South Africa Delisted from EU High-Risk Jurisdictions List in Boost for Trade and Investment

South Africa has received a major vote of confidence from the European Union, with the removal of the country from its list of High-risk Third Country Jurisdictions. This step follows the nation’s exit from the Financial Action Task Force (FATF) greylist and the United Kingdom’s similar list on 13 October 2025. The National Treasury welcomed the move, noting it reflects hard work to strengthen systems against money laundering and terror financing. While this is a big win, officials stress that more needs to be done to fix remaining gaps in the fight against financial crimes.

The delisting, effective from 29 January 2026, comes after the EU published its decision on 9 January 2026. It acknowledges progress not just in South Africa but also in five other African nations: Burkina Faso, Mali, Mozambique, Nigeria, and Tanzania. For everyday people and businesses, this could mean smoother dealings with European partners, less paperwork, and better chances for growth. In a tough global economy, where trust matters, this change could help draw more foreign money and jobs to South Africa, supporting efforts to cut unemployment and boost trade.

National Treasury’s Response and Ongoing Challenges

The National Treasury made it clear that getting off these lists is a step forward, but not the end of the road. “National Treasury notes that removal from the FATF and EU lists of high-risk jurisdictions does not mean that all South Africa’s challenges in implementing its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system have been resolved, and recognises that much work still needs to be done to strengthen deficiencies in the prevention, identification, investigation and prosecution of money laundering and terrorism financing,” officials said on Tuesday.

This honest view shows the government’s commitment to keep improving. Over the past few years, South Africa has rolled out new laws, better checks in banks, and stronger teams to spot and stop dirty money. These changes helped meet FATF’s action plan, leading to the greylist exit. But with financial crimes still a global threat, staying vigilant is key to protect the economy and keep international ties strong.

The Treasury also pointed out that while EU banks no longer have to do extra checks on South African deals by law, some might still choose to based on their own rules. This means the full benefits could take time to show, as firms update their ways of working.

EU’s Acknowledgment of African Progress

The European Union gave a nod to the hard work across the continent. “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. The Commission therefore considers that Burkina Faso, Mali, Mozambique, Nigeria, South Africa and Tanzania no longer have strategic deficiencies in their AML/CFT regimes…”

This group effort highlights how African countries are teaming up to fight financial threats. For South Africa, being part of this positive story boosts its image as a leader in the region, encouraging more cooperation on trade and security. The EU’s list aims to safeguard its own markets, but removing countries shows trust in their fixes, opening doors for easier business flows.

Background on South Africa’s Greylisting and EU Addition

South Africa landed on the FATF greylist in February 2023 due to weak spots in tracking and stopping money laundering and terror funding. This led to the automatic addition to the EU’s high-risk list in August 2023, under Article 9(1) of Directive (EU) 2015/849. The rule requires extra caution for deals with high-risk countries to keep the EU’s financial system safe.

Being on these lists brought real headaches. “This EU law requires that financial institutions in the EU must apply a higher level of scrutiny to transactions involving parties in countries deemed to be high-risk (enhanced due diligence), resulting in more rigorous and intrusive checks, increased documentation requirements, continuous monitoring and senior management approval for transactions,” the National Treasury explained.

These extra steps slowed down payments, trade, and investments, hitting sectors like exports and tourism. For example, South African firms faced longer waits for funds from Europe, and some deals fell through due to the hassle. The greylisting also shook investor trust, making it harder to attract money for big projects like infrastructure or green energy.

To get off the lists, South Africa fixed 22 key issues flagged by FATF, from better bank oversight to tougher laws on non-profits and trusts. This involved changes to acts like the Financial Intelligence Centre Act and more training for police and prosecutors. The quick turnaround—just over two years—shows strong political will and teamwork across government bodies.

Economic and Global Implications of the Delisting

Getting delisted is more than just good news—it’s a game-changer for the economy. With fewer barriers, trade with the EU, South Africa’s second-biggest partner after China, could pick up speed. In 2025, exports to Europe hit around R500 billion, covering cars, fruits, and minerals. Smoother checks mean faster payments and lower costs, helping small businesses and farmers compete better.

On the investment side, the move signals that South Africa is a safer bet. Foreign direct investment dipped during greylisting due to risk fears, but now, with improved ratings from agencies like Moody’s, more cash could flow in. This ties into the government’s push for reforms under Operation Vulindlela, aiming for higher growth and jobs.

Globally, this strengthens South Africa’s role in groups like the African Union and BRICS, where fighting financial crimes is a shared goal. It also helps in talks for better trade deals, like updating the EU-South Africa agreement to include more on digital and green tech.

However, challenges linger. Corruption cases, like those from the state capture era, still need strong prosecutions to build full trust. Plus, with climate and cyber threats rising, keeping AML/CFT systems up-to-date is crucial.

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