South Africa unlikely to avoid grey listing due to flaws in financial security system
A new report from Intellidex has identified three issues in South Africa’s financial security systems, which researchers say will be “very difficult” to resolve in time to avoid a greylisting – including staffing issues at the Hawks.
The Financial Action Task Force (FATF)’s mutual evaluation report on South Africa’s system for anti-money laundering, counter-financing of terrorism, and counter-financing of proliferation was released last October.
It identified significant weaknesses and gave South Africa a year to bring the system up to scratch.
If it doesn’t, the country risks a greylisting at the FATF’s next plenary in February.
The Intellidex report showed the odds were not in South Africa’s favour, with the probability of greylisting sitting at 85%.
The FTAF’s mutual evaluation report set out 12 priority actions needed to address the weaknesses it identified in the system.
According to Intellidex, though, only two have been fully implemented.
It further said there had been no notable progress on three.
These include implementing supervision of those working in non-financial professions such as estate agents Krugerrand Dealers and Attorneys, as well as the gathering and dissemination of data on beneficial owners of trusts and companies.
They also include the Hawk’s slow implementation of recommendations to take on more staff, in particular, financial investigators and forensic accountants.
-EWN
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