The Department of Trade and Industry campus in Hatfield, Pretoria, where the Companies and Intellectual Property Commission (CIPC) is located. Picture: Supplied
South Africa is making headway to be removed from the Financial Action Task Force (FATF) greylist, the Companies Intellectual Property Commission (CIPC) told the Portfolio Committee on Trade and Industry on Wednesday.
South Africa was grey listed in in February 2023 and has been focused on implementing reforms to get of the list.
CIPC said it has resolved two key deficiencies related to the Beneficial Ownership Register (BOR), ensuring that competent authorities have timely access to prosecute cases involving money laundering and terrorism financing, as well as the capacity to impose remedial sanctions.
Greylisting means that a country is under increased monitoring by the FATF due to certain deficiencies in its anti-money laundering and combating the financing of terrorism and proliferation financing framework.
Greylisting typically impacts an economy through various channels, including GDP, government funding costs, exchange rates, cross-border transactions, and capital markets.
CIPC Commissioner Rory Voller said the current conference ongoing in Paris would likely make a pronouncement about South Africa's greylisting in the next couple of days and felt positive that the 18 months of work on the aspects that concerned the CIPC had been addressed.
“We would not like it to go out until the National Treasury makes a positive pronouncement in the next couple of days once the Paris meeting is concluded and, therefore, they will put out a large media release. We are quite confident of this because we heard a regional review during January and assessors basically will come back to us as far as that is concerned,“ Voller said.
In an update in October, National Treasury said the FATF Plenary had announced nine upgrades for South Africa from its 22-item Action Plan, including eight to "largely addressed" and one to "partly addressed".
South Africa is now deemed to largely or fully address 16 of the 22 action items in its Action Plan, leaving the country with six outstanding action items to be addressed for the last scheduled reporting cycle, concluding in February 2025.
Voller said the BOR, which had to be established last year as part of the requirements, now had more than 1.1 million disclosures with more being received on a daily basis, which was an indicator that compliance with the companies act was picking up.
He said the CIPC had found serious challenges with getting entities, including the Banking Association of South Africa, to get involved in making the assessments.
"There is a lot of business intelligence built into the back-end to do our assessments, do some on a sample basis. At the next peer review, we will do more triangulation, with more eyes watching the data, but it is taking time to get other entities involved. We tried for a very long time to get the Banking Association involved; they use the POPIA act as a hindrance to looking at some of the data, but we are trying to get beyond that. I just had a meeting with the information regulator a few weeks back to make sure we get what we are eyeing for, so we can see what is missing and for us to make sure that we have a review on the assessments," he said.
He said there was a further proposed additional amendment in the companies act for the CIPC to have the power to fine, and that is going out for public consultation as part of the FATF requirements.
He said another part of the fix included legislative amendments, some of which have been addressed through an omnibus bill for amendment to the companies act that gives the CIPC power to update the BOR register.
"Law enforcement have been on-boarded for access to the BOR register; they currently conduct searches, and we have gone through training of law enforcement agencies, investigators, prosecutors, and the like. One of the areas we have to show and prove was that not only do we have a BOR register, but that law enforcement and agencies can access it and use that information on the register to prosecute money laundering and terror financing cases," he said.
In another development, Joey Mathekga, a senior manager at the CIPC, said the entity still pursued investigations on the state capture cases, and that matters from Transnet, South African Airways, Alexkor, and Eskom had been referred to the State Attorney.
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