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SA takes steps to tackle money laundering, terror funding

By , Africa editor
South Africa , 11 Apr 2024
Finance minister Enoch Godongwana.
Finance minister Enoch Godongwana.

South Africa is stepping up its efforts to combat money laundering and terrorism financing.

Enoch Godongwana, the minister of finance, issued Gazette Notice 50450 no 4712 on Monday, inviting public comments and written submissions on draft amendments to the money laundering and terrorist financing control regulations under section 77(5)(a) of the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001 - 'the FIC Act').

The Financial Intelligence Centre Act (FIC Act)'s Money Laundering and Terrorist Financing Control Regulations are focused on electronic transactions conducted through registered financial institutions.

The minister stated that the proposed amendments aim to strengthen South Africa's framework for combating money laundering and terrorist financing.

Key elements of the proposed changes include strengthening South Africa's defences against money laundering and terrorist funding, with an emphasis on the cross-border movement of cash or bearer negotiable instruments.

The amendments also propose the adoption of a reporting threshold set at R24 999.99, which will be a crucial change, since any conveyance exceeding R25 000 in or out of the Republic must now be reported.

In addition, in partnership with the South African Revenue Service (SARS), the amendments propose utilising customs officers at ports of entry and exit, as well as electronically through SARS’s traveller declarations system, to manage these reports.

According to the minister, these reforms seek to strengthen the financial system's integrity and resilience by expanding the Financial Intelligence Centre's (FIC) ability to detect and respond to suspicious activity.

Stakeholders are invited to submit their thoughts by April 19, 2024.

In a statement, the National Treasury said: “The proposed draft amendments are aimed at strengthening the country’s financial system and improve its resilience against abuse by money launderers and terrorist financiers.

“It is critical to the effectiveness of the FIC’s operational capabilities that the information it receives concerning cross- border financial flows be expanded to include cross-border movement of cash and bearer negotiable instruments.

“This is envisaged to strengthen the FIC’s ability to detect possible suspicious or unusual activity and to disseminate the relevant information to investigating and prosecuting authorities.”

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