S Africa enacts key anti-money laundering and combating of terror financing laws

Johannesburg, Jan 9 (PTI) South African President Cyril Ramaphosa has signed into law two key acts to meet a deadline to avoid a greylisting by the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.

These will also strengthen the fight against corruption, fraud and terrorism, and also assist South Africa in meeting the international standards on money laundering and combating terrorism financing.

The Paris-based Financial Action Task Force (FATF) is the inter-governmental watchdog that sets global money laundering and terrorist financing standards aimed at preventing these illegal activities and the harm they cause to society.

With over 200 members, FATF monitors countries to ensure they implement the FATF standards fully and effectively and holds countries to account if they do not comply.

The South African legal system was earlier deemed inadequate to implement the objectives of the FATF.

The changes to the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act and the Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act are a significant step towards addressing the deficiencies that were identified in the 2021 Mutual Evaluation Report of the FATF.

Since then, the South African government and its authorities have been working resolutely to address the deficiencies that were identified in the Mutual Evaluation Report.

The amended Acts now include aspects such as cyber-terrorism, which had been identified as a global threat, as well as provisions for the implementation of financial sanctions against supporters of terrorist organisations. South Africa’s National Treasury said that the latest Acts would address 15 of the 20 deficiencies relating to the adequacy of laws and legal frameworks related to the 40 FATF recommendations that were identified in the mutual evaluation report.

“The remaining five deficiencies will be or have been addressed through non-statutory initiatives. In addition, the 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,” the Treasury said.

The South African regulators have also developed policies and issued directives and guidance to further strengthen aspects of money laundering, terrorist financing and proliferation financing risk management by financial institutions.

South African authorities are of the view that these actions address almost all the technical compliance deficiencies that were identified in the Mutual Evaluation Report.

The next step in the process is for South African authorities to attend a face-to-face meeting with the FATF Joint Group in Rabat, Morocco on January 13.

“The meeting will allow the South African delegation to engage with the FATF Joint Group, and to respond to any further queries that the FATF Joint Group might have, before the International Co-operation Review Group makes a final recommendation to the FATF Plenary ahead of its meeting of 22-24 February 2023,” the Treasury concluded. PTI FH NSA