‘Miracles’ needed to stop a deficient SA from being greylisted by global anti-terror financing watchdog

South Africa’s anti-money laundering and terrorism financing legislation, and especially law enforcement’s implementation efficiency, is to international standards what bumper stickers are to philosophy — a solid attempt, but found completely wanting, holey and in dire need of a facelift. Parliament has now pulled up National Treasury’s handbrake, insisting on due process when Treasury officials pushed SA’s two financing committees to quickly adopt far-ranging changes to schedules of the Financial Intelligence Centre Act of 2001.
South Africa’s anti-money laundering and terrorism-financing legislation, and especially law enforcement’s implementation efficiency, is to international standards what bumper stickers are to philosophy — a solid attempt, but found completely wanting, full of holes and in dire need of a facelift.
Parliament has now pulled up the National Treasury’s handbrake, insisting on due process when Treasury officials pushed South Africa’s two financing committees to quickly adopt far-ranging changes to schedules of the Financial Intelligence Centre Act of 2001 (Fica).
The issue is best described in the Treasury’s own words and emphasis:
“We are almost certainly headed to be GREYLISTED by the [Financial Action Task Force] next FEB 2023 UNLESS WE PERFORM A FEW MIRACLES.
“The implications: A GREYLISTING IS COMPARABLE TO A RATINGS DOWNGRADE, especially if SA is deemed not to be trying to address its deficiencies.”
Known worldwide for its measured and diplomatic approach, the National Treasury is not in the habit of screaming in underlined capitals. When it does, as in this latest presentation to journalists by Acting Director-General Ismail Momoniat, it seems prudent to take it seriously.
The Financial Action Task Force (FATF) is an intergovernmental policymaking body combating all forms of money laundering and terrorism financing. It ensures a coordinated global response to prevent organised crime, corruption and terrorism.
To be greylisted by the FATF means a country’s shortcomings are a threat to the international financial system and a serious blow to a country’s reputation. Such a country is then subjected to increased monitoring and has to deal with adverse economic consequences for trade and transactions with other countries.
Regulators in the US, UK and EU may also restrict their banks from transacting with greylisted countries’ banks. The FATF’s greylisted countries include Cambodia, Cayman Islands, Burkina Faso, Albania, Yemen, Pakistan and Syria.
Blacklisted countries — at this stage only North Korea and Iran — are officially seen as high-risk jurisdictions. The list is a warning of the significant danger of money laundering and terrorism financing that a particular nation holds in ...