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FIC: Draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill 2024
- 06 January 2025
- Regulatory Compliance and Legislation
- South African Accounting Academy
Summary:
National Treasury is inviting comments on the Draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill (GLAB) 2024, which was finalised over the festive season and specifically deals with various technical amendments related to strengthen the country's anti-money laundering and anti-corruption laws.
Article:
The draft Amendment Bill was finalised by National Treasury together with the Department of Trade, Industry and Competition, the Department of Social Development and the Financial Intelligence Centre, and comprises 26 Clauses.
The draft Amendment Bill seeks to strengthen the country’s Anti-Money Laundering and the Combating of the Financing of Terrorism system further, by addressing deficiencies in the legal framework, as identified during the remedial processes to exit greylisting and improve technical compliance with Financial Action Task Force (FATF) Recommendations, and to better prepare South Africa for the next mutual evaluation to be conducted in 2026/27.
It proposes amendments to 4 pieces of legislation, namely:
- the Financial Intelligence Centre Act, 2001 (FICA)
- to amend and insert a certain definition;
- to require the Director to give notice pursuant to an order in terms of section 23 of the Protection of Constitutional Democracy against Terrorist and Related Activities Act, 2004 (Act No. 33 of 2004);
- to expand the circumstances under which a person or entity referred to in section 26A may be permitted provision of financial services to include providing for extraordinary expenses;
- to provide for the accrual of interest or other earnings due on accounts holding property affected by a prohibition under section 26B that arose before the date on which the person or entity was identified by the Security Council of the United Nations;
- to require the person authorised by the Minister to receive a report relating to the conveyance of cash to or from the Republic to send a copy of the report to the Centre within a prescribed period;
- to require accountable institutions to take into account the risk of new delivery mechanisms and the use of new or developing technologies which may involve or facilitate money laundering activities, the financing of terrorist and related activities or proliferation financing activities.
- Sections to be amended include:
- Those to deal with minor deficiencies relating to targeted financial sanctions in sections 26A, 26B, 28A and 51A;
- Section 42 of the FIC Act to address minor deficiencies identified with respect to new technologies;
- Section 46 of the FIC Act to address a deficiency relating to customer due diligence measures for anonymous clients
- the Financial Sector Regulation Act, 2017 (FSR Act) (Sections 2, 3, 58, 106, 108, 111, 131 and 135)
- to provide for the circumstances under which new services are expanded to include arrangements that are similar in nature or have similar outcomes as financial products and services;
- to ensure that the responsible authority may license financial institutions that are providing financial products and financial services, including new services despite existing licensing requirements in other legislation;
- to empower financial sector regulators to obtain information from significant owners or beneficial owners;
- to empower financial sector regulators to institute an investigation under certain circumstances;
- to exclude transactions concluded under a ‘master agreement’ as defined in section 35B(2) of the Insolvency Act, 1936 from the application of a certain section.
- the Companies Act, 2008 (Sections 82 and 175)
- to empower the Commission to deregister a company that fails to submit a securities register within a certain period;
- to empower the Commission to impose administrative penalties;
- to empower the Companies Tribunal to review a decision of the Commission to impose an administrative fine.
- the Nonprofit Organisations Act, 1997 (NPO Act)
- to provide for maximum penalties for offences (Section 30).
Interested parties are invited to submit their written comments to the National Treasury at [email protected] by 6 February 2025.
The GLAA 2024 will become effective on a date determined by the President by proclamation in the Gazette.
Click here to download the 21-page Draft Bill and Memorandum on Objects:
Relevance to Auditors, Independent Reviewers & Accountants:
- AML legislation (including FICA) is very important legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- Auditors, Independent Reviewers and Accountants should be aware of the latest amendment bills on Anti-Money Laundering and the Combating of the Financing of Terrorism.
- An awareness of publications issued by regulators, such as the FIC, is vital to remain informed.
- As an accountable institution, a business owner and individual, you need to be aware of developments in respect of our country’s greylisting, as well as the relevant legislation updates in this regard.
Relevance to Your Clients:
- An accountable institution, as well as an entity (company or close corporation), has a duty to comply with the FICA, otherwise they could be held liable.
- Accountable institutions should be aware of the latest amendment bills on Anti-Money Laundering and the Combating of the Financing of Terrorism.
- An awareness of publications issued by regulators, such as the FIC, is vital to remain informed.
- As an accountable institution, a business owner and individual, you need to be aware of developments in respect of our country’s greylisting, as well as the relevant legislation updates in this regard.