Treasury warns of dire consequence for SA if greylisted
South Africa is at great risk of being greylisted by the Financial Anti-Task Force (FATF) due to its inability to enforce anti-money laundering and terrorism-funding regulations.
When a country is put on the grey list, it means that it is under increased monitoring by the FATF.
A mutual evaluation report, conducted in 2019, found that the country rated poorly when it came to compliance and recommendations made by the task force.
The threat of greylisting will see government table several amendment bills over the next few months.
Acting Treasury director-general Ismail Momoniat presented one of the bills, the General Laws Amendment (Anti-Money Laundering and Combating Terrorism Financing) Bill, in Parliament on Wednesday.
Momoniat told MPs that South Africa has failed 20 of the 40 FAFT core standards and recommendations.
He warned greylisting would make it difficult for the country to trade.
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“South Africa is the only African country that has been registered with FATF.
“No country wants to be out of the financial system and they want to comply with these standards because whether their members or not, if they don’t their going to find it very hard or impossible to trade with many countries around the world. So most countries are part of the FATF system.”
South Africa has been found to be non-compliant or partially compliant in a number of areas.
These include terrorist financing offence, targeted financial sanctions, internal controls and foreign subsidiaries and powers of suspension.
The country has also failed in all effectiveness measures, scoring moderate and low.
“I don’t want to target the police and prosecuting authorities, but you’ll see that there’s three or four outcomes that we will have to show as a country that we are investigating the crimes, it doesn’t matter who is responsible. Whether you are a minister, the president, or public servant, whether you are Steinhoff or Tongaat," said Momoniat.
"All those cases, we need to get a sense that they are getting properly investigated without fear or favour. To the extent that there are prosecutions, and that people are getting prosecuted."
