SA preventing grey-listing through two legislative amendments

President Cyril Ramaphosa has signed into law two key Acts of Parliament, namely the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 and the Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act, 2022.

The amending of these laws was done to address the country’s shortcomings in its legislation relating to money laundering and terrorism financing as identified by the Financial Action Task Force (FATF) after it threatened to grey-list South Africa.

Grey-listing is the instance where the FATF places a country on an internationally recognised list to signal that it shows shortcomings with regard to implementing measures around the country’s protection against money laundering and terrorist financing.

According to National Treasury, these laws will strengthen the fight against corruption, fraud and terrorism, and also assist South Africa in meeting international standards.

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

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What exactly was amended?

The amendment to the Protection of Constitutional Democracy Against Terrorism and Related Activities Act, 2004 strengthens its provisions and expands it to include aspects such as cyber-terrorism.

The amendment to the General Laws Act improves the provisions that require financial and other institutions to perform due diligence in respect of their customers.

“This ensures that these institutions have more reliable information about their customers and are in a better position to manage money laundering and terrorist financing risks in their businesses, which addresses another key finding of the mutual evaluation,” Treasury said.

The formalising of these amended laws will help the country a great deal as it has now addressed and dealt with 15 of the 20 deficiencies relating to the inadequacy of laws and legal frameworks. FATF made 40 recommendations in its mutual evaluation report.

Remaining 5 deficiencies to be addressed through non-statutory initiatives

Treasury confirmed that the remaining 5 deficiencies identified will be addressed through non-statutory initiatives.

Later this week, on Friday (13 January 2023), South African authorities will attend a face-to-face meeting with the FATF Joint Group in Rabat in Morocco.

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South Africa will be represented by a delegation of officials drawn from the National Treasury, the Department of Justice and Constitutional Development, the State Security Agency, the Special Investigating Unit, the Financial Intelligence Centre, the South African Police Service, the South African Reserve Bank, the Financial Sector Conduct Authority, the South African Revenue Service, the Department of Social Development, the National Intelligence Coordinating Committee, the Companies and Intellectual Property Commission and the National Prosecuting Authority. T

The delegation is led by the Acting Director-General of the National Treasury.

*Compiled by Devina Haripersad