South Africa

New Documents

The Financial Intelligence Centre of South Africa published Public Compliance Communication No. 12A, which provides guidance on outsourcing compliance activities to third party providers.

The Financial Intelligence Centre of South Africa published a consultation feedback report relating to draft public compliance communication No. 12A on guidance concerning outsourcing of compliance activities to third-party service providers under the Financial Intelligence Centre Act, 2001.

Enforcement Actions

The South African Reserve Bank issued an administrative sanction against the Cape Town, South Africa-based authorized dealer in foreign exchange with limited authority for failing to have adequate anti-money laundering and counterterrorist financing controls as required.

The South African Reserve Bank issued an administrative sanction against the Sandton, South Africa-based life insurer for its failure to comply with required anti-money laundering control measures.


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