South Africa’s financial system is being overhauled, with parliament in the process of introducing various amendments to critical business legislation.
The new bills, recently approved by Cabinet, include provisions which focus on strengthening the methods of mitigating financial crime, altering workplace transformation laws and making it easier to do business – to name a few.
The government has been working in a flurry to ensure that a deadline set by the international watchdog, the Financial Action Task Force (FATF), is met in order to avoid a possible greylisting that might make doing business more challenging.
The FATF is an international body for setting standards and promoting anti-money laundering and counter-terrorism financing that has made recommendations to South Africa in terms of what has to change. It found that the county’s financial legislation had gaps that allowed for money laundering and other financial crimes to occur.
South Africa has until the end of October 2022 to prove to the FATF that it has policies to meet the recommendations.
The Parliamentary Monitoring Group (PMG) lists over 53 bills at various stages of the parliamentary process of passing through either the National Assembly or the Nationals Council of Provinces and finally assented to by the President.
Below are some of the key laws currently going through the legislative process that will be taken into consideration or passed in the upcoming months.
In light of a possible greylisting, finance minister Enoch Godongwana recently tabled the Anti-Money Laundering and Combating Terrorism Financing Amendment Bill.
Once in law, according to the National Treasury, it will align the country with some of the recommendations made by the FATF and further improve its resilience to financial crime and corruption.
This bill will amend the following other pieces of legislation that deal with specific sectors:
- Trust Property Control Act;
- Nonprofit Organisations Act;
- Financial Intelligence Centre Act;
- Companies Act, and;
- Financial Sector Regulation Act.
This amendment bill expands on the General Laws Amendment bill and aims to address shortcomings in at least 14 of the 20 suggestions the FATF gave, including a proper improvement of the authority and practices of regulatory authorities.
The purpose of this money bill is to enable the implementation of new financial industry charges. This bill requires banks and other government-regulated financial services companies, such as life insurance entities, to pay annual levy fees.
The levy is one of the supervisory mechanisms the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) use to monitor and preserve the nation’s financial stability.
Depending on the type of supervised entity, each payment made by that entity can be as much as R45,000,000 for large banks or as little as R1,000 for smaller banks.
This private members bill was introduced to specifically deal with Regulatory Impact Assessments (RIA) and the cost of new regulations on the economy.
The bill will introduce measures to look into the financial implications of new legislation and improve the effectiveness and efficiency of government interventions.
It said that conducting an evaluation of regulatory measures allows for increased competitiveness by reducing regulatory burdens, increased accountability for decision-makers and more transparency when developing regulatory measures – among others.
The amendments under this bill will give the employment and labour minister power to regulate sector-specific employment equity targets and regulate criteria regarding the issuing of compliance certificates.
The deputy director-general of Labour Policy and Industrial Relations, Thembinkosi Mkalipi, said that even businesses that do not necessarily deal directly with the state would need to comply with the laws.