South Africa faces a significant risk of returning to the Financial Action Task Force's grey list barely a year after it secured removal, according to the latest quarterly assessment from business lobby group Business Leadership South Africa (BLSA).

The FATF grey list names countries under increased monitoring for weaknesses in fighting money laundering and terrorist financing. A return to the list would increase scrutiny of South African financial transactions, raise compliance costs for banks and businesses, and risk some international banks pulling back from correspondent relationships — making cross-border payments and trade finance slower and more expensive. 

South Africa spent more than two years on the list before its removal and business groups warned at the time that the listing had deterred foreign investment.

The BLSA Reform Tracker, presented on Wednesday in a briefing, found that the country's corruption reform score was unchanged at 51.2 in the July-September quarter, with no deliverables advancing in the anti-corruption area.

South Africa's National Treasury, which has led the anti-corruption efforts, didn't immediately respond to a request for comment.

A score of 51.2 means anti-corruption reforms are on average stuck at the halfway mark, well below the overall reform score of 72.5.

"We are at risk of re-entering that grey list. There is significant risk," Stuart Theobald, executive chairman of research consultancy firm Krutham, which compiles and analyses the tracker, told a media briefing.

Ismail Momoniat, the National Treasury adviser who led South Africa's campaign to exit the grey list in October 2025, has also flagged the danger, with anti-corruption the weak point, the tracker said.

South Africa is undergoing a new mutual evaluation by FATF, with a peer review expected in the first quarter of 2027 and the assessment running through October of that year. The evaluation will examine whether the country has sustained the increase in investigations and prosecutions of money-laundering networks that secured its removal.

BLSA said weaknesses in law enforcement — in investigating organised crime, prosecuting successfully and recovering criminal assets — could count against South Africa. The state-appointed Madlanga inquiry into alleged corruption and interference in law enforcement has added to concerns after uncovering leadership failings in the police and intelligence services.

"We cannot afford to become complacent, particularly when the weaknesses in our criminal justice institutions, investigations, prosecutions, remain unresolved," BLSA CEO Busi Mavuso said.

Despite the grey list warning, the broader reform tracker recorded its highest score since monitoring began in March 2024, with the overall completion index rising to 72.5 from 71.3 in the previous quarter.