Eswatini: Avoids FATF Greylisting Status With AML/CTF Progress

• Eswatini has achieved four upgrades in its anti-money laundering and counter-terrorist financing frameworks, now meeting 32 out of 40 global standards.
• The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) confirmed these upgrades during its recent meeting in Tanzania.
• Eswatini was placed under increased FATF monitoring in October 2021 due to strategic deficiencies, with a January 2023 deadline to avoid greylisting.
• The country has implemented 90% of its action plan and expects to address the remaining eight recommendations by the end of 2023.
• Eswatini was removed from the FATF's increased monitoring list in February 2024, following an October 2023 onsite visit.

The significant strides made in implementing necessary legal and regulatory reforms, which are now in line with international standards, demonstrate Eswatini's dedication to combating financial crime.

Eswatini has significantly advanced its efforts to bolster safeguards against illicit financial activities, securing four crucial upgrades in its anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks. This progress means the nation now meets satisfactory ratings on 32 of the 40 global standards established to assess defenses against money laundering and terrorist financing. Only eight of the Financial Action Task Force (FATF) Recommendations remain to be fully addressed, marking a substantial stride in Eswatini's anti-money laundering compliance.

This positive development was announced by Minister of Finance Neal Rijkenberg during a press conference held at the Cabinet Offices on Tuesday. The upgrades were officially confirmed by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a regional body aligned with FATF standards, during its recent meeting in Arusha, Tanzania. This meeting took place over five days, from August 28 to September 1, solidifying Eswatini's improved standing in the global fight against financial crime. The country has successfully implemented 90% of its action plan designed to address previously identified strategic deficiencies.

Eswatini's journey toward strengthening its financial integrity began in October 2021 when the country was placed under increased monitoring by the FATF due to strategic deficiencies within its AML/CTF regime. This status carried a critical deadline of January 2023 for Eswatini to rectify these shortcomings. Failure to meet this deadline would have resulted in the country being subjected to greylisting, a designation that would have significantly increased due diligence requirements for international transactions and hampered its ability to access global finance.

Minister Rijkenberg expressed confidence that the remaining eight recommendations will be fully addressed by the close of 2023. This proactive approach led to Eswatini's removal from the FATF's increased monitoring list in February 2024, following a crucial onsite visit by the FATF in October 2023. This successful removal underscores the nation's commitment to aligning with international standards and mitigating the Eswatini financial greylisting risk.

The Minister acknowledged that Eswatini's financial institutions have already experienced heightened scrutiny as a direct consequence of the country's increased monitoring status, despite the relatively small size of its financial sector. This progress in Eswatini's anti-money laundering compliance is therefore crucial for its economic stability and international reputation. The government remains steadfast in its commitment to maintaining a robust AML/CTF framework, aiming to protect the nation's financial system from illicit activities and enhance Eswatini terrorist financing safeguards.

For lawyers and compliance officers, Eswatini's improved Eswatini FATF greylisting status signals a positive shift. The significant strides made in implementing necessary legal and regulatory reforms, which are now in line with international standards, demonstrate Eswatini's dedication to combating financial crime. This commitment not only enhances its reputation as a responsible member of the global financial community but also reduces the risk of international financial greylisting, potentially easing due diligence requirements and improving the ease of international transactions for clients operating in or with Eswatini. The ongoing FATF Recommendations Eswatini progress is a key indicator for international businesses and financial institutions.

Lawyers and compliance officers should note Eswatini's progress in strengthening its anti-money laundering and counter-terrorist financing frameworks. This reduces the risk of international financial greylisting, potentially easing due diligence requirements and improving the ease of international transactions for clients operating in or with Eswatini.

Source: Original reporting via Times of Eswatini