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All Accountable Institutions as per Schedule 1 of the FIC Act and subsequent FIC PCC and FIC Guidance Notices briefly grouped as follows:

  • Credit Providers: An entity who carries on the business of a credit provider or of providing credit in terms of any credit agreement whether included or excluded in the National Credit Act.
  • Financial Institutions: Commercial and Investment Banks, Insurance Companies, Pension funds, Building societies or any organization that handles the processing of insurance related funds.
  • Money or Value Transfer Service Providers: Money Transfer agencies, Foreign Exchange dealers, Payment service providers, Electronic Wallet service Providers, TPPP or any institution that does execution of payment transactions.
  • Virtual Asset Service Providers: Cryptocurrency exchanges, Virtual asset wallet providers, crypto currency traders and brokers.
    Property and Legal Services: Attorneys, Conveyancers, Notaries and Estate agents.
  • Gambling and Gaming: Casinos, Betting institutions, Online gambling platforms.
  • High-Value Goods Dealers Auctioneers: All institutions that deals in goods with a value exceeding R 100 000 including, vehicle dealers, jewellers, art dealers, auction houses with valuable items.
  • Investment and Asset Management: Asset management companies, investment advisory firms, hedge funds, private equity firms, collective investment schemes.

The “greylist” refers to a list maintained by the Financial Action Task Force (FATF), an international organization that sets standards for anti-money laundering (AML) and counter-terrorism financing (CTF). When a country is placed on the greylist, it means FATF has identified deficiencies in its AML and CTF regimes and has encouraged it to take corrective measures.

South Africa is on the FATF greylist due to concerns related to:

  • Insufficient regulations and enforcement against money laundering.
  • Weaknesses in oversight of certain financial sectors.
  • Risks of illicit financial activities and non-compliance with international standards.
  • Impact on the South African economy:

 

  1. Reduced Foreign Investment: Investors may see greylist countries as higher-risk, leading to hesitancy or reduced investment.
  2. Financial Sanctions or Restrictions: International banks and financial institutions may impose stricter due diligence, making transactions more cumbersome.
  3. Reputation Damage: The greylist can tarnish South Africa’s reputation as a stable, compliant financial jurisdiction.
  4. Increased Compliance Costs: Local financial institutions may face higher costs to ensure compliance with international AML/CTF standards.
  5. Potential for Further Sanctions: In some cases, being greylisted can precede blacklisting if issues are not addressed.

No. The required financial compliance and administration may get South Africa removed from the greylist, but in order for South Africa to stay off the list, continuous compliance and alignment with the changes in the evolving internation fight against financial crime will keep South Africa off the greylist.

If you are an Accountable Institution, YES.

The Financial Intelligence Centre (FIC) issued Directive 8 of 2023 which requires accountable institutions to screen their employees for competence and integrity, as well as to scrutinise employee information against the targeted financial sanctions lists, in order to identify, assess, monitor, mitigate and manage the risk of money laundering, terrorist financing and proliferation financing.

The Directive was issued in response to the deficiency identified and the associated recommended action 18.1b as provided by the Financial Action Task Force (FATF) Mutual Evaluation Report of South Africa. This addresses the issue that there were no procedures regarding screening for employees noted in the FIC Act or the guidance notes issued by the FIC. Screening of employees must now be used as an internal control measure aimed at mitigating the risk of accountable institutions being abused by criminals who are either prospective employees, current employees or by persons that may influence employees.

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