Global Trends | Financial Regulation | Africa

1. Introduction

On 24 October 2025, the Financial Action Task Force (FATF)—the world’s leading standard-setting body for combating money laundering (ML), terrorist financing (TF), and proliferation financing (PF)—announced that South Africa, Nigeria, Mozambique, and Burkina Faso have been removed from its “grey list” of jurisdictions under increased monitoring.

This delisting marks the culmination of extensive reform efforts by the four African nations to strengthen their anti-money-laundering and counter-terrorist-financing (AML/CFT) frameworks. It also carries significant legal, regulatory, and economic consequences, both domestically and internationally.

2. Understanding the FATF Grey List

2.1 What Is the Grey List?

The FATF maintains two public lists of jurisdictions with strategic deficiencies in their AML/CFT regimes:

• The “blacklist” (High-Risk Jurisdictions Subject to a Call for Action), and
• The “grey list” (Jurisdictions Under Increased Monitoring).

A country placed on the grey list has identified deficiencies in its legal or regulatory frameworks but has committed to an action plan agreed with the FATF to address them within a specified timeframe.

2.2 Consequences of Grey-Listing

While not equivalent to sanctions, grey-listing carries severe reputational and compliance consequences. Financial institutions, investors, and correspondent banks often apply enhanced due diligence (EDD) measures to transactions involving grey-listed jurisdictions.

This heightened scrutiny can result in:

• Delays and additional compliance costs;
• De-risking by international financial institutions; and
• Reduced foreign investment and cross-border trade flows.

For example, when South Africa was placed on the grey list in 2023, it faced investor caution and challenges in correspondent banking relationships.

3. The Path to Delisting

3.1 FATF’s Decision and Rationale

According to the FATF’s official statement (October 2025 plenary), the four countries were delisted after successfully completing their action plans and demonstrating effective implementation of reforms during on-site assessments.

Each jurisdiction had been under increased monitoring for between two and four years. Their removal reflects verified progress in aligning domestic frameworks with FATF’s 40 Recommendations and 11 Immediate Outcomes.

3.2 Country-Specific Progress

• South Africa
  Strengthened the enforcement capacity of the Financial Intelligence Centre (FIC), improved inter-agency coordination, enhanced beneficial ownership transparency, and increased prosecutions of money-laundering offences.
• Nigeria
  Implemented legislative reforms aligning its AML/CFT Act with FATF standards, improved suspicious transaction reporting, and bolstered cooperation between the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU).
• Mozambique
  Enhanced the operational independence of its Financial Information Office, introduced risk-based supervision for banks and designated non-financial businesses, and improved coordination with law enforcement agencies.
• Burkina Faso
  Strengthened oversight of both financial and non-financial sectors, improved cross-border information sharing, and adopted new AML/CFT regulations aligned with West African Monetary Union standards.

4. Legal and Regulatory Implications of Delisting

4.1 For Governments and Regulators

The delisting represents a regulatory milestone and confirmation that domestic AML/CFT frameworks now meet international expectations. However, continued compliance is essential: FATF emphasises that jurisdictions must sustain and deepen reforms to avoid re-listing.

Regulators in these countries should:

• Continue to review and update AML/CFT legislation;
• Enhance enforcement mechanisms and judicial capacity;
• Maintain risk-based supervision; and
• Strengthen cooperation with FATF-Style Regional Bodies (FSRBs) such as ESAAMLG and GIABA.

4.2 For Financial Institutions

Financial institutions operating domestically and internationally will experience a shift in country-risk assessments. While these jurisdictions may move from “high-risk” to “medium-risk” categories, institutions remain legally obligated under AML/CFT laws to apply risk-based due diligence.

Compliance officers should:

• Update internal AML risk matrices and KYC protocols;
• Review and adjust enhanced due diligence measures;
• Communicate status changes to correspondent banks; and
• Ensure continued monitoring for suspicious transactions.

4.3 For Investors and the Private Sector

Removal from the grey list is expected to improve investor confidence, facilitate smoother cross-border payments, and reduce the cost of capital. Legal certainty surrounding AML/CFT compliance enhances the attractiveness of these jurisdictions for foreign direct investment (FDI), mergers, and joint ventures.

However, investors should remain vigilant: the delisting does not eliminate all governance or corruption risks. Comprehensive legal due diligence remains essential.

5. Economic and Regional Impact

The delisting of four African nations simultaneously is unprecedented and signals a positive trajectory for the continent’s financial integrity frameworks. It demonstrates growing institutional maturity and commitment to international financial norms.

Economically, the decision may:

• Strengthen regional trade and investment;
• Encourage greater participation in global capital markets; and
• Improve access to international financial systems such as SWIFT and correspondent banking.

This collective achievement also enhances the credibility of African regulatory institutions in the global AML/CFT community.

6. Continuing Obligations and Residual Risks

FATF’s removal of a jurisdiction from the grey list does not mean the country is “risk-free.” Delisted countries must continue to:

• Report progress to FATF and regional bodies;
• Sustain enforcement and prosecution efforts;
• Maintain beneficial ownership transparency; and
• Guard against emerging threats such as digital asset misuse and cross-border terrorist financing.

Failure to maintain momentum could lead to re-listing, as seen in other jurisdictions historically.

7. Conclusion

The FATF’s decision to delist South Africa, Nigeria, Mozambique, and Burkina Faso represents a significant milestone in Africa’s financial governance landscape. It reflects not only technical compliance with FATF standards but also political will to combat financial crime and enhance institutional capacity.

From a legal standpoint, this achievement provides a framework for sustainable regulatory reform, renewed investor confidence, and a foundation for robust economic growth. Yet, it also underscores an ongoing obligation: ensuring that AML/CFT systems remain effective, independent, and resilient.

Delisting is not the end of reform—it is the beginning of a new era of compliance, credibility, and global engagement for these jurisdictions.

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References

• Financial Action Task Force (FATF), Jurisdictions under Increased Monitoring – October 2025
• FATF Public Statement, Plenary Meeting (Paris, 24 October 2025)
• Reuters, South Africa, Nigeria Exit Global Financial Crime Watch List (24 Oct 2025)
• Financial Times, South Africa and Nigeria Removed from Money-Laundering Grey List (24 Oct 2025)
• South African National Treasury, Media Statement on FATF Delisting (24 Oct 2025)
• Vanguard Nigeria, Nigeria and South Africa Exit FATF Grey List (25 Oct 2025)