Lawyers and estate agents holding SA back from exiting grey list, among others
The Financial Intelligence Centre is ready to sanction those not submitting required reports. The Money Show gets Ismail Momoniat's take as DDG of National Treasury.
South African flag.Picture: Wikimedia Commons/CC-BY-SA-2.5
The Financial Intelligence Centre (FIC) is ready to come down hard on those sectors impeding South Africa's efforts to get off the grey list of the Financial Action Task Force (FATF).
The country was penalised by the global anti-corruption watchdog in 2023 for not having adequate measures in place to prevent money laundering and terror financing.
RELATED:
Treasury working hard to remove SA off grey list by early 2025, Godongwana assures Parly
The Money Show gets input on the FIC warning from Ismail Momoniat, Deputy Director-General of National Treasury.
Legal practitioners and estate agents top the list of those designated non-financial businesses and professions 'wilfully' standing in the way of South Africa exitig the grey list.
This is because of the low rate of submitting the risk and compliance return (RCR) questionnaires they are required to complete.
"The RCR is a questionnaire which assists business in identifying the risks they face of money laundering and terror financing abuse... The due date for these submissions was 31 May 2023, which is over a year ago."
Financial Intelligence Centre
The average RCR submission rate across affected Directive 6 sectors is 63%, and individual sector submission rates are:
• Legal practitioners – 60 percent
• Estate agents – 66 percent
• Trust service providers – 74 percent
• Company service providers – 76 percent
• Casinos – 100 percent.
Treasury's Momoniat notes that many of these sectors have not been heavily regulated in the past, and some not at all for money laundering and terror financing.
But while reporting is something relatively new for these sectors, the response rate has been far too low.
"Some are better than others, but if we don't get the response rate to increase substantially, they WILL actually hold this country back."
"Clearly for them to get into the habit of reporting is one issue, but I think many also don't want to report because they know it may raise more questions than answers because if they've been part of any shady dealings in the past they now have to account for that."
Ismail Momoniat, Deputy Director-General - National Treasury
He says it will be up to the FIC to impose sanctions and penalties on these entities which are not complying.
Scroll up to listen to the interview with Momoniat