South Africa

New Documents

The Financial Action Task Force published a mutual evaluation report on the anti-money laundering and counterterrorist financing regime of South Africa, highlighting significant shortcomings in implementing the country’s solid legal framework.

The Financial Intelligence Centre of South Africa published its annual report for 2020-2021, highlighting efforts to fight financial crime in an increasingly digital world.

News

Enforcement Actions

The South African Reserve Bank issued a financial penalty against the Johannesburg, South Africa for its failure to comply with the Financial Intelligence Centre Act 38 of 2001, as amended, in particular the anti-money laundering and counterterrorist financing requirements.

The South African Reserve Bank imposed an administrative penalty against the Western Cape, South Africa-based insurance company for violations of the Financial Intelligence Centre Act of 2001 in light of weaknesses in the company’s anti-money laundering controls.


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 | 2013

Technical Effectiveness
Compliant : 3 High : 0
Largely Compliant : 17 Substantial : 0
Partially Compliant : 15 Moderate : 8
Non-Compliant : 5 Low : 3

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