Anti-money laundering framework in South Africa the United States and the United Kingdom

Abstract

Given the fact that money laundering can serve to create a smokescreen for financing of various activities that not only are criminal in nature but that can also threaten lives and can sweep across borders it has been recognised globally that mechanisms have to be put in place to prevent money laundering as a conduit for criminal activity. An effective AML framework is thus not only necessary but is essential for South Africa to combat money laundering. This study investigates whether the AML framework in South Africa is sufficient in combating money laundering. In addition, it seeks to address the shortcomings of the AML framework in South Africa, highlight certain areas for improvement in comparison to the UK AML framework and reveals the need for further incorporation of the global AML framework into the AML framework in South Africa. The UK has adopted a progressive stance towards combating money laundering which pre-dates the measures introduced by the international community. It has implemented all the international legal AML instruments emanating from the UN and EU and in many instances, its provisions have exceeded the international benchmarks. South Africa is a country that is highly susceptible to money laundering as a result of its financial system being the major financial center in the African region and it is clear that South Africa will need to rely on the available international expertise in money laundering from countries such as the UK. Ultimately this study illustrates that it is essential for South Africa to critically examine its AML framework and address remaining deficiencies to bring it in line with the global AML framework. In addition, South Africa needs to adopt an aggressive stance towards money laundering and go beyond the international standards and implement and formulate its own legislation which is tailored towards its own unique challenges. South Africa further needs to increase available resources and institutional and structural capacity in order to combat money laundering and ultimately seek solutions to overcome the challenges it faces as a developing country.