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Treasury calls for comments on draft money laundering regulation amendments

10th April 2024

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

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To download a copy of the draft amendments, click here.  (0.14 MB)

Finance Minister Enoch Godongwana has invited public comments and written submissions on draft amendments to the Money Laundering and Terrorist Financing Control Regulations of the Financial Intelligence Centre Act (Fica) by April 19.

The draft amendments are aimed at strengthening South Africa’s system to combat money laundering and terrorist financing by enhancing the reporting of the conveyance of cash or bearer negotiable instruments into or out of the country, Treasury said in a statement on April 10.

The proposed draft amendments, gazetted on April 8, are aimed at strengthening the country’s financial system and improving its resilience against abuse by money launderers and terrorist financiers.

It is critical to the effectiveness of the Financial Intelligence Centre’s (FIC's) operational capabilities that the information it receives concerning cross-border financial flows be expanded to include cross-border movement of cash and bearer negotiable instruments.

This is envisaged to strengthen the FIC's ability to detect possible suspicious or unusual activity and to disseminate the relevant information to investigating and prosecuting authorities, Treasury said.

The proposed regulations aim to prescribe a threshold amount that will trigger reporting under Section 30 of the Act, and to prescribe the information that must be included in a report on the conveyance of cash or bearer negotiable instruments.

The proposed regulations also aim to specify the person who is authorised by the Minister to receive a report under Section 30.

Section 30 of Fica empowers the Minister to prescribe a threshold amount that will trigger reporting under this Section. The Minister sets this amount through regulations that will support the implementation of reporting under Section 30.

The Minister proposes that the threshold for reporting under Section 30 be set at R24 999.99. This means that persons who convey R25 000 or more into or out of the Republic will be required to report this under Section 30, Treasury said.

Further, Section 30 also empowers the Minister to prescribe the information that must be included in a report on the conveyance of cash or bearer negotiable instruments. This information must be sufficient to provide the FIC with the necessary transparency and traceability information concerning the cross-border movements of cash and bearer negotiable instruments.

"A report under Section 30 must be made to a person who is authorised by the Minister to receive such a report. The Minister, after consulting with the South African Revenue Service (Sars), has determined that reports under Section 30 can be integrated in reporting under the Customs and Excise Act of 1964.

"To this end, the Minister intends to authorise customs officers to receive reports on the conveyance of cash or bearer negotiable instruments, either physically at ports of entry and exit, or electronically through the traveller declarations system that Sars has developed for this purpose," Treasury said

The draft amendments are proposed to be made in terms of Section 77 of Fica, read with Section 30, to the Money Laundering and Terror Financing Control Regulations. Section 30 provides for a requirement to report the conveyance of cash or bearer negotiable instruments into or out of South Africa to the FIC.

"The objective of Section 30 is to ensure that information relating to the cross-border movement of cash and bearer negotiable instruments is made available to the FIC.

"The FIC currently receives reports on cross-border electronic funds transfers. In addition, it receives reports on large cash transactions, suspicious or unusual transactions and property that is linked to persons or entities who are subject to targeted financial sanctions," Treasury said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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