The Department of Finance has announced the commencement of South Africa’s new General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act.
The Anti-Money Laundering and Combating Terrorism Financing Amendment Act is an omnibus Act aimed at amending various pieces of legislation to address deficiencies related to combatting money laundering and terrorism financing and bring South Africa into compliance with the global standards set by the Financial Action Task Force (FATF).
This is South Africa’s main response to the threat of greylisting by the FATF and was fast-tracked through parliament in a bid to avoid that outcome.
The Act was signed into law by the president on 22 December 2022.
The Act amends five pieces of legislation to satisfy the technical compliance deficiencies that were identified by the FATF. These are:
- The Companies Act
- Financial Intelligence Centre Act (FICA)
- Financial Sector Regulation Act (FSRA)
- Non-Profit Organisations (NPO) Act, and
- Trust Property Control Act.
The response amends four of the above mentioned Acts (not the NPO Act) to include a definition of “beneficial owner”.
The Act gives the executive arm of government unfettered powers to make regulations on access to information that is mainly private, particularly in respect of trusts. One of the main aims of the Act is to provide for the disclosure of the beneficial owners and the ultimate controllers of trusts, companies and non-profit organisations (NPOs).
Finance minister Enoch Godongwana said the laws address deficiencies in at least 14 of the 20 recommendations, including an appropriate enhancement of powers and procedures for regulatory authorities.
South Africa had until October 2022 to take the necessary remedial steps to avoid being greylisted by the FATF, which would make it more difficult for countries to conduct business with South Africa and subject local companies to added checks and balances.
The National Treasury has expressed confidence that the greylisting could be avoided through the new laws. It also said that having a financial system that was able to adequately address risks of money laundering and terrorist financing was in the public interest.
The FATF will decide in February whether or not South Africa has done enough to avoid the list.
