Is it working?

The act represents a significant shift in the country’s company law but it is not evident that it will combat money laundering or terrorist financing. Despite these legislative advancements, the main concern remains on implementation of these laws. In particular, SA needs to demonstrate that the laws are being enforced effectively with more investigations, prosecutions and convictions for financial crimes. The FATF’s recent upgrades indicate that the Amendment Act has significantly improved South Africa’s compliance with AML/CFT standards. By strengthening the legal framework, the act has empowered regulatory and law enforcement agencies to enforce AML/CFT measures more effectively, which has contributed to the positive compliance trend. Full compliance with FATF standards will require consistent application and enforcement of the legislative changes outlined in the Amendment Act. The FATF has emphasised that South Africa must demonstrate the effectiveness of these legal reforms by showing increased enforcement actions, successful prosecutions and measurable compliance improvements across all sectors. Continued effectiveness will depend on the operational capacity of supervisory and law enforcement agencies to apply the new legal provisions, which include ongoing training and resourcing to ensure they can implement the act’s requirements comprehensively. The next FATF evaluation cycle in February 2025 will be critical for demonstrating the sustained impact of these legislative changes.

Actions

Enacted into law.

Are there plans?

Important policy towards addressing identified deficiencies particularly in anti-money laundering legislation and will contribute to combating corruption.

Is it on the agenda?

Combating money-laundering and terrorism financing crimes, with progress monitored by the Financial Action Task Force (FATF).

Goals

The act is part of efforts to address the concerns of the global community about South Africa's grey listing. Particularly, it addresses deficiencies relating to the adequacy of laws and legal frameworks related to the 40 FATF Recommendations identified in the 2021 Mutual Evaluation Report.

Departments / Govt Institutions

National Treasury

Is it working?

To achieve full compliance, South Africa will need to demonstrate that the amendment act is applied consistently and effectively, with evidence of increased investigations, successful prosecutions and asset freezing related to terrorist financing cases. The FATF has highlighted the importance of operationalising these legal reforms, particularly through targeted actions within high-risk sectors like NPOs. The FATF’s recent upgrades reflect the initial effectiveness of the amendment act in improving South Africa’s response to terrorism financing risks. The expanded definitions and enhanced powers for law enforcement agencies have helped address some of the FATF’s concerns regarding the legal framework for combating terrorist financing. Ongoing effectiveness will depend on the ability of regulatory bodies and law enforcement agencies to work collaboratively in enforcing the act’s provisions. This will require regular training, sufficient resources and streamlined coordination mechanisms, especially as South Africa approaches the next FATF evaluation in February 2025.

Actions

Enacted into law. The Amendment Act expands the definitions and legal scope of terrorist acts, enabling law enforcement to tackle a wider range of terrorist financing activities, including those conducted through unregulated or informal channels. The act mandates stronger monitoring and reporting requirements for NPOs, particularly those at risk of misuse for terrorist financing, and requires NPOs to conduct due diligence, maintain transparency and report suspicious transactions. This directly addresses the FATF’s concerns about vulnerabilities within the NPO sector. The act also grants additional powers to the South African Police Service and the Financial Intelligence Centre for investigating terrorism financing, including provisions for freezing assets linked to terrorist activities. These measures are intended to disrupt financial networks that may support terrorism and ensure that authorities can respond swiftly to such risks. Further, the act introduces severe penalties for terrorism activities, including financial penalties and prison sentences, to deter such activities and strengthen South Africa’s enforcement capacity.

Are there plans?

Important to strengthen the fight against terrorism, and also to assist the country in meeting the international standards on AML/CFT.

Is it on the agenda?

The act aligns with international instruments relating to counter-terrorism, (Chapter VII of the United Nations Charter) and the United Nations Security Council Resolutions.

Goals

The Protection of Constitutional Democracy against Terrorist and Related Activities Amendment Act 23 of 2022, which is also referred to as the counter-terrorism law, forms part of efforts to get SA off the FAFT's grey list. This law amended the Protection of Constitutional Democracy against Terrorist and Related Activities Act 2004 to serve as a new model for legislation regarding counter-terrorism as required by the report of the United Nations Counter-Terrorism Executive Directorate (UNCTED).

Departments / Govt Institutions

Department of Justice and Constitutional Development National Treasury