South Africa removed from EU high-risk list, boosting trade and investment prospects

South Africa has been formally removed from the European Union’s list of “High-Risk Third Country Jurisdictions”, a move National Treasury on Tuesday said will ease financial friction with Europe and support trade, investment and cross-border payments.

Treasury welcomed the decision, which follows South Africa’s removal from the Financial Action Task Force’s (FATF) greylist and the United Kingdom’s high-risk list.

The EU’s decision was published on 9 January 2026 and will take effect from 29 January 2026. South Africa was originally added to the EU list in August 2023 as an automatic consequence of its greylisting by the FATF in February that year.

Under EU law, countries deemed to have strategic deficiencies in combating money laundering and terrorist financing are classified as high risk, triggering stricter compliance obligations for EU-based financial institutions.

These obligations include enhanced due diligence on transactions linked to listed countries, requiring more intrusive checks, additional documentation, continuous monitoring and senior management approval.

Treasury said these measures added friction to financial transactions, negatively affecting trade flows, payments and investment into South Africa.

The EU acknowledged the progress made by South Africa in strengthening its anti-money laundering and counter-terrorism financing (AML/CFT) framework, noting that the country had addressed the strategic deficiencies identified by the FATF and met commitments contained in its action plan

Alongside South Africa, five other African countries — Burkina Faso, Mali, Mozambique, Nigeria and Tanzania — were also removed from the EU list following their exit from the FATF greylist during 2025.

“Burkina Faso, Mali, Mozambique, Nigeria, South Africa and Tanzania have strengthened the effectiveness of their AML/CFT regimes and addressed technical deficiencies to meet the commitments in their action plans on the strategic deficiencies identified by the FATF,” said the EU.

“The Commission therefore considers that Burkina Faso, Mali, Mozambique, Nigeria, South Africa and Tanzania no longer have strategic deficiencies in their AML/CFT regimes......”

Treasury cautioned, however, that removal from the EU list does not automatically force European financial institutions to change their internal risk assessments. While the legislative obligation to apply enhanced due diligence falls away, banks and other institutions remain free to adjust their policies as they see fit.

It also stressed that delisting does not mean all of South Africa’s challenges in combating money laundering and terrorism financing have been resolved. Significant work remains to strengthen the prevention, detection, investigation and prosecution of financial crimes.

South Africa is expected to enter a new round of FATF mutual evaluation in the coming months, with the final report scheduled for presentation to the FATF plenary in October 2027. Treasury said preparations are already under way, drawing on lessons learned during the country’s exit from greylisting.

Treasury said the EU’s decision represents an important milestone in restoring confidence in South Africa’s financial system and reducing barriers to engagement with key international partners, particularly in Europe.

BUSINESS REPORT