An exploration of the current regulatory aspects of money laundering in South Africa

Howard Chitimira

Journal of Money Laundering Control, 2021, vol. 24, issue 4, 789-805

Abstract: Purpose - Money laundering activities were allegedly rampant and poorly regulated in the South African financial markets and financial institutions prior to 1998. In other words, prior to the enactment of the Prevention of Organised Crime Act 121 of 1998 as amended (POCA), there was no statute that expressly and adequately provided for the regulation of money laundering in South Africa. Consequently, the POCA was enacted to curb organised criminal activities such as money laundering in South Africa. Thereafter, the Financial Intelligence Centre Act 38 of 2001 as amended (FICA) was enacted in a bid to,inter alia, enhance financial regulation and the combating of money laundering in the South African financial institutions and financial markets. Design/methodology/approach - The paper provides an overview analysis of the current legislation regulating money laundering in South Africa. In this regard, prohibited offences and measures that are used to curb money laundering under each relevant statute are discussed. The paper further discusses the regulation and use of customer due diligence measures to combat money laundering activities in South Africa. Accordingly, the regulation of customer due diligence under the FICA and the Banks Act 94 of 1990 as amended (Banks Act) is provided. Findings - It is hoped that policymakers and other relevant persons will use the recommendations provided in the paper to enhance the curbing of money laundering in South Africa. Research limitations/implications - The paper does not provide empirical research. Practical implications - The paper is useful to all policymakers, lawyers, law students, regulatory bodies, especially, in South Africa. Social implications - The paper seeks to curb money laundering in the economy and society at large, especially in the South African financial markets. Originality/value - The paper is original research on the South African anti-money laundering regime.

Keywords: Money laundering; Customer due diligence; High-risk customers; Risk-based approach; Ongoing due diligence (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-10-2020-0120

DOI: 10.1108/JMLC-10-2020-0120

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