Financial Crime World

South Africa Strengthens Anti-Money Laundering and Combating Terrorism Financing Laws

In a significant step towards addressing corruption, fraud, and terrorism financing, the South African government has passed two key amendments to its anti-money laundering (AML) and combating the financing of terrorism (CFT) laws.

Strengthening AML/CFT Regime

The General Laws Amendment Act and the Prevention and Combatting of Terrorist and Related Activities Intimidation Act, also known as the POCDATARA Amendment Act, aim to strengthen the country’s AML/CFT regime by addressing 15 out of 20 deficiencies identified in a recent report by the Financial Action Task Force (FATF).

Key Amendments

The amendments introduce new measures to:

  • Improve transparency in corporate ownership
  • Regulate non-profit organizations that transfer funds overseas
  • Enhance the ability of financial sector regulators to scrutinize the beneficial owners of licensed financial institutions

“We are committed to improving the effectiveness of our AML/CFT regime and addressing the deficiencies identified by the FATF,” said a spokesperson for the National Treasury. “These amendments demonstrate our commitment to tackling corruption, fraud, and terrorism financing.”

Progress Towards Meeting FATF Recommendations

The amendments bring South Africa closer to meeting the 40 FATF recommendations on AML/CFT. The remaining five technical compliance deficiencies will be addressed through non-statutory initiatives.

National Strategy and Regulatory Efforts

South African authorities have completed a second round of assessments of money laundering and terrorist financing risks and developed a national strategy to address these threats. Regulators have also issued directives and guidance to further strengthen aspects of risk management by financial institutions.

Review by FATF Joint Group

The country’s progress in addressing the deficiencies identified by the FATF will be reviewed at a face-to-face meeting between South African authorities and the FATF Joint Group in Rabat, Morocco on January 13.

“We are confident that our efforts to improve our AML/CFT regime will meet the expectations of the FATF and contribute to a safer and more stable financial system,” said the National Treasury spokesperson.