Anti-money laundering (AML)
ANTI-MONEY LAUNDERING
The Financial Action Task Force (FATF) background
The Financial Action Task Force (FATF) is an independent inter-governmental body that promotes policies and standards for combating money laundering,
terrorist financing, and the financing of the proliferation of weapons of mass destruction.
FATF is responsible for setting international standards and the promotion of legal, regulatory and operational measures on combating illegal activities, including money laundering and terrorist financing and other related threats to the integrity of the international financial system. South Africa has been a member of the FATF since June 2003. Mutual evaluations are peer reviews that are used to assess countries’ level of compliance to the anti-money laundering (AML) standards and identify steps necessary for them to increase their effectiveness. The findings of mutual evaluations are geared to assist member countries in strengthening their financial system, thereby enhancing the integrity of their financial system.
South Africa was subject to a mutual evaluation of its AML system by the FATF between April 2019 and June 2021 and the final Mutual Evaluations Report (MER) was finalised and published in October 2021). FATF decided on 24 February 2023 to place South Africa under list of jurisdictions under increased monitoring, which is the FATF grey list. Being grey listed by the FATF means that a country may threaten the international financial system and grey listing may have dire consequences on its reputation, economic trade, and transactions with other countries.
FATF concluded that South Africa “has a solid legal framework for combating money laundering and terrorist financing but significant shortcomings remain.” FATF identified significant findings and made recommendations on areas of improvement. South Africa has made improvements in addressing the shortcomings by implementing the General Laws Amendment Act, 2022 and the Protection of Constitutional Democracy against Terrorist and Related Activities Amendment Act. South Africa's Government and Regulators have committed to address the shortcomings in the interest of South Africa.
