South Africa’s FSCA Intensifies Efforts Against Money Laundering and Terrorist Financing

South Africa's Financial Sector Conduct Authority (FSCA) is intensifying its efforts to combat money laundering and terrorism financing following criticism from the international Financial Action Task Force (FATF), according to the regulator's commissioner, Unathi Kamlana.

In an interview, Kamlana disclosed that the FSCA is undergoing a significant expansion, with plans to increase staff and conduct more investigations. The regulator has allocated three times its previous budget for the 2023-24 fiscal year to finance this expansion, which is aimed at addressing deficiencies highlighted by the FATF.

Over the past two financial years, the FSCA has substantially bolstered its supervisory capacity, with plans for further expansion in the coming years. Kamlana indicated that the authority expects to have approximately 36 personnel by 2025, a significant increase from the current count of seven.

The FSCA has experienced a 300% surge in supervisory activities in the current financial year, with intentions to impose more substantial fines for violations of anti-money laundering and terrorist financing regulations.

Kamlana noted that financial institutions have shown cooperation in addressing the issues surrounding South Africa's grey listing by the FATF. He expressed optimism about making further progress in addition to the strides already made.

Moreover, the FSCA is extending its regulatory oversight to cryptocurrencies, following their inclusion within its jurisdiction in 2022. Kamlana revealed that the authority has received around 340 applications for cryptocurrency licenses, including those for exchanges, and is currently evaluating them.

"We expect that sometime in March we should be able to license maybe 60 or so of those and then proceed with others," Kamlana stated.

Meanwhile, the National Treasury announced that the FATF confirmed the resolution of five out of the 22 identified actions, acknowledging South Africa's progress. However, addressing the remaining 17 action items by February 2025 poses a significant challenge.

"While South Africa is on track to address all the outstanding action items, it remains a tough challenge to address all 17 of the remaining action items by February 2025," the Treasury remarked.

By fLEXI tEAM