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Money laundering, terror financing under spotlight with South Africa review

01 April 2019 The Financial Intelligence Centre

A panel of experts from the International Monetary Fund (IMF), the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and the Financial Action Task Force (FATF) is due to test the effectiveness of South Africa’s legislative and institutional capability to detect and combat money laundering and terrorist financing.

The ESAAMLG and the FATF undertake regular peer reviews of their member jurisdictions to evaluate the extent to which they meet international standards for anti-money laundering, combating of terrorist financing and proliferation of weapons of mass destruction. The FATF is an inter-governmental body for developing and monitoring implementation of the global standards.

South Africa is one of many countries including Benin, Cyprus, Gabon, Madagascar, Mauritius, Mozambique, Tanzania, the Russian Federation, Turkey and others, that will undergo this type of assessment this year.

The National Treasury and the Financial Intelligence Centre (FIC) are co-ordinating South Africa’s inputs for the assessment.

The first phase of the assessment, a desktop review by the panel, will kick off on 1 April 2019. This will be followed by face-to-face interviews with stakeholders from the public and private sectors in October and November 2019.

The final outcome of the assessment will be made known in 2020. Should the assessment team identify possible areas for improvement, South Africa will be held accountable for follow-up actions. Once completed, South Africa will join a host of jurisdictions that have been assessed including Botswana, Ethiopia, Belgium, Ghana, Jamaica, China, the United Kingdom and the United States of America.

A largely favourable evaluation outcome will contribute to ensuring that South Africa’s financial system is regarded globally as protected and having integrity. The FATF assessments of South Africa in 2006 and 2009 resulted in amendments to relevant laws and improvements to systems and processes related to combating money laundering and terrorist financing activities in South Africa, to meet FATF’s global standards.

 

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