Financial Crime World

Assessment of South Africa’s Anti-Money Laundering and Counter-Terrorist Financing Measures

Key Findings

The report provides an in-depth analysis of South Africa’s anti-money laundering (AML) and counter-terrorist financing (CFT) measures, highlighting both strengths and weaknesses.

Risk Assessment

  • Gaps in risk assessments: The report identifies significant gaps in risk assessments, particularly with regards to cash transactions and the lack of understanding of terrorist financing (TF) risks.
  • Low volumes of reporting from high-risk DNFBPs: There are significant gaps in financial intelligence due to low volumes of reporting from designated non-financial businesses and professions (DNFBPs).
  • Lack of routine reporting on cash courier activity: The report notes that there is a lack of routine reporting on cash courier activity, which is a critical area for improvement.

Financial Intelligence

  • Large number of obligatory reports: While the Financial Intelligence Centre (FIC) obtains a large number of obligatory reports, there are significant gaps in financial intelligence.
  • Emphasis placed on investigating predicate offenses: The report notes that authorities have not sufficiently demonstrated proactive identification and investigation of money laundering (ML) cases as a primary objective.

Coordination and Cooperation

  • Good coordination at the operational level: While coordination and cooperation among authorities are good at the operational level, there is room for improvement in generating strategic AML/CFT policy initiatives.
  • Strengthening coordination and cooperation: The report recommends strengthening coordination and cooperation among authorities to generate strategic AML/CFT policy initiatives.

Confiscation of Criminal Proceeds

  • Proactive pursuit of confiscation: South Africa proactively pursues confiscation of criminal proceeds as a policy objective.
  • Good results achieved through civil forfeiture powers: The report notes that some good results have been achieved through the Asset Forfeiture Unit’s civil forfeiture powers.

Recommendations

Based on the key findings, the following recommendations are made:

  1. Improve risk assessments: Improve risk assessments to address gaps in understanding ML and TF risks.
  2. Enhance financial intelligence: Enhance financial intelligence by increasing reporting from high-risk DNFBPs and implementing routine reporting on cash courier activity.
  3. Increase emphasis on proactive identification and investigation of ML cases: Increase emphasis on proactive identification and investigation of ML cases, rather than focusing solely on predicate offenses.
  4. Strengthen coordination and cooperation: Strengthen coordination and cooperation among authorities to generate strategic AML/CFT policy initiatives.
  5. Continue to pursue confiscation of criminal proceeds: Continue to pursue confiscation of criminal proceeds as a policy objective.

Overall, the report provides a comprehensive assessment of South Africa’s AML/CFT measures, highlighting areas for improvement and providing recommendations for strengthening these efforts.