In a clear bid to facilitate South Africa’s removal from the grey list, the National Treasury recently published the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill (‘the Bill’) for public comment.
Following its greylisting by the Financial Action Task Force (‘the FATF’) in 2023, South Africa is mandated to regularly report to the FATF on the legislative and other measures it adopts to combat money laundering, terrorist financing, and the funding of nuclear, chemical, and biological materials. Purportedly intended to enhance this regulatory framework through the implementation of stricter control mechanisms, the Bill proposes various amendments to a number of statutes.
Notably, the Bill proposes to amend the Nonprofit Organisations Act to incorporate maximum penalties for statutory violations, namely a R1 million fine and five years’ imprisonment.
Designed to heighten the powers of the Companies and Intellectual Property Commission (‘CIPC’), the Bill proposes several amendments to the Companies Act. These amendments empower CIPC to, inter alia, deregister and impose administrative fines against companies that fail to submit a securities register or beneficial interest register and adhere to issued compliance notices. Further, the Bill permits the Companies Tribunal to review CIPC’s decision to levy administrative fines.
Crucially, the Bill intends to amend numerous provisions of the Financial Intelligence Centre Act (‘FICA’). Crafted to improve the reach of the Act, the proposed revisions include:
- Enabling the Financial Intelligence Centre (‘the FIC’) to share information with the Public Procurement Office;
- Expanding the circumstances under which an individual or entity may provide for extraordinary expenses;
- Requiring accountable institutions to assess the risk of new delivery mechanisms and use of developing technologies involving activities potentially connected to money laundering, terrorism funding, or proliferation financing;
- Declaring accountable institutions that perform any act to support a business relationship or single transaction in violation of section 20A of FICA non-compliant and subject to administrative penalties; and
- Providing for enhanced reporting obligations for accountable institutions in possession of property owned or controlled by or on behalf of an individual or entity identified in accordance with a resolution of the United Nations Security Council.
Additionally, the Bill proposes to amend the Financial Sector Regulation Act to enable regulators within the financial sector to obtain information from beneficial or significant owners and institute investigations under prescribed circumstances, among other things.
Written comments on the content of the draft Bill may be submitted to CommentDraftLegislation@treasury.gov.za by no later than 6th February 2025.
For sound legal assistance with compliance-related matters, contact compliance@stbb.co.za today.
