South Africa exits FATF greylist: what this means for trust compliance

Exiting the greylist setting the tone for increased compliance efforts, also for non-compliant trustees  

Background

The Financial Action Task Force (FATF) announced on 24 October 2025 that South Africa has been removed from the FATF greylist, also known as the “Jurisdictions under Increased Monitoring” list. This follows the conclusion of the FATF Plenary meetings, held from October 22 to 24, 2025, in Paris, France. South Africa was added to the greylist in February 2023 after the FATF conducted a mutual evaluation in November 2019 and published its report in October 2021.

The reason for our placement on the greylist was deficiencies in our anti-money laundering and counter-financing of terrorism (AML/CFT) systems, including inadequate enforcement of laws. The FATF issued a comprehensive list of shortcomings and necessary remediations, which South Africa initially targeted for removal from the greylist by February 2025. South Africa has taken extensive steps to exit the greylist, including amending legislation to better address financial crime, broadening the scope of the Financial Intelligence Centre Act, and financially empowering crime-fighting agencies. The South African Revenue Service (Sars) also implemented measures to combat tax money laundering.

Treasury’s response

Although Treasury praised all involved for removing South Africa from the greylist for now, it reminded the country that the FATF requires nations that have exited the greylist to demonstrate ongoing commitment through measurable results, such as successful investigations, prosecutions, and sanctions related to AML/CFT. These actions will form the foundation of the next mutual evaluation, expected to start in the first half of 2026 and conclude in October 2027. Treasury stated that the delisting is only the beginning of a broader process aimed at strengthening key institutions, improving enforcement and governance, and ensuring sustainable improvements. “Neither Government agencies nor regulated entities in the private sector can afford to become complacent and stop improving,” it said. 

Financial Intelligence Centre’s (FIC’s) feedback

According to the FIC’s Annual Report 2024/25, one of their focus areas during the reporting year was developing the capacity to supervise compliance with the FIC Act by designated non-financial businesses and professions (DNFBPs), such as trust service providers. This involved creating and implementing risk and compliance assessment tools to collect risk-related information and analyse submissions from accountable institutions. The use of risk-based supervision was introduced as a targeted approach in response to the FIC’s expanded supervisory scope when it assumed oversight of these sectors.

This was a learning curve for the FIC, as the industry was relatively new to them. During the reporting period, the registration of trust and company service providers (TCSPs) increased from 1,680 to 2,113. Even though it is clear that many more should have registered, judging from the number of relevant service providers in the country, it represented an increase of 26%. It also reported that it received 51 Suspicious and Unusual Transaction Reports from registered TCSPs. 

Sars’s stance

Sars Commissioner Edward Kieswetter stated that exiting the greylist was not a finish line, “but a milestone on a long-term journey towards building a robust and resilient financial ecosystem”. He recognised that Sars, along with other key institutions, was affected and must continue to play a vital role in preventing any future regression. Sars emphasised their contribution to exiting the greylist as follows:

• Increased access to beneficial ownership information:

It introduced beneficial ownership reporting obligations for legal persons and trusts, and collaborated closely with the Companies and Intellectual Property Commission (CIPC) and the Master of the High Court (MOHC) to improve access to accurate and up-to-date beneficial ownership information for these entities.

• Introduction of key legislative amendments: 

The Tax Administration Act was amended in 2023 to facilitate information exchange with CIPC, MOHC, and the Department of Social Development (DSD), further supporting the national beneficial ownership information framework.

• Capacity building: 

Sars provided training to its officials and other law enforcement personnel on money laundering, beneficial ownership, legal channels for information exchange, and the application of mutual legal assistance. This aligns with Sars’s broader strategy to use data-driven insights and advanced technology to detect and combat tax evasion and other financial crimes.

Sars’s focus is now shifting towards embedding these improvements permanently and sustainably into its operational DNA. This entails continuing to:

• Making it clear and simple for taxpayers to meet their tax obligations.
• Enforcing its tax and customs laws decisively and fairly without fear, favour, or bias.
• Collaborating with both domestic and international partners to fight the illegal economy.
• Leveraging advanced data and business intelligence to identify and combat illicit financial flows.

Sars, working with a long list of other enforcement agencies, has enhanced its financial intelligence-gathering capabilities and increased investigations as well as asset preservation and recovery related to tax and customs crimes. Although aimed at significant criminal transgressions, there is increasing evidence that Sars’s data-gathering and monitoring capabilities can be utilised across the taxpayer base. That should serve as a warning to non-compliant trustees and trust service providers.

What can be expected?

South Africa’s removal from the greylist does not signal a relaxation of regulatory oversight and enforcement in the AML/CFT sector. Instead, the regulatory authorities will maintain and strengthen the measures introduced during the greylisting period. The government believes that, while exiting the greylist is a significant milestone and demonstrates South Africa’s commitment to restoring the rule of law, it is only the start of a broader effort to further strengthen key institutions, improve enforcement and governance procedures, and ensure these improvements are sustainable, making our systems more effective in combating money laundering, terrorism financing, and proliferation financing. 

The government states that, to avoid being relisted on the greylist, monitoring and enforcement systems need to operate more effectively and seamlessly by the next mutual evaluation, scheduled to begin in the first half of 2026 and conclude in October 2027. Preparations for this are already in progress, and the government remains confident that South Africa will sustain the progress it has made. The compliance and regulatory hurdles imposed by various enforcement and regulatory agencies to meet the FATF’s greylist removal criteria will stay in place. 

Trustees, whose compliance with the amended trust legislation remains inadequate (for example, fewer than 150,000 of the 610,000 registered inter vivos trusts have submitted beneficial ownership registers to date, and few are fulfilling the requirement for trustees to record their interactions with accountable institutions), should take action to address their non-compliance.

* Van der Spuy is a Chartered Accountant with a Master's degree in tax and a registered Fiduciary Practitioner of South Africa®, a Chartered Tax Adviser, a Trust and Estate Practitioner (TEP), and the founder of Trusteeze®, the provider of a digital trust solution.

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