Financial Crime World

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Regulatory Environment Governing Banks in South Africa

Anti-Money Laundering and Anti-Terrorism Financing Laws

South African banks are subject to various regulations aimed at preventing money laundering and terrorism financing. Some of these regulations include:

  • The Prevention of Organised Crime Act (POC Act): creates three general money-laundering offences.
  • The Financial Intelligence Centre Act (FIC Act): seeks to combat money laundering through the creation of the FIC, which is responsible for identifying proceeds of unlawful activities.
  • Regulation 50(1) of the Banking Regulations: requires banks to establish policies and processes to protect themselves from being used for financial crimes such as money laundering.

Employee Regulations

Banks in South Africa must comply with various employee regulations, including:

  • The Compensation for Occupational Injuries and Diseases Act
  • The Unemployment Insurance Act
  • The Labour Relations Act
  • The Basic Conditions of Employment Act
  • The Employment Equity Act
  • The Employment Tax Incentives Act
  • The Occupational Health and Safety Act
  • The National Minimum Wage Act
  • The Promotion of Equality and Prevention of Unfair Discrimination Act
  • The Skills Development Act
  • The Skills Development Levies Act
  • The Unemployment Insurance Contributions Act

Data Protection

Banks in South Africa must protect sensitive customer data. The key regulations governing data protection include:

  • The Promotion of Access to Information Act (PAI Act): provides for the right of access to records of private bodies where such records are required for the exercise or protection of any rights.
  • Several grounds for refusal of a request for access to records are provided for in Chapter 4, including the mandatory protection of the privacy of third parties who are natural persons, as well as the protection of the commercial or confidential information of third parties, subject to the public interest override provided for in section 70.

Corporate Governance Requirements

Banks in South Africa must adhere to corporate governance requirements outlined in:

  • The Companies Act
  • The Independent Regulatory Board Act
  • The King IV Report on Corporate Governance

Consumer Credit Acts

The National Credit Act aims to promote a fair and non-discriminatory marketplace for access to consumer credit. Some key provisions of the NC Act include:

  • A lender is required to be registered as a credit provider in terms of the NC Act if the total principal debt owed to that credit provider under all outstanding credit agreements exceeds a prescribed threshold.

National Payment Systems

The Directive for Conduct within the National Payment System regulates the conduct of accountable institutions relating to electronic fund transfers. Banks are obliged to comply with AML and CTF legislation such as the POC Act, FIC Act, Banks Act, PRECCA Act, POCDATARA Act and Directive for Conduct within the National Payment System in respect of the FATF Recommendations for Electronic Fund Transfers.

Employment Tax Incentives

The Employment Tax Incentives Act provides tax incentives to employers who offer work experience to students and youth.