South Africa and Nigeria have been placed on a global financial watchdog’s so-called gray list denoting nations with shortcomings in tackling illicit financial flows, a move that scars their international reputations and may raise costs for banks and asset managers, Bloomberg News reported. The decisions were announced by the Financial Action Task Force on Friday. While South Africa’s inclusion on the list was widely flagged as a risk, the possible addition of Nigeria attracted little attention. Morocco and Cambodia were taken off the list after improving their controls. “When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed time frames,” the Paris-based agency said in a statement on its website. “The FATF does not call for the application of enhanced due diligence measures to be applied” to jurisdictions that have been added to the list, it said. The rand slumped as much as 1.5% against the dollar after the decision was announced and as stronger-than-expected US inflation data fueled gains in the greenback.
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