SA removed from FATF grey list

South Africa has been officially taken off the Financial Action Task Force (FATF) grey list as of October 2025, after nearly three years on it, potentially clearing the way for more property investment from overseas.

The Republic entered the list in February 2023 for failing to meet international standards on anti-money laundering and terrorist financing.  Greylisting meant increased scrutiny of international transactions, along with higher compliance costs and a heavier regulatory burden for cross-border transactions.

What about economic effects? The answer isn’t cut and dried. Research by the International Monetary Fund has found that grey listing leads to a reduction in a country’s capital flows by an average of 7.6% of GDP. For example, some sources of foreign investment, including the UK and EU, have added South Africa to their lists of high-risk third countries, making it more difficult for their residents to invest.  

But in South Africa’s case, argue some commentators, the effect was limited by expectations that it wouldn’t stay on the grey list for long.  Analysts now expect the benefits of removal to be gradual rather than an immediate surge in investment.

Two years of reforms

Efforts to get off the list were spearheaded by the Financial Intelligence Centre (FIC), which identified the property sector as a particularly high-risk area and worked with agencies to improve compliance. Some of the gaps that they pointed out included incomplete compliance with business risk assessments, Risk Management and Compliance Programmes, beneficial ownership checks, and targeted financial sanctions screening.

Earlier this year, the FIC’s 2024/25 report showed that property practitioners were still lagging. About 30% of agencies still hadn’t filed Risk and Compliance Returns by the March 2025 deadline, despite a maximum financial penalty of R50 million (for legal persons) and the threat of deregistration by the Property Practitioners Regulatory Authority. During that year, the FIC received over R2.2 million in administrative sanctions against non-compliant accountable institutions.

However, the National Treasury confirmed in July that SA had met all 22 action items required by the FATF, paving the way for removal from the grey list last month.

What does it mean for the property sector?

South Africa’s removal from the grey list is already lowering the barriers other countries apply to transactions into and out of SA. Following the FATF’s announcement in October, the United Kingdom took SA off its list of high-risk third countries. While SA is still on the European Union’s list of high-risk third countries, the EU considers the FATF lists as the starting point for its own lists, raising expectations it could soon be removed.

However, the tougher regulatory requirements implemented by FIC are here to stay. The FATF will evaluate South Africa again in 2026/27, so ongoing vigilance is a must.