Durban - The Financial Action Task Force (FATF) has put South Africa to the moved to grey list, placing the country under increased monitoring, counter money laundering, terrorist financing, and proliferation financing, following the sitting of its International Cooperation Review Group plenary.
On Friday the France-based global money laundering and terrorist financing watchdog, explained that when it places a jurisdiction under increased monitoring, or the greylist, it meant the country had committed to swiftly resolve the identified strategic deficiencies within agreed time frames and is subject to increased monitoring.
In his Budget Speech, on Wednesday, Finance Minister Enoch Godongwana warned that South Africa should be prepared for the possibility of being greylisted.
The FAFT said that in February 2023, South Africa had made a high-level political commitment to work with the FATF and Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to strengthen the effectiveness of its Anti-Money Laundering and Combating the Financing of Terrorism regime (AML/CFT).
“Since the adoption of its Mutual Evaluation Report (MER) in June 2021, South Africa has made significant progress on many of the MER’s recommended actions to improve its system including by developing national AML and CFT policies to address higher risks and newly amending the legal framework for Terrorist Financing and Targeted Financial Sanctions, among others,” the FAFT said on Friday.
It said that South Africa would work to implement its FATF action plan by demonstrating a sustained increase in outbound mutual legal assistance requests that help facilitate money laundering and terrorist financing investigations and confiscations of different types of assets in line with its risk profile.
The FAFT also said that South Africa had committed to improving risk-based supervision of Designated Non-Financial Businesses and Professions (DNFBPs) and demonstrating that all Anti-Money Laundering and Combating the Financing of Terrorism supervisors apply effective, proportionate, and effective sanctions for non-compliance.
It added that South Africa had committed to ensuring that competent authorities have timely access to accurate and up to date Beneficial Ownership information on legal persons and arrangements and applying sanctions for breaches of violation by legal persons to Beneficial Ownership obligations.
Another commitment made by South Africa to the FAFT was that it would demonstrate a sustained increase in law enforcement agencies’ requests for financial intelligence from the Financial Intelligence Centre for its Money Laundering and Terrorist Financing investigations.
Other commitments by South Africa included demonstrating a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of terrorist financing activities in line with its risk profile and enhancing its identification, seizure and confiscation of proceeds and instrumentalities of a wider range of predicate crimes, in line with its risk profile.
South Africa also committed to updating its Terrorist Financing Risk Assessment to inform the implementation of a comprehensive national counter financing of terrorism strategy and ensuring the effective implementation of targeted financial sanctions and demonstrating an effective mechanism to identify individuals and entities that meet the criteria for domestic designation.
SUNDAY TRIBUNE