South Africa

New Documents

The Financial Intelligence Centre of South Africa issued a press release highlighting the recent statement by the Financial Action Task Force on high-risk jurisdictions with strategic anti-money laundering, counterterrorist financing and proliferation financing deficiencies.

The Financial Intelligence Centre of South Africa published its 2019-2020 annual report, focusing on partnerships to assist in combating financial crime.

Enforcement Actions

The South African Reserve Bank issued sanctions against Standard Bank South Africa Limited, GroBank Limited, Ubank Limited, Bank of China, Johannesburg Branch and HBZ Bank Limited for anti-money laundering deficiencies and violations of the Financial Intelligence Centre Act.

The South African Reserve Bank’s Prudential Authority imposed a 400,000 rand fine on Durban, South Africa-based bank for failing to comply with the Financial Intelligence Centre Act 38 of 2001, including failing to properly comply with the cash threshold reporting requirement.


Important Facts

  • The U.S. State Department identifies South Africa as a major money laundering jurisdiction. South Africa's position as the major financial center in the region, its sophisticated banking and financial sector, and its large, cash-based market make it vulnerable to exploitation by transnational and domestic crime syndicates. The largest sources of laundered funds are derived from corruption, fraud, and organized crime. Organized crime, business email compromises, theft, racketeering, currency speculation, credit card skimming, wildlife poaching, theft of precious metals and minerals, human trafficking, stolen cars, and smuggling are additionally popular sources of laundered proceeds. Many criminal organizations are involved in legitimate business operations. In addition to criminal activity by South African nationals, observers note criminal activity by: Nigerian, Pakistani, Andean and Indian drug traffickers; Chinese triads; Taiwanese groups; Bulgarian credit card skimmers; Lebanese trading syndicates; and the Russian mafia. Foreign nationals are using South African nationals to help them send money gained from illegal activities to foreign countries. In some instances, nominee structures have been exploited by criminals who intend to launder illicit funds by mixing them with legitimate assets held on someone else's behalf.
Source: 2018 International Narcotics Control Strategy Report (INCSR)
  • KYC Covered Entities: Banks, credit institutions, post office banks, foreign exchange dealers, securities traders and brokers, entities that issue traveler’s checks, real estate agents, gaming institutions, gold dealers, attorneys, used car dealers, and money lenders
  • STR Covered Entities: Banks, credit institutions, post office banks, foreign exchange dealers, securities traders and brokers, entities that issue traveler’s checks, real estate agents, gaming institutions, gold dealers, attorneys, used car dealers, and money lenders
  • Enhanced Due Diligence Procedures for PEPs: Foreign: Yes; Domestic: Yes
  • Money Laundering Criminal Prosecutions/Convictions: Prosecutions: N/A; Convictions: N/A
Source: 2016 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i

Technical Effectiveness
Compliant : 9 High :
Largely Compliant : 14 Substantial :
Partially Compliant : 19 Moderate :
Non-Compliant : 7 Low :

BASEL i

Rank : 87/141
Score : 4.83/10

TRANSPARENCY INTERNATIONAL i

Rank : 70/180
Score : 44/100

Tax Justice Network i

Rank : 58/133
Score : 56/100