In recent years, South Africa has become a preferred haven for African kleptocrats to launder money, according to a report by the organization Open Secrets, published on Thursday, November 14, 2024.
An investigation by Open Secrets, an organization dedicated to combating economic crimes in the private sector through research and investigation, reveals that prominent African families have used South African properties to launder illicit funds.
The report highlights how leading South African real estate agents and law firms have facilitated money laundering by helping politicians and politically exposed persons (PEPs) use dirty money to purchase luxury properties in South Africa.
It uncovers how corrupt politicians from Mozambique and other neighboring countries invested millions of dollars in acquiring high-end properties in exclusive and gated communities in Johannesburg and Cape Town.
Open Secrets investigators discovered that these millions were likely the illegal proceeds of an unprecedented looting spree, during which Mozambican politicians, intermediaries, and politically exposed persons embezzled $2.2 billion from three state-owned companies.
Last year, South Africa was placed on the Financial Action Task Force (FATF) "grey list," indicating deficiencies in its efforts to combat illicit financial flows, money laundering, and terrorism financing.
The southern African country is currently under increased scrutiny to address weaknesses in its anti-money laundering, counter-terrorism financing, and anti-proliferation financing frameworks.
Being on the grey list affects South Africa’s international reputation, often resulting in its inclusion on the EU's list of high-risk third countries and in other jurisdictions' high-risk registers.