Government moves to tighten up Anti-Money Laundering Bill before next Financial Action Task Force check-in

South Africa has until May next year to address six action items that were listed by the Financial Action Task Force. With the clock running out, the National Treasury this week has proposed several key amendments to the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill.

The amendments are intended to improve the country’s anti-money laundering and combating terrorism financing (AML/CFT) framework and address deficiencies identified by the Financial Action Task Force. In February 2025 the task force’s Plenary will authorise an on-site visit by the Financial Action Task Force Africa Joint Group to confirm their assessment on the progress of all action items. This will happen around May 2025.

One of the amendments is that the maximum penalty for offences by non-profit organisations has been increased to R1-million, or five years’ imprisonment, or both.

Amendments to the Financial Intelligence Centre Act

• Access to restricted funds: The Financial Intelligence Centre (FIC) Act introduces the Public Procurement Office as an authorised entity to combat corruption and financial crimes. The FIC Act will now include a provision allowing individuals or entities subject to financial restrictions to access funds or financial services specifically for extraordinary expenses. These extraordinary expenses will have to be justified, and then approved by the finance minister. Interest and/or earnings on frozen accounts identified by the UN Security Council will be able to be managed and used under these extraordinary circumstances, further expanding the scope of permissible financial activities under restriction.  This change is intended to address concerns that blanket financial prohibitions could harm legitimate humanitarian or critical needs.


• New technology risks: Before offering a new product or service, institutions are required to conduct a risk assessment for the product, including technology used. Companies will also have to implement measures to manage and mitigate identified risks — and notify the Financial Intelligence Centre and any other authorities of measures they are introducing to address technology-related risks.


• ​Strengthened reporting obligations: Companies are required to scrutinise their client databases to identify any entities or persons listed under notices issued by the Director of the Financial Intelligence Centre. They have to report possession, control, or attempted transactions involving property owned or directed by listed entities or persons within a prescribed period — although the prescribed period has not been specified at this point.

• Deregistration of companies: Previously, the Companies and Intellectual Property Commission (CIPC) could deregister companies for failing to file annual returns or when a company was inactive or dissolved. Now the CIPC can deregister companies that are failing to submit securities registers and/or registers of beneficial interest. Non-compliance for one year or more can trigger deregistration.


• Higher administrative fines: The fines for non-compliance with beneficial ownership reporting and/or submission of securities registers has been hiked up from R1-million to R10-million, or up to 10% of the company’s turnover for the period during which non-compliance occurred, whichever is greater.


• Review of fines: Companies or individuals fined by the CIPC will now have the right to request a review by the Companies Tribunal within 15 business days, or a longer period if justified.

Amendments to the Financial Sector Regulation Act

• Broader licensing requirements: The definition of financial products and services will be broadened to include “arrangements that are similar in nature or have similar outcomes” to traditional financial products or services, regardless of the technology used. This will account for digital financial products, fintech solutions and blockchain-based services. The intention is to ensure that virtual assets or decentralised finance (DeFi), fall under regulatory oversight​.


• This is important because it gives authorities such as the Financial Sector Conduct Authority broader power to require licensing for financial institutions providing innovative products and services, even if these services are already subject to other regulatory requirements.


• Strengthened enforcement powers: Previously regulators could only initiate investigations if a contravention had already occurred. Now regulators will be able to act if a contravention is suspected, likely to occur or in progress. This means they can intervene before significant harm takes place. Regulators will now also be able to demand information directly from significant owners or beneficial owners, and not just from financial institutions. This will ensure greater transparency in cases where ownership structures might conceal illicit activities or financial crimes.