National Treasury sets aside R265 million to get SA off grey list

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Finance Minister Enoch Godongwana says efforts to get the country off the global Financial Action Task Force (FATF) grey list are well underway, with the Financial Intelligence Centre (FIC) allocated more than R265 million over the medium-term.

Delivering his Budget Vote speech in Parliament on 16 May, Godongwana said that this forms part of the response measures to the recent placing of the country on the FATF’s grey list in February for falling short of certain international standards for the combating of money laundering and other serious financial crimes.

“As part of the response measures to the recent placing of the country on the grey list, the Financial Intelligence Centre has been allocated additional funding of more than R265 million over the medium-term to implement the Financial Action Task Force’s recommendations and get the country off the grey list,” Godongwana said.

Godongwana said that government will implement the Financial Action Task Force’s recommendations, with his department providing periodic updates to Cabinet on progress.

Last year, the Minister said, government led an unprecedented process to pass an omnibus of statutory amendments that address the gaps in SA’s anti-money laundering regime.

“The National Treasury, as the lead in the Interdepartmental Committee on Anti-Money Laundering and the Combating of the Financing of Terrorism, continues to coordinate government-wide efforts to comprehensively address the remaining weaknesses in our legal system,” he said.

Godongwana said one of the many examples is the frozen assets of individuals and entities designated by the United Nations to be linked to ISIS, the Taliban and al Qaeda.

He said that they have updated and strengthened systems for supervising non-financial businesses that are at risk of being used for money laundering or the financing of terrorism.

“We have also strengthened the systems needed to identify the beneficial owners of business and trusts, so that they cannot hide behind the veil of corporate secrecy when engaged in money laundering.”

Godongwana said these updates have been submitted to the FATF and a positive re-ratings of the country’s technical compliance with FATF standards can be expected in the next six months.

FATF assessed South Africa needed to make further and sustained progress addressing eight areas of strategic deficiencies related to the effective implementation of South Africa’s anti-money laundering/combating the financing of terrorism (AML/CFT) laws set out in the FATF statement.

President Cyril Ramaphosa earlier this year said most deficiencies relate to implementation of laws. For example, the country needs to be able to demonstrate, among others, an increase in 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 effective implementation of targeted financial sanctions.