The National Treasury has published the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024 for public comment.
The draft Amendment Bill aims to enhance South Africa’s commitment to strengthening its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) system by addressing the issues raised by the Financial Action Task Force (FATF), and to implement remedial action. This will facilitate the country’s removal from the FATF greylist and better prepare it for the next mutual evaluation scheduled for 2026/27.
The draft Amendment Bill was developed jointly with the Department of Trade, Industry and Competition, the Department of Social Development and the Financial Intelligence Centre. It proposes changes to the following four pieces of legislation:
- the Financial Intelligence Centre Act, 2001: Minister of Finance;
- the Financial Sector Regulation Act, 2017: Minister of Finance;
- the Companies Act, 2008: Minister of Trade, Industry and Competition; and
- the Nonprofit Organisations Act, 1997: Minister of Social Development.
The following are the relevant sections of the above laws that would be amended in the draft Amendment Bill, if enacted:
- Financial Intelligence Centre (FIC) Act to deal with minor deficiencies relating to targeted financial sanctions in sections 26A, 26B, 28A and 51A;
- Section 42 of the FIC Act to address minor deficiencies identified with respect to new technologies;
- Section 46 of the FIC Act to address a deficiency relating to customer due diligence measures for anonymous clients;
- Section 30 of the Nonprofit Organisations Act to specify the maximum amount of the fine and years of imprisonment in respect of an offence in terms of the Act;
- Sections 82 and 175 of the Companies Act, 2008 to address deficiencies related to the application of remedial actions and/or dissuasive and proportionate sanctions for non-compliance with beneficial ownership obligations;
- Sections 2, 3, 58, 106, 108, 111, 131 and 135 of the Financial Sector Regulation Act to close gaps in the protection of financial sector customers, and licensing and regulations for market conduct and anti-money laundering, and to strengthen licensing and enforcement powers; and
- Other technical amendments related to strengthening the country’s anti-money laundering and anti-corruption laws.
Some of the changes to specific regulation are discussed below:
Financial Intelligence Centre Act (FICA)
The draft amendments address minor deficiencies related to targeted financial sanctions and customer due diligence for anonymous clients.
It also enhances provisions relating to new technologies.
Some of the amendments relate to:
- Expands the definition of “authorised officer” to include the Public Procurement Office.
- Allows the Financial Intelligence Centre (FIC) to share information with the Public Procurement Office.
- Permits financial services for extraordinary expenses and the accrual of interest on accounts affected by prohibitions.
- Requires accountable institutions to consider risks associated with new technologies and delivery mechanisms that may facilitate money laundering or terrorist financing.
- Specifies reporting obligations for accountable institutions holding property associated with terrorist activities. Requires institutions to report attempts to conduct transactions or inquiries related to such property.
- Specifies that reports relating to the conveyance of cash to or from the Republic must be sent to the FIC within a prescribed period.
- Expands the requirement for the FIC Director to notify and publish information about entities identified by the UN Security Council or pursuant to court orders related to terrorist activities.
Financial Sector Regulation Act (FSRA)
To close gaps in customer protection, licensing, and market conduct regulations in order to strengthen licensing and enforcement powers.
- Expands the definition of financial products and services to include new and similar arrangements.
- Allows financial sector regulators to obtain information from significant or beneficial owners.
- Enables regulators to investigate suspected contraventions of financial sector laws.
Companies Act
To address deficiencies related to remedial actions and sanctions for non-compliance with beneficial ownership obligations.
- Empowers the Commission to deregister companies failing to submit a securities register.
- Allows the Commission to impose administrative penalties and the Companies Tribunal to review these penalties.
Nonprofit Organisations Act
Specifies the maximum fine and imprisonment for offences under the Act.
- Introduces a maximum penalty of R1 million or five years imprisonment for offences.
In order to interact with stakeholders through public workshops, the National Treasury will examine written comments on the draft Amendment Bill in coordination with the Department of Social Development and the Department of Trade, Industry, and Competition. Particular concerns brought up in the written comments will be the main topic of the workshops.
The revised draft Amendment Bill will be sent to Cabinet for review after taking into account input from the workshops and will then be brought before Parliament for tabling. Interested parties were invited to provide written comments on the draft Amendment Bill by 6 February 2025.
Click here to the read the Media Statement.