Turning Compliance into Competitive Advantage in a Post-Greylisting Era

We all recall that in February 2023, the FATF grey listed South Africa. The FATF identified the deficiencies and the requirement for South Africa to implement a robust strategy to counter terrorism financing, enhance the anti-money laundering efforts, and improve the investigation and prosecution of complex financial crimes.

In FSCA`s response to this grey listing, the FSCA said that these new sanctions serve as reminders that it “will not tolerate non-compliance with the FIC Act and all accountable institutions are urged to continually review and enhance their anti-money laundering and terrorist financing controls at the highest levels and to conduct thorough risk assessments on a regular basis. Failure to do so will result in firm regulatory action.”

Despite the clear warning by the FSCA and FIC, we have seen that the FSCA has been clamping down on accountable institutions and individuals that did not pay sufficient attention to the warning by the increased number of sanctions.

Accountable institutions can better understand these regulatory requirements and mitigate money laundering and terrorist financing risks through the effective implementation of an adequate risk management and compliance programs (RMCPs), as required by Sections 42(1) and (2) of the Act. By enhancing and implementing an effective (RMCP) it not only assists accountable institutions to protect and maintain the integrity of their own businesses, but it most certainly helps with the integrity of the South African financial system.

In addition, a well-structured due diligence process of an accountable institutions client basis is critical to identify and mitigate against any form of suspicious and criminal elements from infiltrating the financial system, in South Africa.

You are welcome to reach out to Milco Hertz at milco@hertzconsulting.co.za should you require any assistance/guidance.