The FSCA says its “risk-based” approach for financial institutions fighting money laundering and terror financing is preferable to additional compliance hurdles, Business Times reports.
The FSCA, the South African Reserve Bank and the Financial Intelligence Centre (FIC) will not step-up due diligence but will adopt a “risk-based approach”, the authority said. This includes off-site supervision, more compliance reporting, and meetings with and inspections of financial institutions determined to be at high risk of transactions that facilitate money laundering and terror financing.
FIC spokesperson Panna Kassan said the Centre would support institutions to ensure they have an appropriate understanding of their customers’ identities and the nature of their business to manage the risk of their products and services being abused to launder money or finance terror. “It requires that institutions understand the relative risks for money laundering and terrorist financing that flow from their relationships with their customers and apply stricter controls in cases where these risks are higher, and less strict controls where the risks are lower,” said Kassan.
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Read: FSCA, Reserve Bank say they will step up their anti-money laundering efforts
Health Squared in final liquidation
The High Court in Johannesburg placed Health Squared Medical Scheme in final liquidation on 17 February. The scheme was placed under provisional curatorship in September 2022.
In a statement, the Council for Medical Schemes (CMS) said Health Squared’s demise was decided at its annual general meeting on 24 November 2022 when eight of the 13 attendees voted in favour of winding up the scheme.
According to the curator, Joe Seloane, the scheme’s solvency ratio was 0.5% in August, and by September 2022, the membership was 307. The CMS said Seloane has completed his work and provided the Registrar of Medical Schemes with a final report.
CIPC to collect beneficial ownership information
The Companies and Intellectual Property Commission (CIPC) will collect information about the beneficial owners of entities on its register, the CIPC said in a statement on 1 March.
The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, which amended the Companies Act and was signed into law in December last year, gives the CIPC a mandate to collect beneficial ownership information. The purpose is to ensure that the ultimate beneficial owners of entities on the CIPC’s register are known, and that the abuse of corporate vehicles as means to facilitate money laundering and the financing of terrorism is reduced and mitigated.
More information will be communicated once the regulations in terms of the Companies Act to give effect to the General Laws Amendment Act have been passed.
SA’s ties with Russia pose a risk to the economy
FirstRand chief executive Alan Pullinger says South Africa’s failure to condemn Russia’s invasion of Ukraine is morally “despicable”, and the decision to stage joint naval exercises with China and Russia could be potentially “catastrophic” for the economy, Business Day reports. “Increasingly, the progressive world is going to start looking around at countries that are friendly to or are enabling Russia, and they’re going to say maybe we need to weaken them as well. We’re playing with fire here,” he was quoted as saying.
Pullinger said his chief concern was that Western powers might retaliate by potentially imposing trade barriers or restricting South Africa’s access to the SWIFT global payments system or other market settlement and clearing mechanisms. He also cautioned the US could revoke South Africa’s duty-free access to its market under the African Growth and Opportunity Act, which is due to expire in 2025.
