Designated non-financial businesses & professions boost SA’s grey list exit

Positive efforts by designated non-financial businesses and professions registered with the Financial Intelligence Centre are contributing significantly to bringing South Africa closer to exiting the FATF grey list. These efforts include legal practitioners, estate agents, accountants, and precious stones and metals dealers. Despite progress made to comply with laws aimed at curbing money laundering and terrorist financing, more work and urgency are needed, according to a statement released by the Financial Intelligence Centre. Christopher Malan, Executive Manager, Compliance & Prevention at the Financial Intelligence Centre, discussed the progress being made in an interview with CNBC Africa. Malan emphasized the importance of continued compliance from various business sectors to ensure a smoother exit from the FATF grey list. According to Malan, most of the positive responses have been from the trust service sector, while there is a need for urgency in ensuring businesses comply with risk and compliance requirements. Malan also highlighted the need for entities that have not yet submitted their risk and compliance information to do so urgently to improve the current 70 percent compliance rate. The Financial Intelligence Centre is aiming for closer to 100 percent compliance for a successful exit. Malan acknowledged that completing the risk and compliance forms can be detailed but reiterated the importance of understanding and addressing money laundering and financing risks. By encouraging compliance and emphasizing the significance of reaching higher compliance rates like 9 out of 10 or ideally 10 out of 10, Malan believes South Africa can make significant progress in exiting the grey list. The release by the Financial Intelligence Centre detailed the level of returns submitted by lawyers, estate agents, accountants, and dealers in precious metals and stones. While progress has been made in sectors like trust services and precious metals, there is still room for improvement, particularly in sectors with higher risk assessments like estate agents and lawyers. Malan shared that the centre has conducted over 550 inspections and received over 7.4 million regulatory reports, including 414,000 suspicious and unusual transaction reports. While these numbers are encouraging, Malan emphasized the need for continuous improvement, especially in sectors like estate agents and lawyers, where reporting lags. When asked about the possibility of South Africa exiting the grey list this year, Malan expressed confidence in the progress made within the sectors they supervise. While he did not delve into the national picture, Malan assured that the centre is well on the path to satisfying supervision requirements. He stressed the importance of sustaining and improving current efforts to meet the anticipated standards for a potential exit from the grey list. Overall, with continued dedication from businesses and improved compliance rates, South Africa stands a good chance of successfully exiting the FATF grey list in the near future.