Key Takeaways:
- The South African National Treasury has updated the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024.
- The bill proposes changes to over 10 sections of the Financial Intelligence Centre (FIC) Act to strengthen the country’s AML/CFT system.
- The amendments aim to address regulatory shortcomings, enhance oversight of beneficial ownership structures, and improve monitoring of suspicious transactions.
- The reforms also aim to address emerging risks linked to new technologies used in financial crime.
- The public comment period on the draft bill is open until mid-February, after which the legislation will be refined and submitted to Parliament.
Introduction to the Amendment Bill
The National Treasury of South Africa has updated the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024. The revised bill incorporates amendments related to non-governmental organisations (NGOs) and the conducting of lifestyle audits to continue strengthening the country’s AML/CFT system. The draft Amendment Bill proposes changes to over 10 sections of the Financial Intelligence Centre (FIC) Act, including Section 40, which allows the FIC to share information with the Public Procurement Office and the Border Management Authority.
Proposed Changes to the FIC Act
Some of the key sections that have been proposed for amendment include Section 40, which authorises the FIC to share information obtained through lifestyle audits, and Section 41A, which extends the protection of personal information under the Protection of Personal Information Act, 2013, to additional parts of the FIC Act. These changes are designed to position South Africa for its next FATF Mutual Evaluation, running from mid-2026 to October 2027, while consolidating the reforms that helped the country exit the FATF grey list in 2025.
Strengthening the AML/CFT System
The National Treasury has invited public comment on the draft bill, which aims to address regulatory shortcomings identified in South Africa’s 2021 Financial Action Task Force (FATF) mutual evaluation. The proposals expand the powers of the Financial Intelligence Centre (FIC), the body responsible for identifying and analysing the proceeds of crime. If passed, the legislation would grant the FIC broader authority to collect and share financial intelligence with other state agencies, enhance oversight of beneficial ownership structures, and improve monitoring of suspicious transactions, including those involving non-profit entities.
Addressing Emerging Risks
The proposals also aim to address emerging risks linked to new technologies used in financial crime. The National Treasury said the reforms are part of a broader effort to safeguard the integrity of South Africa’s financial system and maintain alignment with global anti-money-laundering and counter-terrorism financing standards. The reforms are designed to close gaps in South Africa’s financial crime framework and ensure that the country remains compliant with international standards.
Public Comment and Next Steps
Public comments on the draft bill remain open until mid-February, after which the legislation will be refined and submitted to Parliament. The National Treasury has encouraged stakeholders to provide feedback on the proposed amendments, which will help to inform the final version of the bill. Once the bill is submitted to Parliament, it will undergo a rigorous review and debate process before being passed into law. The implementation of the amended legislation is expected to have a significant impact on South Africa’s AML/CFT framework, enhancing the country’s ability to prevent and combat financial crime.
Conclusion
In conclusion, the updated draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024, is a significant step towards strengthening South Africa’s AML/CFT system. The proposed changes to the FIC Act, including the expansion of the FIC’s powers and the enhancement of oversight of beneficial ownership structures, will help to address regulatory shortcomings and emerging risks linked to new technologies used in financial crime. The public comment period provides an opportunity for stakeholders to provide feedback on the proposed amendments, and the final version of the bill is expected to have a positive impact on South Africa’s financial crime framework.
