Estate agents, lawyers, trust services and company services providers have been tardy in their more than a year late submissions to the Financial Intelligence Centre (FIC) and this is standing in the way of South Africa exiting the grey list of the international Financial Action Task Force (FATF).
“There appears to be wilful non-compliance by businesses in these sectors, despite repeated calls and appeals for them to complete and submit their long outstanding (questionnaires) to the FIC,” Christopher Malan, executive manager for compliance and prevention at the FIC, said.
The FIC said “certain designated non-financial businesses and professions (DNFBPs) are continuing to ignore FIC directives aimed at helping South Africa exit the grey list of the FATF ... These institutions now face targeted inspections or targeted sanctions for their non-compliance.”
The FIC had asked these businesses to submit answered questionnaires in March last year, with a May 31, 2023 due date.
Dealers in precious stones, in precious metals, credit providers and crypto asset service providers were also asked to submit their questionnaires by July 31, 2023, and these were also still outstanding.
At a FATF meeting in June, South Africa reported on how it had started addressing the deficiencies found in its measures for combating money laundering and terrorist financing.
The FATF acknowledged that the FIC had made progress in understanding the risks, but it remained concerned about the low rates of compliance in terms of the return of questions submissions to the FIC by DNFBPs.
The questionnaire assists businesses to identify the risks they face of money laundering and terrorist finance abuse. Once received, the FIC uses an assessment tool to evaluate the questionnaires.
“This informs the FIC’s supervisory approach, which includes inspections on high-risk entities.”
Casinos had submitted their questionnaires to the FIC. The FIC said businesses that had not submitted their questionnaires were positioning themselves to have administrative sanctions imposed.
“The current low response levels mean that the country is unable to show sufficient progress in fully addressing the FATF-identified deficiency that DNFBPs are unable to identify their money laundering and terrorism finance abuse risks,” said Malan.
BUSINESS REPORT