Social Development Leads National Dialogue on FATF Compliance and NPO Safeguards

South Africa Strengthens Efforts to Combat Money Laundering and Terror Financing Through Multi-Stakeholder Engagement.

As part of South Africa’s ongoing efforts to implement the Financial Action Task Force (FATF) recommendations, the Department of Social Development has convened a three-day multi-stakeholder engagement in Kempton Park. This gathering, which brings together government representatives, non-profit organisations (NPOs), financial institutions, law enforcement agencies, and development partners, aims to enhance national measures to combat money laundering and terrorist financing.

Strengthening Compliance and Collaboration

The engagement focuses on improving the understanding of FATF standards and ensuring the effective implementation of risk-based measures to safeguard NPOs from financial abuse. “The fight against money laundering and terrorist financing requires a collective national effort and collaboration among key stakeholders,” the department stated.

As the registrar and custodian of the NPO Act (Act No. 71 of 1997, as amended by the General Laws Amendment Act No. 22 of 2022), the Department of Social Development is committed to working closely with NPOs to enhance compliance and transparency within the sector.

With South Africa scheduled to report to FATF on its remaining deficiencies in June 2024, this engagement is a critical step toward ensuring the country meets global anti-money laundering and counter-terrorist financing standards. The discussions will particularly focus on Recommendation 8 of FATF, which addresses the protection of NPOs from potential financial abuse.

Key Stakeholders and Expert Insights

The event features presentations, case studies, and best practices from experts representing key financial institutions and regulators, including:

• Financial Intelligence Centre (FIC)
• South African Revenue Service (SARS)
• Chartered Institute for Business Accountants (CIBA)
• National Lotteries Commission
• Companies and Intellectual Property Commission (CIPC)

These discussions will cover trends, risk mitigation strategies, and the role of NPOs in combating financial crimes.

Progress Toward FATF Compliance and Grey List Delisting

South Africa has made significant strides in addressing FATF’s concerns. The country has largely or fully addressed 20 of the 22 required action items in its compliance plan, leaving just two outstanding issues to be resolved in the next reporting period (March 2025 – June 2025). Meeting these requirements will position South Africa for potential removal from the FATF grey list by October 2025.

South Africa was placed on the grey list following the FATF plenary meeting in Paris in February 2023. Since then, authorities have been working to strengthen anti-money laundering and counter-terrorism financing frameworks, addressing eight strategic deficiencies identified in the country’s financial system.

Deregistration of Non-Compliant NPOs

In parallel with these efforts, the Department of Social Development has embarked on a deregistration process for non-compliant NPOs. Currently, 203,279 organisations are at risk of deregistration for failing to submit annual reports, as required by Section 18 (1) of the NPO Act.

The department has issued non-compliance notices to these organisations, urging them to meet their reporting obligations to maintain legal standing and continue their operations.

Outcome of the Engagement

The multi-stakeholder engagement, held at the Premier Hotel OR Tambo, will conclude with the adoption of a national declaration on combating money laundering and terrorist financing. This declaration will outline a unified approach to implementing FATF standards, protecting NPOs, and ensuring compliance with global financial regulations.

With ongoing collaboration and commitment from all stakeholders, South Africa aims to strengthen its financial security framework, protect NPOs from financial abuse, and work towards its removal from the FATF grey list.