SA prevents graylisting through two legislative amendments

President Cyril Ramaphosa has enacted two key Acts of Parliament, namely the General Laws (Anti-Money Laundering and Combating the Financing of Terrorism) Amendment Act 2022 and the Protection of Constitutional Democracy Against terrorism and related activities, from 2022.

The amendment to these laws was made to address the country’s deficiencies in its legislation related to money laundering and terrorist financing, as identified by the Financial Action Task Force (FATF) after it threatened to put graylisted South Africa.

Graylisting is when the FATF places a country on an internationally recognized list to indicate that it shows deficiencies in implementing measures to protect the country against money laundering and terrorist financing.

According to National Treasury, these laws will strengthen the fight against corruption, fraud and terrorism, and will also help South Africa meet international standards.

The Treasury stated that the South African government and its authorities have been working resolutely to address the deficiencies identified in the Mutual Evaluation Report.

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What exactly was changed?

The Amendment to the Protection of Constitutional Democracy Against Terrorism and Related Activities Act, 2004 strengthens its provisions and expands it to include aspects such as cyber-terrorism.

The amendment to the General Laws Act improves the provisions that oblige financial institutions and others to carry out due diligence with respect to their customers.

“This ensures that these institutions have more reliable information about their customers and are in a better position to manage money laundering and terrorist financing risks in their businesses, which addresses another of the key findings of the mutual assessment,” Treasury said.

The formalization of these amended laws will greatly assist the country as it has now addressed and addressed 15 of the 20 deficiencies related to the inadequacy of laws and legal frameworks. The FATF made 40 recommendations in its mutual evaluation report.

The remaining 5 deficiencies must be addressed through non-statutory initiatives

Treasury confirmed that the remaining 5 deficiencies identified will be addressed through non-statutory initiatives.

Later this week, on Friday (January 13, 2023), South African authorities will attend a face-to-face meeting with the joint FATF group in Rabat, Morocco.

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South Africa will be represented by a delegation of officials from the National Treasury, the Department of Justice and Constitutional Development, the State Security Agency, the Special Investigation Unit, the Financial Intelligence Centre, the Police Service of South Africa, the Reserve Bank of South Africa. . , the Financial Sector Conduct Authority, the South African Revenue Service, the Department of Social Development, the National Intelligence Co-ordinating Committee, the Enterprise and Intellectual Property Commission and the National Fiscal Authority. T

The delegation is headed by the Acting Director General of the National Treasury.

* Compiled by Devina Haripersad

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