Summary: South Africa was officially removed from the FATF grey list on October 24, 2025, after 33 months of comprehensive AML/CFT reforms. For businesses conducting cross-border payments, this means lower transaction costs (15-30% reductions expected), faster processing times (returning to 1-2 days from 3-5 days), improved banking relationships, and simplified compliance requirements. South Africa now joins Nigeria, Mozambique, and Burkina Faso as recently delisted African nations, signalling positive regional momentum for emerging market operations.
You’ve been paying 15-30% higher transaction fees on your South African payments. Your bank’s been asking for additional compliance documentation every time you process a transfer.
Some of your banking partners have quietly suggested you reduce exposure to South African clients.
This has been the reality for businesses operating in South Africa for almost three decades due to intensive reforms and regulations.
However, on October 24, 2025, all of that changed when the Financial Action Task Force (FATF) officially removed South Africa from its grey list of jurisdictions under increased monitoring.
Now, South Africa joins Nigeria, Mozambique, and Burkina Faso as African nations successfully removed from enhanced monitoring.
For businesses operating in emerging markets—particularly those handling cross-border payments—this shift carries significant implications for transaction costs, banking relationships, and operational efficiency.
What Is the FATF Grey List and Why Does It Matter?
The Financial Action Task Force sets global standards for combating money laundering, terrorist financing, and weapons proliferation financing.
When a jurisdiction is placed on the FATF grey list (formally known as “Jurisdictions under Increased Monitoring”), it signals strategic deficiencies in its anti-money laundering and counter-financing of terrorism (AML/CFT) frameworks.
Grey listing triggers immediate consequences:
- Enhanced Due Diligence Requirements – Banks and financial institutions must conduct additional verification on transactions involving grey-listed countries, increasing processing time and costs.
- Elevated Transaction Costs – Financial institutions apply risk premiums to cover increased compliance burdens, resulting in 15-30% higher fees on average.
- Banking Relationship Strain – Some institutions reduce exposure to grey-listed jurisdictions through de-risking, making it harder to establish and maintain banking partnerships.
- Reputational Damage – Grey listing signals regulatory concerns that can dampen investor confidence and complicate international business relationships.
For businesses conducting regular cross-border payments to or from grey-listed countries, these impacts translate directly to your bottom line through increased costs, delayed transactions, and administrative overhead.
South Africa's Path to Grey Listing
South Africa was placed on the FATF grey list in February 2023 following a mutual evaluation that identified strategic deficiencies across 22 specific action items.
The country’s AML/CFT regime showed weaknesses in several critical areas, including insufficient investigation and prosecution of complex money laundering cases, inadequate access to beneficial ownership information, and limited effectiveness of financial sanctions.
The grey listing came at a particularly challenging time, coinciding with South Africa’s preparation for its G20 presidency in 2025.
The designation threatened to undermine international confidence precisely when the country needed to project financial stability and regulatory competence on the global stage.
The real-world impact on South African businesses was immediate:
South African companies faced increased transaction costs for international payments. Banking partners imposed additional verification requirements, delaying routine transfers.
Some international financial institutions reduced their exposure to South African clients or implemented stricter transaction limits. Cross-border payment processing times increased from 1-2 days to 3-5 days in many cases.
The 33-Month Reform Journey
Between February 2023 and October 2025, South Africa implemented comprehensive reforms across its financial regulatory framework. The National Treasury coordinated an interdepartmental approach that addressed all 22 action items identified by FATF.
Key reforms included:
- Legislative Amendments – South Africa strengthened legal provisions criminalizing terrorist financing and enhanced targeted financial sanction regimes for both terrorism financing and proliferation financing.
- Improved Investigative Capacity – Law enforcement agencies demonstrated sustained increases in investigations and prosecutions of complex money laundering cases, terrorist financing, and unlicensed cross-border money transfer services.
- Beneficial Ownership Transparency – Authorities ensured timely access to accurate beneficial ownership information for both companies and trusts, implementing sanctions for non-compliance. Companies and professional trustee services were required to register beneficial ownership information in designated registries.
- Enhanced Supervision – AML/CFT supervisors increased resources and demonstrated effective application of proportionate sanctions for non-compliance. Designated non-financial businesses and professions (DNFBPs) came under improved risk-based supervision.
- Cross-Border Payment Controls – From September 30, 2024, low-value electronic funds transfers between Common Monetary Area countries (South Africa, Eswatini, Lesotho, Namibia) were reclassified as cross-border transactions subject to greater due diligence rather than being processed as domestic payments.
- Traveller Management System – Development of a digital declaration system for cash and bearer negotiable instruments at all borders, enabling information sharing with the Financial Intelligence Centre.
