Compli-Serve

The Financial Action Task Force (FATF) has acknowledged significant progress by South Africa, upgrading nine of the 22 action points required to strengthen its anti-money laundering and counter-terrorism financing (AML/CFT) framework, reports a recent BusinessLIVE report. Following the FATF October plenary in Paris, the National Treasury confirmed that eight of these nine actions are now ‘largely addressed,’ with one ‘partly addressed.’ To date, South Africa has either largely or fully met 16 of the 22 actions, leaving six items to address in the final reporting cycle ending in February 2025.

South Africa, added to the FATF grey list in early 2023, has since demonstrated improvements in its AML/CFT regime, including enhanced cooperation for international legal assistance, greater supervisory capacity, and effective financial sanctions implementation. However, the remaining six items include actions related to increased prosecution of complex financial crimes, access to beneficial ownership data, and stronger sanctions by AML/CFT supervisors. Treasury commended the progress made by all agencies but emphasized the challenges that remain in meeting FATF’s requirements by February.

Full statement by the FATF

‘Since February 2023, when South Africa made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, South Africa has taken steps towards improving its AML/CFT regime including by demonstrating a sustained increase in outbound MLA requests, strengthening its AML/CFT supervisory capacity by improving the risk-based supervision of DNFBPs, enhancing its identification, seizure and confiscation of proceeds and instrumentalities of a wider range of predicate crimes, in line with its risk profile, updating and implementing its TF strategy and increasing relevant authorities’ TF capabilities on the basis of an understanding of its TF risks, as well as ensuring the effective implementation of targeted financial sanctions. South Africa should continue to work on implementing its action plan to address its remaining strategic deficiencies, including by: (1) demonstrating that all AML/CFT supervisors apply effective, proportionate, and effective sanctions for non-compliance; (2) ensuring that competent authorities have timely access to accurate and up-to-date BO information on legal persons and arrangements and applying sanctions for breaches of violation by legal persons to beneficial ownership obligations; (3) demonstrate a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF activities in line with its risk profile.’