The Minister of Finance has tabled the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill  in Parliament,  and has confirmed that the Bill has been submitted to the Standing Committee on Finance (SCOF) and the Select Committee on Finance(SECOF). 

Cabinet approved the tabling of the Bill in Parliament at its meeting of 17 August 2022, demonstrating its commitment to the fight against corruption, money laundering and terror financing. 

This signifies a significant step towards addressing the deficiencies identified by the Financial Action Task Force’s (FATF’s) Mutual Evaluation Report (MER) of South Africa, published by the FATF in October 2021. When enacted into law, it will improve South Africa’s adherence to international best practices in combating financial crimes and corruption. 

The Amendment Bill seeks to strengthen the country’s Anti-Money Laundering and Combating of the Financing of Terrorism (AML/CFT) laws, and makes significant changes to many relevant laws related to fighting against financial crimes. 

The proposed amendment of five pieces of legislation which are administered by different Ministers seeks to fully satisfy the technical compliance deficiencies (deficiencies relating to the adequacy of laws and legal frameworks related to the 40 FATF Recommendations) that were identified in the Mutual Evaluation Report. 

South Africa received a very poor ratings assessment in its mutual evaluation, and as a result has been placed in an enhanced follow-up process, which involves more frequent reporting to the FATF, until South Africa has addressed all the deficiencies that were identified. 

South Africa was also placed in a one-year observation period (from October 2021 to October 2022). In terms of the follow-up process, South Africa is required to submit its first follow-up report to the FATF at the end of August 2022, and a second report in October 2022, in preparation for the February 2023 FATF Plenary. This follow-up process requires demonstrating improvements in (i) the legal framework (technical compliance) and (ii) effectiveness in combating financial crimes. 

A FATF greylisting, which is made public, is likely to have the effect of increasing the cost of doing business for South African businesses with foreign trading partners. 

The South African authorities have also secured technical assistance from the World Bank and the European Union, to learn the lessons of other countries on how to strengthen the AML/CFT system to better tackle financial crimes and corruption, and to prevent the country from being greylisted. 

Parliament will guide on the process for considering the Bill, including the timing for taking public comments, convening hearings, making amendments and the passing of the Bill.