Home Tags Grey listing
Tag: grey listing
Locally, as trust compliance becomes more complex and trusts become more costly to administer, their value is increasingly being questioned. However, a trust’s worth extends beyond its financial benefits, and as such, they are still very relevant tools to use in a well-crafted estate plan, especially for high-net-worth families.
South Africa has been enlisted on the Financial Action Task Force’s (FATF) dreaded “Grey List” for over four months – fortunately, though, the country has not been standing still. Significant new provisions are shaking up the corporate landscape and by comprehensively implementing stricter controls, the country can transition more quickly from the Grey List to the coveted “Whitelist.”
In February this year, South Africa was greylisted by the Paris-based Financial Action Task Force (FATF) because of its failure to comply with its standards and measures to combat illicit financial flows, terrorist funding and potential threats to the integrity of the global financial system. This step is the consequence of the endemic corruption, generally referred to as “state capture” which has long prevailed in the country.
Late last year, South Africa changed the Financial Intelligence Centre Act (FICA) to alter the status of several business types, including motor vehicle dealers. Under the new changes, dealerships are accountable institutions. How does this affect their operations, and can they adapt to the new requirements?
The recent announcement of South Africa’s grey listing has compounded an already volatile market and has introduced more administrative complexity when investing offshore. Onerous due diligence processes and verifiable information may be required creating delays with offshore investments.
New designated items listed as accountable institutions in Schedule 1 of the Financial Intelligence Centre Act (FICA) are urged to continue registering with the Financial Intelligence Centre (FIC) even after the deadline of close of business on Monday, 20 March 2023, to avoid being in non-compliance with the registration requirements.
In a recent newsletter, President Cyril Ramaphosa said that South Africa knows what needs to be done to be removed from the greylist and that the fundamentals are in place. Eight areas of strategic deficiency have been identified by the Financial Action Task Force (FATF) which government needs to urgently address in order to get off the greylist.