Abstract
This paper emanated from the recent Financial Action Task Force (FATF) mutual evaluation of South Africa’s anti-money laundering legislation. The outcome of the assessment has highlighted the dire consequences of state capture and the current state of our anti-money laundering legislation and level of implementation thereof.
South Africa is in the spotlight and once again not for the right reasons. Both government and the private sector such as the banks have scrambled to remediate or at least try to show cause to avoid being grey listed.
This paper analyses the FATF mutual evaluation assessment (past and present) relating to the Risk Based Approach and the Ultimate Beneficial Ownership requirement the challenges faced in the banking sector and governments response.
The purpose of the paper is to establish whether the FATF mutual evaluation assessment correctly identified the ultimate beneficial ownership issue facing South Africa and whether the country will be able address these observations within the short time allocated to remediate and avoid being grey listed.
Ultimately, the paper establishes through analysis of past South African mutual evaluations, that the FATF had previously raised the ultimate beneficial ownership requirement as a theme requiring attention in South Africa’s fight against money laundering. Our progress as a country has been slow and tedious up until now. The adverse effect of the potential grey listing has spurred on amendments to legislation and shaken the government to take action. However, whether this is enough to deter the grey listing of the country is still to be seen.