Anti-terror rules should not target crèches
Anti-money laundering Bill may fail the international test it was written to pass
South Africa's efforts to comply with international anti-terror financing rules may inadvertently create difficulties for non-profit organisations (NPOs). The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill aims to keep the country off the Financial Action Task Force's grey list. This list identifies countries with deficiencies in anti-money laundering, terrorist financing, and proliferation financing controls.
The new rules target NPOs, which are often trusted and work in conflict areas, potentially making them a channel for terrorist money. However, the bill's registration duty and enforcement powers are not explicitly tied to the risk assessment of NPOs. If an NPO fails to comply with a compliance notice, it risks losing registration, which can be devastating for funding and operations.
The bill also imposes a blanket maximum fine for offences, regardless of risk or intent. This could discourage volunteer-run organisations from serving on boards and limit their capacity to respond to problems. The NPO Working Group has proposed amendments to ensure the enforcement scheme is proportionate and risk-based, including stricter requirements for registration offences and linking penalties to the amount gained.
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