President Cyril Ramaphosa has signed into law two Acts of Parliament aimed at preventing South Africa from being grey-listed by the Financial Action Task Force (FATF) in February.
The president assented to the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act on 22 December 2022, and he assented to the Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act (Pocdatara) on 23 December.
Both Acts were published in the Government Gazette on 29 December.
Click here to download the General Laws Amendment Act.
Click here to download Pocdatara.
The General Laws Amendment Act amends five different Acts:
- The Trust Property Control Act – sections 1 to 8 of the General Laws Amendment Act;
- The Non-profit Organisations Act – sections 9 to 17;
- The Financial Intelligence Centre Act (Fica) – sections 18 to 54;
- The Companies Act – sections 55 to 61; and
- The Financial Sector Regulation Act (FSRA) – sections 62 to 65.
Commencement dates
The sections that amend the five Acts take effect on different dates. The commencement dates are stipulated in Proclamation Notice 109 of 2022, which was published in Government Gazette 47805 of 31 December 2022.
Click here to download Proclamation Notice 109.
Most of the amendments to the Trust Property Control Act and the Companies Act take effect on 1 April 2023.
National Treasury said the amendments to these Acts will lay the basis for South Africa to develop a comprehensive mechanism to bring transparency to the beneficial ownership of corporate vehicles, such as trusts and companies.
“This is a significant step in strengthening the ability of investigators and other authorities to pierce the corporate veil and determine who the natural persons that deal with financial and other institutions at arm’s length through trusts and companies are. These measures will boost the ability of the authorities to fight against crime and corruption perpetrated by criminal syndicates,” Treasury said in a statement published on 6 January.
Most of the amendments to the NPO Act will commence on 1 April 2023.
The amendments to the NPO Act establish a regulatory framework to protect non-profit organisations that transfer funds overseas from possible exploitation by facilitators and financiers of terrorist organisations, Treasury said.
Most of the amendments to Fica took effect on 31 December 2022.
Treasury said the amendments improve the provisions that require financial and other institutions to perform due diligence in respect of their customers. “This ensures that these institutions have more reliable information about their customers and are in a better position to manage money laundering and terrorist financing risks in their businesses.”
The amendments to the FSRA commenced on 31 December.
The amendments to the FSRA will improve the ability of financial sector regulators to scrutinise the beneficial owners of licensed financial institutions, Treasury said.
Pocdatara took effect on 4 January.
Treasury said Pocdatara strengthens and expands the Protection of Constitutional Democracy Against Terrorism and Related Activities Act to include aspects such as cyber-terrorism. The amendments also address two key findings of the FATF’s 2021 Mutual Evaluation Report by refining the offence of terrorist financing and improving the processes for the implementation of financial sanctions against supporters of terrorist organisations.
The enactment of the General Laws Amendment Act and Pocdatara was “a significant step” towards addressing the deficiencies in South Africa’s anti-money laundering and counter the financing of terrorism (AML/CFT) regime that were identified in the Mutual Evaluation Report, Treasury said.
The two amendment Acts address 15 of the 20 deficiencies AML/CFT regime identified in the report. The remaining five deficiencies will be or have been addressed through non-statutory initiatives.
In addition, the authorities have completed a second round of assessments of money laundering and terrorist financing risks and developed a national strategy to address these. The regulators have also developed policies and issued directives and guidance to strengthen financial institutions’ management of money laundering, terrorist financing and proliferation financing risks.
The authorities believed these actions address almost all the technical compliance deficiencies that were identified in the Mutual Evaluation Report, Treasury’s statement said.
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