Third Financial Action Task Force report on South Africa

Issue 2 2022 Editor's Choice

LexisNexis Risk Solutions has released a new publication, the South Africa FATF Mutual Evaluation 2021 Report. The report highlights the effectiveness of the country’s efforts in meeting the goals of the Financial Action Task Force (FATF), established by the G7 in 1989, in fighting money laundering and terrorist financing.

The 40 recommendations of FATF (https://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html) make up a framework designed to prevent criminals and terrorists from abusing the financial system and depriving them of resources. The recommendations are aimed at financial institutions including banks, investment companies, payment service providers and insurance companies. Also included are other businesses and professions, such as casinos, real estate agents, legal professionals and others. And in keeping with the times, they also apply to crypto or virtual asset service providers.

Over 200 countries have committed to implementing the regulations. FATF carries out country assessments against its recommendations and publishes the results in Mutual Evaluation reports and Follow Up reports, which assess progress in addressing technical deficiencies.

This is the third evaluation South Africa has been through, which determines the country’s fundamentals when it comes to its anti-money laundering/terrorist financing (AML/CFT) systems.

According to the report, “FATF considers South Africa, as a G20 economy and a regional financial hub for sub-Saharan Africa, to have 'notable exposure' to the threat of foreign proceeds of crime in the region being laundered through or in the country.”

It further notes that South Africa ‘has a relatively high volume and intensity of crime and more than half of reported crimes fall into categories that generate proceeds'. Furthermore, South Africa ‘needs to pursue money laundering and terrorist financing in line with its risk profile, including so-called 'State Capture', the corruption practices involving businesses and politicians conspiring to influence South Africa’s decision-making process to advance their own interests'.

The report reviews four key areas of the FATF’s analysis of South Africa’s risks and defences, namely sanctions, customer due diligence, wire transfers and DNFBPs (designated non-financial businesses and professions). It also compares South Africa’s assessment of the FATF’s recommendations and Immediate Outcomes against other African nations and the G20.

A blunt summary of the 24-page report is that South Africa has a low level of effectiveness for preventing terrorism financing and a moderate level of effectiveness in preventing proliferation. “A number of failings around the targeted sanctions regime in South Africa were identified during the evaluation exercise, mostly due to inadequacies in the regulatory framework.”

There is, naturally, far more detail in the report than the above and readers can download the full report at https://risk.lexisnexis.com/global/en/insights-resources/white-paper/fatf-mutual-evaluation-4th-round-south-africa




Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

Access & identity expectations for 2024
Technews Publishing IDEMIA ZKTeco Gallagher Salto Systems Africa Regal Distributors SA Reditron Editor's Choice Access Control & Identity Management Information Security AI & Data Analytics
What does 2024 have in store for the access and identity industry? SMART Security Solutions asked several industry players for their brief thoughts on what they expect this year.

Read more...
AI-driven identity verification for access control
C3 Shared Services Editor's Choice
Facial authentication solutions combine advanced AI and 3D sensing technologies with ease of use to create a frictionless, touchless experience. The deployment of this technology in an access control system keeps users and administration moving.

Read more...
Access and identity in 2024
Technews Publishing Gallagher HID Global IDEMIA Ideco Biometrics Enkulu Technologies neaMetrics Editor's Choice Access Control & Identity Management Integrated Solutions
SMART Security Solutions hosted a round table discussion with various players in the access and identity market, to find out what they experienced in the last year, as well as their expectations for 2024.

Read more...
The promise of mobile credentials
Technews Publishing Suprema neaMetrics HID Global Editor's Choice Access Control & Identity Management IoT & Automation
SMART Security Solutions examines the advantages and disadvantages of mobile credentials in a market dominated by cards and fobs, in which biometrics is viewed as a secure alternative.

Read more...
PQC, AI & sustainability: five cybersecurity trends for 2024
Editor's Choice
In this article, Nils Gerhardt looks at some of the most important developments that Utimaco experts see coming in 2024, both in technology and the wider world it intersects with.

Read more...
Protecting your business in the digital economy
Editor's Choice
Conducting business in the digital age has never been more challenging. In the Zero Trust cyber security model, nothing is more important than proactively safeguarding enterprise data.

Read more...
The human factor side of video management systems
Leaderware Editor's Choice Surveillance Risk Management & Resilience
A video management system (VMS) is central to, and the most vital element to any control room operation using CCTV as part of its service delivery, however, all too often, it is seen as a technical solution rather than an operational solution.

Read more...
Get the basics right to win more business
ServCraft Editor's Choice Risk Management & Resilience
The barriers to entry in security are not high. More people are adding CCTV and fencing to their repertoire every year. Cowboys will not last long in a space where customers trust you with their safety.

Read more...
All aspects of data protection
Technews Publishing Editor's Choice Information Security Infrastructure AI & Data Analytics
SMART Security Solutions spoke to Kate Mollett, Senior Director, Commvault Africa, about the company and its evolution from a backup specialist to a full data protection specialist, as well as the latest announcements from the company.

Read more...
Global strength, local craft
Impro Technologies Editor's Choice
Impro Technologies is a resounding success story. Started in South Africa, the company remains true to its roots and still designs and manufactures its access control systems and solutions in the country.

Read more...