Financial Crime World

Title: South Africa’s Progress in Combating Money Laundering and Terrorism Financing: Notable Advancements

According to the South African Financial Intelligence Centre’s (FIC) report from 2023, South Africa is making substantial strides in its anti-money laundering (AML) and combating financing of terrorism (CFT) framework, addressing 40 key recommendations from the Financial Action Task Force (FATF) to prevent and mitigate financial crimes. The following areas represent some of the significant advancements.

1. Risk assessment and risk-based approaches (R.1 and R.18)

  • South Africa is increasing its focus on identifying, assessing, and mitigating ML/TF risks in various sectors and structures.
  • Regulators are working to improve the implementation of risk-based approaches in the country.

2. National cooperation and coordination (R.2)

  • The government aims to foster more collaboration and coordination between all relevant parties, including law enforcement agencies, financial institutions, and regulatory bodies.
  • Regular training sessions, workshops, and conferences are organized to strengthen the understanding of AML/CFT processes and collaboration among stakeholders.

3. Money laundering offenses (R.3)

  • South Africa’s legislative framework continues to evolve to meet international standards.
  • The 2013 amendment to the Prevention and Combating of Corrupt Activities Act strengthens money laundering criminalization.

4. Confiscation and provisional measures (R.4)

  • South Africa is implementing enhancements to its civil confiscation regime, particularly the application of pre-trial and post-trial confiscation.
  • Legislation empowers authorities to freeze and seize funds linked to criminal activities.

5. Prohibition of providing financial services to persons identified as terrorists or financing terrorism (R.5 and R.6)

  • To prevent inadvertent service provision to persons involved in terrorism or terrorism financing, South Africa has taken measures such as:
    • Regularly updated sanctions lists
    • Enhanced client due diligence procedures

6. Financial services provided by non-financial businesses and professions (R.8)

  • South Africa regulates non-traditional financial institutions like real estate agents, casinos, and dealers in precious metals and stones.

7. Regulation and supervision of financial institutions (R.26 and R.28)

  • The South African Reserve Bank, Financial Services Board, and other regulatory bodies undertake consistent monitoring and supervision of financial institutions.
  • On-site inspections, examinations, and audits help ensure compliance with AML/CFT requirements.

South Africa remains committed to addressing money laundering and terrorism financing, ensuring the continued development and improvement of its AML/CFT framework. Stay informed about the latest advancements in this critical arena.