SA aims to fix money laundering rules by year-end

‘Changing our laws and regulations will be tough, but that’s the easy part,’ Momoniat said.
Image: Guillem Sartorio/Bloomberg

The head of South Africa’s National Treasury said he is “pretty confident” the country will have addressed regulatory weaknesses in its money laundering controls by year-end, a move that should help avert its inclusion on a global watchdog’s list of nations that are subjected to greater oversight due to their shortcomings in tackling illicit finance.

Africa’s most industrialised economy was found wanting in all 11 of the Paris-based Financial Action Task Force’s effectiveness measures to combat money laundering and the financing of terrorism, Ismail Momoniat, the National Treasury’s acting director general said in an interview on SAfm radio on Tuesday.

Read: FATF warns SA government to improve monitoring and prosecuting of financial crimes to avoid the ‘grey list

“Changing our laws and regulations will be tough, but that’s the easy part,” Momoniat said. “The tough part comes in that six of those measures are related to how we investigate such crimes — whether we have enough prosecutions on money laundering, whether we deal with terror financing when people are designated by the United Nations or by other measures — and so in our criminal justice sector, we have to have a significant turnaround in terms of effectiveness”.

While it will take about three years to effect all necessary changes, the country must “demonstrate that we’ve got a credible action plan, that we’ve taken meaningful steps already by February,” to avert being added to the watchdog’s so-called gray list, he said.

The central bank has previously warned the classification could have wide-reaching consequences for South Africa’s financial system.  Besides causing it reputational damage, it could lead to capital and currency outflows, and transactional, administrative and funding costs for banks could increase, it said.

Read: SA can only recover in a post-ANC world

While South Africa was “undoubtedly one of the most corrupt countries in the world” when the FATF evaluation was carried out in 2019 following an era of endemic graft known locally as state capture, there’s now strong political support to tackle weaknesses in illicit financing controls, according to Momoniat.

“We are doing this, not only because we want to meet standards, but because it’s in our direct interest to be able to deal with financial crimes and to deal with criminal syndicates because they are clearly impacting the ability of government to deliver services to our people,” he said.

© 2022 Bloomberg

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There are no incentives for the ANC to fix money laundering rules. On the contrary, the effective enforcement of the existing money laundering legislation will remove all the reasons for being a member of the ANC in the first place.

As a member of a criminal enterprise, being totally dependent on the patronage network that syphons taxpayer money into your pocket, you don’t want money-laundering rules to break your speed.

Zuma said it in parliament – “corruption is a Colonial concept.”

Fine the actor’s, including the banks, for the money laundering crimes committed.

End of comments.

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