The government is determined to address concerns raised by the Financial Action Task Force (FATF) as quickly as possible with the fundamentals in place to get off the “grey list”.
In his weekly newsletter to the nation, President Cyril Ramaphosa said the government has gone through a rigorous process of addressing the issues that FATF has raised.
This comes after South Africa was put on a “grey list” last week for falling short of certain international standards in combating money-laundering and other serious financial crimes.
The FATF is a global body that aims to tackle money-laundering and terrorist financing.
South Africa has been a member of FATF for the last 20 years due to its commitment to fighting these criminal activities both at home and across the world.
“As a country that both values and enforces the rule of law, the greylisting is an opportunity for us to tighten our controls and improve our response to organised crime.
“This will ultimately place us on a stronger footing to effectively fight these damaging and dangerous crimes,” the president said.
Ramaphosa added that South Africa welcomes the intensified monitoring by FATF.
Government has a focused action plan in place to address the remaining deficiencies identified. Most of these deficiencies relate to the implementation of laws.
For example, South Africa needs to be able to demonstrate an increase in the investigation and prosecution of serious and complex money-laundering and terrorism financing.
This includes an increase in mutual legal assistance requests to other countries, an increase in the use of financial intelligence, and implementation of targeted financial sanctions.
“Our action plan to address these deficiencies is aligned with the work we are doing to implement the recommendations of the State Capture Commission as outlined in our submission to parliament in October last year.”
Ramaphosa said like all countries, South Africa is dealing with the shifting sands of globalised crime and criminal syndicates.
He added that the challenge facing authorities is to anticipate criminal innovation and to respond swiftly and effectively.
Since the dawn of democracy in 1994, the country has sought to build credible, independent institutions and implement laws to deal with complex financial crimes.
South Africa forged collaborative relationships with transnational entities and global bodies in the financial sector, including the FATF and Interpol.
During South Africa’s last regular mutual evaluation of its measures to combat money-laundering and the financing of terrorism, a number of deficiencies were identified.
Ramaphosa said: “The mutual evaluation was conducted in 2019 when the country was emerging from the state capture era, which had a particularly detrimental impact on institutions like the SA Revenue Service and the National Prosecuting Authority (NPA).
“Since the results of the mutual evaluation were published in 2021, we have made great progress in addressing the identified shortcomings.
“Of the 67 recommended actions emanating from the mutual evaluation, we have successfully addressed all but eight strategic deficiencies.
“For example, we have addressed significant weaknesses in our legal framework through the enactment of amendments to laws on anti-money-laundering and combating terrorism financing.”
Strengthening fight against corruption
Last week, Finance Minister Enoch Godongwana announced in the Budget Speech that additional funds will be allocated to the police, NPA, special investigating unit (SIU), and financial intelligence centre (FIC) to strengthen the fight against crime and corruption.
Ramaphosa said one of the most effective tools for combating money-laundering and other financial crimes is the multidisciplinary fusion centre which was established in 2020.
The centre brings together institutions such as the NPA, SIU, SA Revenue Service, the Hawks, crime intelligence, state security agency, and the FIC.
Since its inception, the work of the fusion centre has led to the preservation and recovery of abpit R1.75-billion in criminal assets.
“It is noteworthy that the strategic deficiencies identified by the FATF do not relate directly to the country’s financial sector.
“This means that financial stability and costs of doing business with South Africa will not be seriously impacted by the greylisting,” Ramaphosa said.
The president lauded the partnerships between the government and the financial sector for playing a valuable role in efforts to address serious economic crimes.
“The South Africa anti-money laundering integrated task force was set up in 2019 as a partnership between the banking sector and government regulatory authorities.
“Between 2020 and the end of March 2022, successful interventions by the task force led to the preservation of criminal assets worth R86-million.” – SAnews.gov.za
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