SA has an action plan to get off the grey list

Government is determined to address the 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 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 by the FATF for falling short of certain international standards for the combating of money laundering and other serious financial crimes.

The FATF is a global body that aims to tackle global money laundering and terrorist financing. South Africa has been a member of FATF for the last 20 years due to its commitment to fight these criminal activities both at home and across the world.

“As a country that both values and enforces the rule of law, the grey listing 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.

President Ramaphosa said the country welcomed 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, the country needs to be able to demonstrate, among other things, 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 by law enforcement agencies, and the effective 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,” the President said.

President Ramaphosa said that 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 effective laws to deal with complex financial crimes of this nature.

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.

“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 South African Revenue Service (SARS), National Prosecuting Authority (NPA) and the Hawks.

“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,” the President said.

He added that the country has come a long way when it comes to developing world-class expertise, legislative reform and strengthening state institutions to combat complex financial crime.

“We have restored credibility to key institutions like SARS and the NPA to enable them to fulfil their respective mandates. We have bolstered the powers of the Special Investigating Unit (SIU) by establishing a Special Tribunal to recover public funds stolen through corruption and fraud, and an Investigative Directorate in the NPA to investigate serious corruption,” he said.

Strengthening fight against crime and corruption

Last week, Finance Minister Enoch Godongwana announced in the 2023 National Budget that additional funds will be allocated to the police, NPA, SIU and Financial Intelligence Centre (FIC) to strengthen the fight against crime and corruption.

The President said one of the country’s most effective tools for combating money laundering and other financial crimes is the multidisciplinary Fusion Centre, established in 2020.

The Fusion Centre brings together bodies like the NPA, SIU, SARS, 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 approximately 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 grey listing,” he said.

The President lauded the partnerships between 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 the beginning of 2020 and the end of March 2022 successful interventions by the Task Force led to the preservation of criminal assets worth R86 million,” the President highlighted.

Source: South African Government News Agency