Delve into the implications of South Africa's FATF grey listing and the inconsistencies in global terrorism financing laws.
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By Mariam Jooma Carikci
The case of South African national Ziyadh Hoorzook, accused of financing terrorist groups in Syria, has called attention to the international terrorism classification system and importantly the double standards inherent its application. In February 2023, South Africa was placed on the Financial Action Task Force (FATF) grey list due to international concern about the lack of regulatory mechanisms to combat terrorism financing.
The grey listing has significant potential for economic and reputational fallout and therefore has a direct impact on the lives of ordinary citizens. It complicates the ability of South African businesses to engage with global markets, increases transaction costs, and heightens the risk perception among foreign investors.
The Financial Action Task Force (FATF) is an intergovernmental organisation established in 1989 by the G7 to develop and promote policies to combat money laundering, terrorist financing, and other threats to the integrity of the global financial system. It has the self-appointed task of setting international standards and provides guidelines to help countries identify and address risks related to what it considers illicit financial activities.
The FATF grey list includes jurisdictions and organisations that have ‘strategic deficiencies’ in their anti-money laundering (AML) and counter-terrorist financing (CTF) measures but are working with the FATF to address them. Think of it as the detention room for countries not completely expelled from the school of international finance. South Africa's inclusion stemmed from concerns about insufficient monitoring of financial transactions, weaknesses in law enforcement efforts, and regulatory gaps that could allow illicit financial flows to persist.
While the concept of having an international framework to combat the transfer of funds to designated terror groups is laudable, the uneven application of the criteria and context of money flows may erode its effectiveness. Indeed, the FATF is at risk of being seen as another punitive instrument used against countries whose foreign policies dare to defy the status quo of the G7 countries responsible for creating it. The selective enforcement of financial crime laws, influenced by international pressure, could undermine public confidence in the justice system.
In 2023 the FATF suspended Russia over the Ukraine war after having stripped it of leadership responsibilities within the organisation a year before. As Dr Zakhele Hlope, Adviser to the Standing Committee on Finance, Parliament of South Africa argued in an opinion piece in February last year, blacklisting Russia can only be understood as an impartial commitment to combating aggression if it is applied to all cases of violence and human rights abuses. In his piece Hlope says: "Drawing parallels with the suspension of Russia, the principles that led to Russia’s suspension – violations of FATF’s core principles and undermining global security – should apply in the case of Israel. A consistent approach is crucial for maintaining the credibility and integrity of FATF."
Despite overwhelming documented evidence of IDF operations resulting in civilian casualties and accusations of war crimes in Palestinian territories, they are not classified as a terrorist organisation by Western governments and financial institutions. This discrepancy raises questions about the politicisation of the term "terrorism" and the selective application of financial sanctions.
The Hoorzook case brings these double standards into sharp focus. While individuals accused of financing resistance movements in the Middle East are swiftly labeled as terrorism financiers, state actors engaging in military operations that violate international law often escape such scrutiny. This discrepancy perpetuates a narrative that aligns with geopolitical interests rather than objective legal definitions.
One of the 9 Special Recommendations (SRs) on terrorist financing deals with non-profit organizations and the misuse of such organizations for funding terror. It is this recommendation that sees Hoorzook in the dock, accused of funding a Syrian designated terrorist group for his donation to a Syrian charity in 2013.
In December 2020 FATF President Marcus Pelser gave the following remarks at the Annual Israeli Money Laundering Conference:
"Israel’s fight against money laundering has undergone a paradigm shift during the past 20 years. Through hard work and dedication, Israel has gone from the FATF’s ‘black list’ to having one of the strongest mutual evaluations, and membership of the FATF.
"I also want to note: Israel has hosted the Joint Experts Meeting in Tel-Aviv; nominated Dr. Shlomit Wagman to co-chair the operational Risks, Trends and Methods Group; and continues to participate in various projects and work-streams... including, most recently, Dr. Wagman, attending the FATF Steering Group meetings as a guest at my invitation."
