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Business Insider
18-07-2025
- Business
- Business Insider
Africa's richest economy moves closer to exiting dirty-money list
South Africa is on track to exit the Financial Action Task Force's (FATF) so-called grey list by October. South Africa is progressing towards exiting the FATF's grey list by October. FATF assessors will visit South Africa to confirm the sustainability of implemented reforms. Grey listing affects the economy and international confidence, limiting investment and aid. South Africa is on track to exit the Financial Action Task Force's (FATF) so-called grey list by October, with a team of assessors set to visit the country this month. The FATF has already concluded that South African authorities have fulfilled 'all or almost all' of the required actions, according to FATF President Elisa de Anda Madrazo. The upcoming visit will focus on confirming that reforms to combat money laundering and terrorist financing have not only been implemented, but are sustainable, Bloomberg reported. Economic toll While being placed on the grey list does not trigger immediate penalties, it can seriously harm a country's economy and reputation. It often undermines confidence in the financial sector and limits access to international aid and investment. A 2021 report by the International Monetary Fund (IMF) found that grey listing can reduce capital inflows by as much as 7.6% of a country's GDP. Removal from the grey list would mark a huge milestone for Africa's most industrialised economy, potentially restoring investor confidence and improving capital flows. South Africa was added to the list in February 2023 due to shortcomings in its financial oversight. 'They will assess, report back to the plenary, and a decision will be made,' De Anda said. Speaking on the sidelines of the G20 finance ministers and central bank governors' meeting in South Africa, she added: 'What I can say is we do see political commitment from South Africa.'
The Diplomat
18-07-2025
- Business
- The Diplomat
FATF is Behind the Curve on Cambodia's Cyber-scam Compounds
According to the U.N. Office on Drugs and Crime, Cambodia-based scamming operations are generating billions of dollars in illicit profits each year. The global Financial Action Task Force (FATF) watchdog has yet to publicly grasp the dangers posed by the growth of cyber-scam compounds, including converted casinos, in Cambodia since the COVID-19 pandemic. Financial controls at Cambodian casinos were identified as an area of concern by the Paris-based FATF in a mutual evaluation report as far back as 2017. The report found that the Cambodian sectors most vulnerable to money laundering were casinos, along with the real estate, legal, and remittance and banking sectors, due to a lack of regulatory supervision. The FATF added Cambodia to its 'grey list' in February 2019, but removed the country from the list in February 2023. Yet a further mutual evaluation report in August 2023 found that: 'Weaknesses remain with fit and proper tests of casinos, lawyers, and accountants.' This was no simple loophole. The U.N. Office on Drugs and Crime (UNODC) estimates that cyber-enabled fraud caused financial losses of between $18 billion and $37 billion in 2023, most of it due to scams by organized crime groups in Southeast Asia. Cambodia, along with Myanmar, is a major scamming hub. UNODC in January 2024 reported that COVID-19 led to the repurposing of Cambodian casinos into cyber-scam compounds as regular business dried up. Yet Cambodia and other countries in the region, according to UNODC, 'pay virtually no attention' to casino junket operators, despite 'widespread misuse of these businesses for large-scale money laundering and underground banking by transnational organized crime groups.' I recently interviewed FATF president Elisa de Anda Madrazo for the Financial Times publication 'Banking Risk and Regulation.' She pointed to cases of the authorities in Cambodia and Malaysia cooperating to make arrests of members of organized crime gangs suspected of human trafficking. Such arrests have not been enough to dent the capacity of the compounds. In April 2025, the UNODC found periods of increased law enforcement activity in Cambodia have 'dampened the expansion of these industries in some more visible and accessible locations' but have also prompted 'significant expansion in more remote locations.' De Anda Madrazo said that Cambodia's next assessment will start 'in the next few years' and will assess how it is dealing with 'emerging threats.' Cyber-scam compounds in Cambodia and the region could fairly be classified as an established, rather than an emerging, danger. De Anda Madrazo herself said that 'cyber-enabled fraud is a major transnational organized crime that has grown exponentially in recent years.' Nigel Morris-Cotterill, a financial crime risk strategist based in Malaysia, argues that routine corruption needs to move up the agenda. Financial crime, he says, 'happens in large part because of corruption. And it persists because of lack of resources, especially in countries which have poorly paid law enforcement.' The basic police salary in Cambodia in 2024 stood at 1,306,550 riel ($326) per month. As in many other poor countries, bribes of all kinds are routinely taken to increase income. Police corruption in Cambodia is part of the much broader issue of the rule of law. The 2024 World Justice Project Rule of Law Index puts Cambodia at 141 out of 142 countries globally. The existence of industrial-scale cyber-scamming increases the possibilities for police on low pay. Amnesty International last month documented 20 cases of compounds in Cambodia which were the subject of one or more police and/or military interventions, but found that human rights abuses continued at the compounds even after the visits. When the police or military intervened, they would rescue only a small number of individuals in response to specific requests for help. The 'rescues' were largely controlled by scamming compound bosses, and were nothing like a 'raid.' The police would typically meet a boss at the gate, who would hand over the pre-requested individual. Amnesty also found evidence of collusion between police and compound bosses prior to the raids. In one case, two trafficked victims were moved immediately before a government 'crackdown' in Sihanoukville. There was no rush by the police to help the 'rescued' victims. Most survivors of scamming compounds interviewed by Amnesty spent two to three months in police detention centers, without being questioned in detail about their experiences. Some victims have reported that the police were willing to sell them back to the compounds for the right price. Low-level corruption, Morris-Cotterill says, receives little attention from the FATF. The reason, he says, is that 'there's no money in pursuing it: the entire counter-money laundering approach changed in the early 2000s from being a crime reduction measure to being about confiscation.' 'If policing is all about expenditure and revenue, which is what confiscation has come to be about, then policing has become a business, not a public service. This, as much as corruption, is a reason that crime is not deterred or detected.' De Anda Madrazo argued that being taken off the grey list doesn't make a country immune to financial crime. Morris-Cotterill sees a need for the FATF to rethink how it approaches the problem. 'The little stuff doesn't matter in the big policy-making forums,' he said. 'I find that disturbing.'
