This note was prepared by Richard Lalonde and Ke Chen, LEG, IMF.
Similar actions are recommended with regard to legal arrangements, although staff’s review did not cover them.
The Mutual Evaluation Report (MER) was adopted and published in 2009.
The FATF revised the AML/CFT standard in 2012, and the assessment methodology in 2013. The latter places greater focus on assessing the effectiveness of countries in identifying, managing, and mitigating the money laundering and financing of terrorism risks they confront.
Under current FSAP policy, every FSAP should incorporate timely and accurate input on AML/CFT. Where possible, this input should be based on a comprehensive AML/CFT assessment conducted against the prevailing standard. In instances where a comprehensive assessment against the prevailing standard is not available at the time of the FSAP, as is the case with South Africa, staff may derive key findings on the basis of other sources of information, including already available information or information obtained in the context of the FSAP.
As suggested in the FATF Guidance on National Money Laundering and Terrorist Financing Risk Assessment, risk can be seen as a function of three factors: threat, vulnerability, and consequence. In the AML/CFT context, threat includes criminals, terrorist groups and their facilitators, their funds, as well as past, present, and future ML or FT activities. Vulnerabilities represent weaknesses in AML/CFT systems or controls or certain features of a sector, a product/service or a country. Consequence refers to the impact or harm that ML or FT may cause and includes the effect of the underlying criminal and terrorist activity on financial systems and institutions, as well as the economy and society more generally.
See paragraph 12 of the MER.
Beneficial owners refer to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted.
This also includes the BSD’s oversight of banks’ compliance with the FIC Act with respect to wire transfers in cooperation with the National Payment System Department of the SARB.
See results of Finscope Survey of South Africa 2013: http://www.finmark.org.za/blog/publication/results-of-finscope-south-africa-2013/
See footnote 5 above for more explanations of ML/FT risks in the context of an NRA.
PCCs provide guidance on the FIC’s interpretation of the FIC Act. This form of guidance has the same legal status as the guidance notes. PCCs are an added platform to address contentious issues that arise around the interpretation of the FIC Act.
The new Companies Act that took effect in 2008 does not allow for the creation of close corporations, which were allowed for under the previous legal framework. However the existing close corporations remain operational under the new Act.
Other government agencies that are members of ACTT are: Special Investigation Unit, South Africa Revenue Services, Department of Public Service and Administration, National Intelligence Coordinating Committee, and State Security Agency.