Pelser who was also a Deputy Director General in Germany's Federal Ministry of Finance failed however to make the connection between state funded terrorism as in the case of the Israeli Defense force in the Occupied Palestinian territories. Indeed, since the creation of the FATF there would have been more than sufficient evidence of the United States and its allies bankrolling terrorist groups including the Kurdistan Worker’s Party (PKK) in northeast Syria. This despite those same government’s designation of the group as a terrorist group. This label has not prevented the US to exploit the Kurdish cause for their own benefit against both the Islamic State (which it had created) and neither against Iran who supported the US in the war against the ISIL. Interestingly Iran remains on the FATF black list.
How does this relate to the South African context? The Hoorzook case is an example of the weaponisation of the FATF in which the South African government is complicit.
South African courts are pursuing his case while there are two issues that should keep South Africans awake at night, namely the fact that South African’s serving in the IDF are not being prosecuted for active participation in a genocide but instead enjoy breaks ‘home’ in South Africa after their time killing civilians in Palestine.
Secondly, we need to raise the question of other religious organisations that use the façade of faith to fund the terrorist activities of the IDF including. In South Africa, several organisations support Israel and, by extension, the Israeli Defense Forces (IDF).
South African Zionist Federation (SAZF), South African Friends of Israel (SAFI), Women's International Zionist Organization (WIZO) South Africa. This list does not include prominent corporates like Dischem and Cape Union Mart.
According to the Boycott, Divestment and Sanctions Movement, CEO of Cape Union Mart 2015, Krawitz received the Yakir Keren Hayesod award in Cape Town raising the largest amount of funds per capita for apartheid Israel during the 2014 Israeli ‘Protective Edge’ war on Gaza in which 2 251 Palestinians, including 551 children, were killed.
It is crucial to call out these organisations for their support of what many consider state-sponsored terrorism. While individuals such as Hoorzook are prosecuted for alleged financial ties to resistance movements, charities funding the IDF continue to operate freely, highlighting a glaring inconsistency in the application of counter-terrorism laws. Addressing this double standard is essential for ensuring that all forms of terrorism financing—whether state-sponsored or non-state actors—are treated with equal scrutiny and legal consequences.
Another glaring example of financial crime impunity is found in the Democratic Republic of the Congo (DRC), where corruption within the political class enables the unchecked extraction of valuable minerals such as cobalt and coltan. These minerals are essential to the global tech sector, fuelling the production of smartphones, electric vehicles, and other high-tech products. Despite widespread reports of money laundering, bribery, and illicit financial flows linked to mineral extraction, little action is taken against those responsible.
The reliance of multinational corporations on corrupt Congolese elites has created an ecosystem of impunity, where financial crimes are overlooked in favor of economic gains. The failure to hold these actors accountable not only perpetuates instability and exploitation in the region but also highlights the selective enforcement of financial crime laws on a global scale. While South Africa faces scrutiny for regulatory deficiencies, the systemic financial crimes in the DRC remain largely ignored by the same international bodies.
One of the most glaring inconsistencies in the global fight against terrorism financing is the differential treatment of various actors accused of similar crimes. A pertinent example is the treatment of the Israeli Defense Forces (IDF). Despite numerous reports and documented evidence of IDF operations resulting in civilian casualties and accusations of war crimes in Palestinian territories, they are not classified as a terrorist organisation by Western governments and financial institutions. This discrepancy raises questions about the politicisation of the term "terrorism" and the selective application of financial sanctions.
The Hoorzook case brings these double standards into sharp focus. While individuals accused of financing resistance movements in the Middle East are swiftly labeled as terrorism financiers, state actors engaging in military operations that violate international law often escape such scrutiny. This discrepancy perpetuates a narrative that aligns with geopolitical interests rather than objective legal definitions.
For the South African government, navigating these challenges requires a delicate balance. On one hand, it must demonstrate its commitment to financial transparency and the rule of law to regain international trust and eventually be removed from the FATF grey list. On the other hand, it must ensure that enforcement efforts are fair, transparent, and free from political influence.
South Africa also has a responsibility to challenge global inconsistencies in the application of terrorism financing laws. As a country with a history of fighting against injustice and oppression, South Africa is uniquely positioned to advocate for a more equitable global financial system that does not disproportionately target individuals based on political considerations.
* Mariam Jooma Carikci is a researcher at the Media Review Network. She is the author of Kurdistan: Achievable Reality of Political Mirage?
** The views expressed do not necessarily reflect the views of IOL or Independent Media.
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