Bloomberg
18-07-2025
- Business
- Bloomberg
South Africa Moves Closer to Exiting Dirty-Money List in October
South Africa is edging closer to leaving a global financial watchdog's so-called gray list in October, with a team of assessors scheduled to visit the nation this month. The Financial Action Task Force has already determined that South African authorities had met 'all or almost all of the actions' required to leave the list and the visiting team will evaluate that 'implementation is there, but also that it's sustainable,' FATF President Elisa de Anda Madrazo said Thursday.
News18
17-06-2025
- Business
- News18
India Attacks Pakistan's Finances, Urges FATF To ‘Do The Right Thing': Inside Details Of Letter
Last Updated: Top government sources told News18 that India has once again written to the FATF to remind them to put Pakistan on the grey list during the next meeting India is mounting pressure on global financial institution Financial Action Task Force (FATF) to ensure Pakistan's economic lifeline is cut off. Top government sources told News18 that India has once again written to the FATF to remind it to do the 'right thing" by putting Pakistan on the grey list during the next meeting in autumn. The FATF lists countries according to their track records on clean money. So money laundering, for example, would put a country on the grey list, which is the equivalent of a poor CIBIL score. Sources say the letter lists all instances of past acts of terror which emanated from Pakistan, including the April 22 Pahalgam terror attack. Another point highlighted was the more than 20% recent increase in Pakistan's defence budget. The development happened at a time when the International Monetary Fund (IMF) issued a payout for Pakistan. This suggests the money was not used for the welfare and development of people. Government sources say that the last point could be the clincher to prevail upon global institutions to ensure Pakistan gets no reprieve. In fact, there is some indication of good news. In a press release, the FATF said, 'The FATF reaffirms its support to over 200 jurisdictions within its Global Network to build and enhance their counter-financing of terrorism (CFT) measures…The FATF expresses grave concern and condemns the brutal terrorist attack in Pahalgam, Jammu & Kashmir, India, on 22 April 2025." This marks the third time the FATF has explicitly condemned a major terrorist attack, following previous condemnations in 2015 and 2019. The Pahalgam attack, which tragically claimed the lives of 26 tourists, targeted innocents in a horrifying manner – they were killed at point-blank range in front of their families after being forced to confirm their religion. The FATF has enhanced its focus on the effectiveness of measures countries have put in place. That is how FATF has identified gaps that need to be addressed. The FATF has developed guidance on terrorist financing risk to support experts that contribute to evaluations of the 200+ jurisdictions in the Global Network. The FATF will soon release a comprehensive analysis of terrorist financing, compiling cases provided by the Global Network. As emphasised by FATF President Elisa de Anda Madrazo recently, 'No single company, authority, or country can combat this challenge alone. We must be unified against the scourge of global terrorism. Because terrorists need to succeed only once to achieve their goal, while we have to succeed every time to prevent it." Top government sources say that it is rare for the FATF to issue condemnation of terror acts. With the move and the letter, India is hoping for stern action against Pakistan. First Published: June 17, 2025, 07:00 IST
Hindustan Times
16-06-2025
- Business
- Hindustan Times
FATF points to fund trail, slams Pahalgam attack
The Financial Action Task Force (FATF) has condemned the April 22 terror attack in Pahalgam saying it could not have occurred without money and means to move funds between terrorist supporters, which Indian officials described as an important first direct statement by the global terror financing and money laundering watchdog and a positive step in New Delhi's renewed attempts to put Pakistan back on the grey list. Countries in the grey list are subject to increased scrutiny, given an action plan, and their implementation of this is monitored every four months. If they fail to show any progress, then they are pushed to the 'black list' and subjected to counter measures. Countries currently on the FATF black list are Iran, Myanmar and North Korea. The global body further said that it has enhanced its focus on the effectiveness of measures countries have put in place, identified gaps in terror financing, and will soon release a comprehensive analysis on that. 'Terrorist attacks kill, maim and inspire fear around the world. The FATF notes with grave concern and condemns the brutal terrorist attack in Pahalgam on 22 April 2025. This, and other recent attacks, could not occur without money and the means to move funds between terrorist supporters,' the statement titled 'Strengthening efforts to combat terrorist financing' said. A government official, who did not wish to be named, said, 'FATF rarely issues condemnation of terrorist acts. It is only the third time in the last decade that they have issued condemnation of a terrorist attack.' The watchdog had earlier issued condemnation in 2015 and 2019 of severe terrorist attacks. 