South Africa Remains a Risky Jurisdiction for Terror Finance

South Africa would like to get out of a very particular doghouse — the one where countries that fail to counter money laundering live. The Financial Action Task Force (FATF), the world’s leading intergovernmental agency tasked with fighting such scourges, conducted a country visit on July 29 and July 30. Pretoria hopes the summer tour will lead to the removal of its negative rating at FATF’s October meeting.

South African Terror Finance Issues

FATF, which also assesses efforts to counter terrorism finance, places countries of concern on a grey list. Jurisdictions with serious deficiencies and no plans for reform find themselves on a black list. The reputational damage discourages investment, leading to serious financial consequences. Pretoria, grey listed since February 2023, says it has addressed 22 action items FATF requested to reduce its money laundering and terrorism finance risk.

While South Africa has worked to address FATF’s concerns, Pretoria needs a paradigm shift in its counterterrorism approach. South Africa follows the UN Security Council’s lax terrorism list, which omits Hezbollah and Hamas, rather than maintaining its own, allowing the Iranian proxies to operate freely on South African soil.

Hamas in South Africa

The Union of Good, sanctioned by the United States in 2008 for funding Hamas, listed 17 South African organizations — including the Muslim Judicial Council (MJC) and Gift of the Givers — as members. The union named South African cleric Ebrahim Gabriels as a board member, and Gabriels was reportedly Hamas’s gateway to South Africa’s Muslim community.

Gabriels held leadership roles in MJC and the South African branches of the Al-Quds International Foundation and the Al-Aqsa Foundation. The U.S. Treasury Department sanctioned the Al-Aqsa Foundation and its South African branch in 2003 and the Al-Quds Foundation in 2012. The MJC, the South African branch of the Al-Quds Foundation, and South Africa’s ruling African National Congress (ANC) party hosted Hamas leader Khaled Meshaal in 2015.

South African leaders have hosted several Hamas delegations over the years, often creating a false firewall by doing so as ANC officials and not in their governmental capacity. The ANC even hosted three senior Hamas officials two months after Hamas committed its October 7, 2023, atrocities in Israel.

South African President Cyril Ramaphosa appointed Gift of the Givers founder and director Imtiaz Sooliman to the National Dialogue, a select group of leaders tasked with arriving at solutions to South Africa’s challenges, despite Sooliman’s organization’s alleged ties to Hamas and Sooliman’s plunge into overt antisemitism. Sooliman declared in October 2024, “Zionists … run the world with fear. They control the world with money.”

Hezbollah and ISIS in South Africa

In April 2023, the U.S. Treasury sanctioned Hezbollah financier Nazem Said Ahmad and his South Africa-tied network, two months after FATF placed the country on its grey list. Ahmad and his family operate several companies in South Africa as part of their illicit finance scheme and were responsible for more than $400 million worth of financial transactions, according to the U.S. government. The South African government does not appear to have penalized the Ahmad network.

South Africa has also failed to act against U.S.-designated ISIS leader Farhad Hoomer. South African police arrested Hoomer in 2018 and 2021 but released him both times out of incompetence or sabotage.

Deficiencies in the Hoomer case were hardly an aberration. Pretoria sacked its police minister — who remains a member of parliament — in July over credible allegations that he was in cahoots with a gangster involved in murder and millions of dollars’ worth of contract fraud.

South Africa Must Recognize Hamas and Hezbollah as Terrorist Groups

The United States should pressure FATF to keep South Africa on the grey list while encouraging Pretoria to formally designate Hamas and Hezbollah as terrorist organizations. Doing so could create a credible pathway for improving strained ties between the two countries.

David May is a research manager and senior research analyst at the Foundation for Defense of Democracies (FDD). For more analysis from the author and FDD, please subscribe HERE. Follow David on X @DavidSamuelMay. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.