and hurt local businesses.

The grey list status substantially affects the financial ecosystem in South Africa. Banks and financial institutions face additional scrutiny on transactions, and this heightened surveillance often leads to slower transaction processing times. Such scrutiny can disproportionately affect industries like gambling, which rely on frequent high-value deposits and withdrawals. 

Several Underlying Issues Remain

One of the more pressing unresolved FATF recommendations involves tightening the timeframe for reporting suspicious transactions. Under current regulations, authorities mandate a 15-day reporting timeframe for suspicious transactions. According to the FATF, such a long period is overly lenient, possibly weakening the effectiveness and speed of potential AML action.

Casino regulation and licensing remain another significant concern. Inconsistent AML requirements across South Africa’s provinces make casinos, which deal in large cash transactions and often provide anonymity, highly susceptible to money laundering.  In some provinces, licensing requirements mandate rigorous checks and stricter financial reporting, while others have less stringent rules.

The FATF recently modified some of its grey list criteria, relaxing requirements for countries to return to compliance. This decision gives South Africa a golden opportunity, provided it implements decisive reforms. The sooner the nation addresses FATF’s remaining recommendations, the faster it can exit the grey list and restore confidence and stability to its financial sector.