'It has issued the condemnation because the international community has felt the severity of the attack and spotlights that such attacks will not go unpunished,' he added. FATF developed a TF [terror financing] Risk and Context toolkit for assessors, so that rogue states such as Pakistan cannot fool it with lies, he said. 'FATF is releasing a report on TF risks in a month's time. This is the first time the concept of 'state-sponsored terrorism' is being acknowledged by FATF as a funding source. Only India's National Risk Assessment (NRA) recognises state-sponsored terrorism from Pakistan as a key TF risk. The inclusion of 'state-sponsored terrorism' as a concept in the report demonstrates international recognition of state-sponsored terrorism by Pakistan,' he said. He quoted FATF president Elisa de Anda Madrazo's recent comments, 'No single company, authority, or country can combat this challenge alone. We must be unified against the scourge of global terrorism. Because terrorists need to succeed only once to achieve their goal, while we have to succeed every time to prevent it.' People familiar with the statement said an Indian team comprising officials from the ministries of home and finance, the Enforcement Directorate (ED), and other agencies, which had travelled to Strasbourg, France, for the FATF plenary from June 10-13, highlighted Pakistan's support for terrorism, including the Pahalgam attack, in which 26 tourists were killed. 'Evidence has been provided to prove that Islamabad has failed to enforce anti-money laundering and counterterror reforms and made no headway in prosecuting UN-designated terrorists,' said an officer, who asked not to be named. Pakistan was removed from the FATF grey list in October 2022 but Indian officials have highlighted that its support to terrorism persists and that Islamabad provides safe haven to designated terrorists. It is due for an evaluation in 2026, and Indian officials are making efforts to convey to the international community that Islamabad needs to be put back in the increased monitoring category (grey list). Before Pahalgam, a similar statement was issued by FATF in 2019 after the Pulwama terror attack, in which 40 Central Reserve Police Force (CRPF) personnel were killed. Both the incidents forced India to respond by conducting air strikes deep inside Pakistan and brought both the countries on the brink of full-scale war. The Pahalgam attack was raised by India last month at a UN meeting in Vienna as well, saying Pakistan based UN-proscribed terrorist groups such as Lashkar-e-Taiba, Jaish-e-Mohammad and their proxies have orchestrated attacks on Indian soil, leading to tragic loss of innocent lives. 'Incidents such as the 2008 Mumbai attacks, the attacks in Uri and Pathankot in 2016, the 2019 Pulwama suicide bombing, and most recently, the heinous terror attack in Pahalgam where 26 tourists were shot dead, remain deeply etched in our national consciousness,' the Indian government said last month in a statement in Vienna. In response to the Pahalgam attack, India launched Operation Sindoor on May 7. Indian forces bombed nine terror camps in Pakistan and Pakistan-occupied Kashmir (PoK) in pre-dawn strikes — in which at least 100 terrorists were killed —and sparked a series of attacks and counter-attacks across the western border, involving fighter jets, missiles, armed drones, and fierce artillery and rocket duels. In one such attack on the night of May 9-10, the Indian Air Force struck targets at 13 Pakistani airbases and military installations. After four days of fighting, military hostilities were stopped on May 10 evening as the two nations reached an understanding. The National Investigation Agency (NIA) is currently investigating the terror attack and is looking for terrorists — estimated to be four in number—who shot 26 tourists at close range before fleeing. The federal agency has interrogated several individuals including pony operators, vendors, photographers and those employed in adventure sports activities apart from hundreds of overground workers to get clues in the case. Asserting that as terrorism continues to threaten societies and citizens around the world, FATF said in its statement on Monday that it supports over 200 jurisdictions within its global network to build and enhance their counter-financing of terrorism (CFT) measures, including through the strategic use of financial intelligence – making this 'one of the most powerful instruments for dismantling terrorist financing networks'. It further said that 'in addition to setting out the framework for combating terrorist financing, the FATF has enhanced its focus on the effectiveness of measures countries have put in place'. 'That is how, through our mutual evaluations, we have identified gaps that need to be addressed'. The global watchdog claimed that it has developed 'guidance on terrorist financing risk to support experts that contribute to evaluations of the 200+ jurisdictions in the global network'. FATF asserted that it is working to improve its support to countries to stay ahead of terrorist financing risks – for example, relating to abuse of social media, crowd funding, and virtual assets -- and release a comprehensive analysis of terrorist financing. 'To improve this picture, the FATF will soon release a comprehensive analysis of terrorist financing, compiling cases provided by our global network. It will also host a webinar to help public and private sectors understand the risks and stay alert to emerging threats,' FATF added.
