Anti Money Laundering (AML) in South Africa

Money laundering in the Republic of South Africa is a hot spot for money laundering related activities, including the narcotics trade, smuggling, human trafficking, and diamond dealings. South Africa’s position as the major financial center in the region, its relatively sophisticated banking and financial sector, and its large cash-based market, all make it a very attractive target for transnational and domestic crime syndicates. The South African Government (SAG) estimates that between $2 and $8 billion is laundered each year through South African financial institutions. The Proceeds of Crime Act (No. 76 of 1996) criminalizes money laundering for all serious crimes. This Act was supplemented by the Prevention of Organized Crime Act (no. 121 of 1998), which confirms the criminal character of money laundering, mandates the reporting of suspicious transactions, and provides a "safe harbor" for good faith compliance. Violation of this act carries a fine of up to rand 100 million or imprisonment for up to 30 years.

The Financial Intelligence Centre (FIC) was established in 2001 to act as the primary authority over Anti-Money Laundering (AML) efforts in South Africa. The FIC is responsible for establishing an AML regime and maintaining the integrity of the South African financial system by enforcing recordkeeping and reporting procedures of financial institutions within the country.

The FIC Amendment Act (No. 11 of 2008) was issued in August 2008 and took effect in 2010, and clarified the roles and responsibilities of supervisory bodies. The Money Laundering and Terrorist Financing Control regulations were published in 2002 and have since been amended on various occasions; they create a comprehensive legal framework for the combating of money laundering and terrorist financing.

AML Training in South Africa

The Proceeds of Crime Act and the Prevention of Organized Crime Act require South African financial institutions to create training programs to combat illicit financial transactions from occurring in the country.

The Economy of South Africa

South Africa is considered an emerging market with an abundant supply of natural resources and well-developed financial, legal, communications, energy, and transport sectors. The South African stock exchange, the Johannesburg Stock Exchange (JSE) is ranked 17th largest in the world.

Throughout history, South Africa has played an important role in trade. Cape Town was established in 1652 by Dutch traders and saw much activity in the centuries to follow, particularly with the discovery of diamonds and gold attracting foreigners to the country. However, economic problems exist from the apartheid era, including poverty, a shortage of public transportation, and general lack of economic empowerment among disadvantaged groups.

Banking in South Africa

The South African Reserve Bank is the Central Bank of the Republic of South Africa. The Central Bank is responsible for the country’s monetary policy, as well as bank regulation and supervision in South Africa.

The Reserve Bank also has the sole right to print, issue, and destroy banknotes and coins in South Africa. It issues all new currency through its subsidiaries – the SA Mint Company mints all of the country’s coins while the SA Bank Note Company prints all of the country’s banknotes.

South African Currency

The currency of South Africa is the rand. The South African Reserve Bank is the only issuer of the rand. Coins are available in denominations of ½, 1, 2½, 5, 10, 20 and 50. Banknotes are available in denominations of 1, 2, 10, 20, 50, 100 and 200.

Other Key Statistics of South Africa

Time Zone: SAST (UTC+2).

Location: Southern Africa, at the southern tip of the continent of Africa.

Population: 54,002,000 (2014 estimate).

Capital: Pretoria (executive), Bloemfontein (judicial), Cape Town (legislative).

Languages Spoken: IsiZulu, IsiXhosa, Afrikaans, Sepedi, English, Setswana, Sesotho, Xitsonga.