ENACTMENT OF KEY ANTI-MONEY LAUNDERING AND COMBATING OF TERROR FINANCING LAWS
6 January 2023
President Cyril Ramaphosa has recently signed into law two key Acts of Parliament, namely the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 (“General Laws Amendment Act”) and the Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act, 2022 (“POCDATARA Amendment Act”). This is a significant step towards addressing the deficiencies in South Africa’s AML/CFT measures that were identified in the 2021 Mutual Evaluation Report and preventing South Africa from being greylisted by FATF.
South Africa underwent a mutual evaluation (peer review) of its AML/CFT system by the FATF between April 2019 and June 2021, with the final report being finalised and published in October 2021 Mutual Evaluation Report. 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. Part of the remedial efforts included the amending of six laws that are key to the effectiveness of South Africa’s AML/CFT measures.
The General Laws Amendment Act amends five different Acts, namely:
- Trust Property Control Act, 1988,
- Nonprofit Organisations Act, 1997,
- Financial Intelligence Centre Act, 2001,
- Companies Act, 2008 and
- Financial Sector Regulation Act, 2017.
The amended requirements are aiming to develop a comprehensive mechanism to bring transparency to the beneficial ownership of corporate vehicles such as trusts and companies. This will mean additional reporting and record keeping requirements relating to beneficial ownership.
You can read the amended act here.
What comes next: The FATF Mutual Evaluation follow-up process
South African authorities will attend a face-to-face meeting with the FATF Joint Group in Rabat, Morocco on 13 January 2023. South Africa will be represented by a delegation of officials drawn from the National Treasury and representatives from various other departments and agencies, including the Financial Intelligence Centre, South African Revenue Service and many others.
The meeting will give the South African delegation the opportunity to engage with the FATF Joint Group, and to respond to any further queries which the FATF Joint Group might have, and for the country to present to the FATF on the progress made in addressing the deficiencies that were identified in the Mutual Evaluation Report. The Joint Group will report to the FATF’s International Co-operation Review Group (ICRG) on the progress that South Africa has made in addressing the deficiencies that were identified in the Mutual Evaluation Report, before the ICRG makes a final recommendation to the FATF Plenary ahead of its meeting of 22-24 February 2023.
You can read the full media release of National Treasury here.