By June 2025, South Africa had substantially addressed all 22 action items. A follow-up onsite assessment in July 2025 confirmed the sustainability of these reforms, with senior government officials reaffirming political commitment to maintaining and strengthening the AML/CFT regime.
The October 2024 FATF Plenary formally recognised South Africa’s progress, paving the way for its delisting on October 24, 2025.
What are the Immediate Business Implications of South Africa's Removal?
For businesses conducting cross-border payments involving South Africa, the removal from the grey list creates several immediate opportunities:
Reduced Transaction Costs – Enhanced due diligence requirements that added 15-30% to transaction costs will gradually phase out as financial institutions adjust their risk assessments. Businesses should expect transaction fees to return to standard emerging market rates within 3-6 months.
Faster Payment Processing – Additional verification steps that extended processing times from 1-2 days to 3-5 days will be eliminated. Standard SWIFT transfers and local payment channels should return to normal processing speeds.
Improved Banking Relationships – Financial institutions that implemented de-risking measures may now be willing to re-establish or expand relationships with South African clients. Banks that restricted transaction volumes or imposed additional collateral requirements may relax these conditions.
Enhanced Investment Climate – The removal restores international confidence in South Africa’s financial system, potentially attracting increased foreign direct investment and improving the overall business environment for companies operating in the region.
Simplified Compliance – Internal compliance teams can reduce documentation requirements for South African transactions, freeing resources for other priorities. The administrative burden of justifying each transaction to banking partners will decrease significantly.
What Happens Next: The Road Ahead
While South Africa’s exit from the grey list marks significant progress, businesses should maintain realistic expectations about the ongoing requirements.
FATF’s next evaluation of South Africa’s AML/CFT regime is scheduled for 2026-2027. The country must demonstrate sustained compliance with international standards and continued effectiveness in combating financial crime. SARS Commissioner Edward Kieswetter emphasised that “removing the designation of grey listing is not a finish line but a milestone on a long-term journey toward building a robust and resilient financial ecosystem.”
South African authorities have committed to maintaining the reforms that secured delisting, including sustained investigation and prosecution of complex financial crimes, continued access to beneficial ownership information, and effective supervisory oversight. Any regression in these areas could potentially result in future grey listing.
For businesses, this creates several strategic considerations:
Monitor Compliance Developments – Stay informed about South Africa’s ongoing compliance efforts and any signals from FATF about concerns that could affect future evaluations.
Maintain Due Diligence Standards – While enhanced due diligence may no longer be required, maintaining robust internal controls remains essential for managing financial crime risk.
Capitalise on Improved Access – Now is an opportune time to establish or expand South African business relationships while competitive positioning is still adjusting to the changed regulatory landscape.
Plan for Regional Impact – South Africa’s successful removal could provide a roadmap for other African nations currently on the grey list, potentially improving the regional environment for cross-border payments.
Strategic Considerations for Cross-Border Payment Operations
South Africa’s delisting occurs alongside the removal of Nigeria, Mozambique, and Burkina Faso, signalling broader positive momentum in African AML/CFT compliance. This creates a more favourable environment for businesses operating across multiple African markets.
For companies with existing South African operations, the immediate priority should be engaging with banking partners to understand their timeline for adjusting transaction fees and processing requirements. Many institutions will require 60-90 days to update internal risk models and compliance procedures.
For businesses considering expansion into South African markets, the delisting removes a significant friction point that may have complicated previous business cases. The improved regulatory environment makes South Africa more attractive as a regional hub for African operations.
For payment service providers and fintech companies, South Africa’s removal creates opportunities to develop more competitive offerings for the South African market without the enhanced compliance costs that grey listing imposed.
How Capitalixe Can Help Navigate These Changes
Capitalixe specialises in connecting businesses to reliable payment and banking solutions across 140+ countries, with particular expertise in high-risk verticals and emerging markets.
Our team understands how regulatory changes, such as FATF grey listing and delisting, affect your payment operations.
Whether you’re looking to optimise existing South African payment channels, establish new banking relationships to take advantage of reduced transaction costs, or expand operations into newly delisted African markets, Capitalixe’s global network of regulated partners can provide the solutions you need.
Our complimentary advisory services help you navigate complex financial landscapes like South Africa’s evolving regulatory environment, ensuring you can capitalise on opportunities while maintaining compliance with international standards.
Ready to optimise your South African payment operations?
Get in touch with Capitalixe today for a free, non-obligatory consultation about how South Africa’s FATF removal could benefit your business and how to set up and manage your payment infrastructure.
