South Africa’s AML Crackdown: Treasury Refuses to Loosen the Rules

•  South Africa’s Treasury is standing behind most of its proposed AML reforms despite objections from legal and financial sector stakeholders. The message to regulated businesses is increasingly clear: expect wider regulatory powers, closer scrutiny and fewer opportunities to operate in grey areas.

South Africa’s National Treasury has largely held its ground on the proposed General Laws (Anti Money Laundering and Combating Terrorism Financing) Amendment Bill, 2026, following public submissions to Parliament.

Treasury told the Standing Committee on Finance that only two changes would be made to provisions amending the Financial Intelligence Centre Act, FICA. No amendments were proposed to the Bill’s changes to the Financial Sector Regulation Act, FSRA.

Among the provisions Treasury is retaining are measures that could give the Minister of Finance greater flexibility to bring emerging financial products and arrangements within the regulatory perimeter.

The Law Society of South Africa had raised concerns about the breadth of some provisions, including information requests involving significant and beneficial owners, investigation powers, licensing issues and the potential expansion of financial regulation.

Treasury and the Financial Sector Conduct Authority have resisted calls to significantly narrow the wording, arguing that flexibility is necessary as financial products and technology evolve.

That position has a direct compliance consequence.

Financial institutions cannot assume that an arrangement escapes regulation simply because it does not fit neatly into an existing product definition. The proposed framework appears designed to give regulators room to examine what a product actually does, rather than relying entirely on what it is called.

The debate, however, is not one sided.

Broad powers may help regulators respond to digital finance and new forms of financial crime. But unclear boundaries can create uncertainty for legitimate businesses and make compliance decisions harder.

For firms operating in South Africa, the prudent response is preparation. Compliance teams should examine how the proposed changes could affect product design, licensing, beneficial ownership information, regulatory reporting and responses to information requests.

The Bill is therefore about more than AML enforcement. It is also about how far South Africa is prepared to expand regulatory discretion in a rapidly changing financial system.

AML Takeaway

South Africa’s proposed AML reforms point towards wider regulatory scrutiny and greater flexibility for authorities. Firms should not wait for final legislation before assessing exposure. Product structures, ownership information, licensing arrangements and internal controls should be reviewed now, particularly where digital or unconventional financial products may fall within an expanding regulatory perimeter.