Tanzania and Mali exit the FATF’s ‘Grey List’ - will South Africa, Nigeria, and Mozambique be next?

The removal of Tanzania and Mali from the Financial Action Task Force (FATF)’s ‘grey list’ marks a positive step for both countries, will likely boost their global reputations and economies, and spotlights the pathway to follow for several other African nations which remain subject to increased FATF monitoring, including South Africa.

“Tanzania will sustain the progress achieved and continue working with both domestic and international stakeholders to combat money laundering, terrorism financing, and the financing of weapons of mass destruction,” said Tanzania’s Minister of Finance Mwigulu Nchemba on Sunday, following the joint FATF-MONEYVAL Plenary meeting hosted at the Council of Europe in Strasbourg late last week.

Nations subject to increased monitoring from the FATF due to their strategic deficiencies in addressing financial crimes, aka being on the ‘grey list’, can face negative economic and reputational outcomes, including less foreign investment and capital inflows, credit rating downgrades, and increased transaction costs.

The FATF Plenary meets three times a year, usually in February, June, and October.

Following last week’s meeting in Strasbourg, Tanzania (under increased monitoring since October 2022), Mali (since October 2021), and Croatia (since June 2023) were removed from the grey list, while Bolivia and the British Virgin Islands were added. 

The Plenary congratulated Tanzania, Mali and Croatia for their positive progress in addressing the previous strategic anti-money laundering and countering the financing of terrorism and proliferation financing (AML/CFT/CPF) deficiencies. 

“The jurisdictions have have completed their Action Plans within agreed timeframes and will no longer be subject to the FATF’s increased monitoring process,” said the FATF in its official statement, while noting the nations will continue to work with their respective FATF-style regional bodies to sustain improvements in their systems. 

Minister Nchemba noted that since Tanzania was added to the FATF list in October 2022, the government had undertaken a series of reforms aimed at improving its financial systems and aligning with global standards, and that ensuring transparency and system integrity is vital for sustainable development and investor confidence.

Removal from the grey list is likely to stimulate foreign investment in Tanzania. 

Meanwhile, several African nations remain on the FATF grey list, including South Africa, which was added in February 2023. As Webber Wentzel partners Lerato Lamola and Kent Davis discussed with Africa Legal, South Africa has worked to address several legislative deficiencies identified in 2023, including more emphasis from regulators on how groups manage AML risk within South Africa and beyond. 

On 13 June, the FATF noted many African nations still on the list had made key reforms and positive progress. South Africa has “substantially completed” all 22 items on its Action Plan, adopted when it was greylisted, such that its progress warrants an on-site assessment “to verify that the implementation of AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future.”

On-site assessments were also approved for Nigeria, Mozambique, and Burkina Faso, who likewise had substantially completed their Action Plans. If the visits go well, the FATF may delist those African nations at their next Plenary in October.