The head of South Africa\u2019s National Treasury said he is \u201cpretty confident\u201d the country will have addressed regulatory weaknesses in its money-laundering controls by year-end, a move that should help avert its inclusion on a global watchdog\u2019s list of nations that are subjected to greater oversight due to their shortcomings in tackling illicit finance.<\/p>\n
Africa\u2019s most industrialized economy was found wanting in all 11 of the Paris-based Financial Action Task Force\u2019s effectiveness measures to combat money laundering and the financing of terrorism, Ismail Momoniat, the National Treasury\u2019s acting director-general said in an interview on SAfm radio on Tuesday.<\/p>\n
\u201cChanging our laws and regulations will be tough, but that\u2019s the easy part,\u201d Momoniat said. \u201cThe tough part comes in that six of those measures are related to how we investigate such crimes – whether we have enough prosecutions on money laundering, whether we deal with terror financing when people are designated by the United Nations or by other measures – and so in our criminal justice sector, we have to have a significant turnaround in terms of effectiveness.”<\/p>\n
While it will take about three years to effect all necessary changes, the country must \u201cdemonstrate that we\u2019ve got a credible action plan, that we\u2019ve taken meaningful steps already by February,\u201d to avert being added to the watchdog\u2019s so-called grey list, he said.<\/p>\n
The central bank has previously warned the classification could have wide-reaching consequences for South Africa\u2019s financial system. Besides causing it reputational damage, it could lead to capital and currency outflows, and transactional, administrative and funding costs for banks could increase, it said.<\/p>\n
While South Africa was \u201cundoubtedly one of the most corrupt countries in the world\u201d when the FATF evaluation was carried out in 2019 following an era of endemic graft known locally as state capture, there\u2019s now strong political support to tackle weaknesses in illicit financing controls, according to Momoniat.<\/p>\n
\u201cWe are doing this, not only because we want to meet standards, but because it\u2019s in our direct interest to be able to deal with financial crimes and to deal with criminal syndicates because they are clearly impacting the ability of government to deliver services to our people,\u201d he said.<\/p>\n