The Draft General Laws (AMLCTF) Amendment Bill, 2024
We all recall the 2022 General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, which significantly changed South African entities' compliance landscape in the past two years. Once again, the changes were necessitated to enhance South Africa's framework for combating money laundering, terrorism financing, and proliferation financing, following the country's greylisting by the Financial Action Task Force (FATF).
Last month the National Treasury published the latest Draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2024 ("GLA Bill") for public comment.
This latest Bill proposes changes to address current legislative gaps and strengthen regulatory compliance across several sectors.
What is Changing?
1. Nonprofit Organisations Act, 1997The amendment introduces a maximum penalty of R1 million- or five years imprisonment for offences under the Act.
2. Financial Intelligence Centre (FIC) Act, 2001Definitions were updated to enhance clarity and strengthen the implementation of anti-money laundering measures.
Section 26A allows sanctioned individuals or entities to access financial services for extraordinary expenses, balancing compliance with operational and humanitarian needs.
Accounts frozen under section 26B before a UN Security Council listing can now accrue interest or earnings, ensuring financial fairness during restrictions.
Increased compliance requirements for accountable institutions include:
Entities authorised to handle cash movement reports must provide these to the FIC within a specified period, improving oversight and accountability.
Accountable institutions must assess and manage risks related to new delivery mechanisms and emerging technologies, which could facilitate money laundering or terrorism financing.
Section 46 updates ensure robust customer verification measures, reducing risks associated with anonymous or pseudonymous clients.
3. Companies Act, 2008Measures to improve Beneficial Ownership Compliance, the amendments provide that the Companies and Intellectual Property Commission (CIPC) is to:
o Deregister companies failing to submit securities or beneficial ownership registers.
o Impose administrative fines of up to R10 million for repeated non-compliance.
To ensure fairness in enforcement, the Bill establishes an appeals process via the Companies Tribunal for companies contesting fines.
4. Financial Sector Regulation (FSR) Act, 2017Enhances consumer protection by updating licensing and market conduct rules, particularly for innovative or emerging financial products and services.
o Offers grants regulators broader powers to collect information from beneficial owners.
o Investigate and enforce compliance within financial institutions.
Public comments on these proposed changes are invited by 6 February 2025 and can be submitted to CommentDraftLegislation@treasury.gov.za. For more details, visit the National Treasury website.
Implications for Accountants
Accountants are advised to prepare for increased scrutiny, particularly regarding compliance with new reporting requirements, risk assessments, and administrative sanctions. Companies relying on nonprofit or financial sector structures should review governance practices to ensure adherence to the updated regulatory standards.
For more information read the Media Release issued by National Treasury.
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