South Africa

New Documents

South Africa’s Financial Intelligence Centre published a report that examines the money laundering and counterterrorist financing risks of money lenders against the security of securities.

South Africa’s Financial Intelligence Centre published a report assessing the money laundering risks of the trust services provider sector.

Enforcement Actions

The Financial Intelligence Centre of South Africa fined ACS Pre-Owned Ltd. R255,575 and separately penalized Atlantis Motors Ltd. R672,526 for various anti-money laundering violations.

The Financial Intelligence Centre of South Africa released administrative measures against seven motor vehicle dealerships and one Kruger rand dealer for violating the Financial Intelligence Centre Act, 2001, including fines totaling R12,507,764.76.


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