Passing amending legislation can help SA avoid being gray listed

The passage of the General Laws Amendment Act (Anti-Money Laundering and Countering Terrorist Financing) and the Amendment Act on the Protection of Constitutional Democracy from Terrorist and Related Activities by both houses of Parliament will definitely help the country in its efforts to avoid being greylisted in February next year.

The National Treasury has welcomed the news, saying the bills help the country tick some of the boxes on the Financial Action Task Force’s list of 40 recommendations.

Amended bills were introduced in August and July of this year

The General Law Amendment Bill was introduced into the National Assembly by Finance Minister Enoch Godongwana on August 29 this year, while the POCDATARA Bill was introduced into the National Assembly by Police Minister Bheki Cele in July. Both bills were passed by the National Council of Provinces on December 13, 2022 and will be submitted to the President for approval.

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These latest developments will add to progress in October, when Parliament also approved amendments to Schedules 1, 2 and 3 of the Financial Intelligence Center Act to address weaknesses in the country’s ability to fight money laundering and financial crime and to deal with legislation Defects.

The regulatory authorities should also undergo a proper assessment

The FATF also proposed that all regulators should conduct a suitability and proper assessment of beneficial owners. All regulators should also verify that directors, officers and beneficial owners or their employees are not criminals.

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The FATF also recommended that all regulators better prioritize and delineate on-site oversight based on money laundering or terrorist financing risks, which could be informed through external monitoring and results of previous inspections.

The South African government has done everything in its power to avoid being greylisted by the global money laundering and terrorist financing regulator.

The FATF keeps two lists: a black list and a gray list. Countries are typically gray listed when serious deficiencies are found in their anti-money laundering and countering terrorist financing policies and systems. There are currently 23 countries on the FATF’s gray list, and if South Africa is grey-listed, it will join countries like Uganda and Yemen.

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