Harmonisation of regulatory frameworks in the SADC region – AML/CFT- focus note 5

The FinMark Trust review of the AML/CFT requirements in SADC countries concentrated on compliance with FATF Recommendations, i.e. with a view to identifying opportunities to harmonise requirements across jurisdictions in relation to the FATF standards.

The development of a generic understanding of AML/CFT challenges in SADC countries is addressed in this focus note and it is recognised that the SADC Protocol of Finance and Investment (FIP) could serve as a point of departure in this regard. Where there is a consistent understanding of how the FATF Recommendations should be applied in SADC countries. This will assist in reducing the learning curve towards achieving financial integrity objectives and, at the same time, place appropriate focus on financial inclusion goals.

A review of the AML/CFT regulatory requirements in the participating SADC countries reveals that all of them have incorporated elements of a risk-based approach to AML/CFT. However, the individual country approaches vary significantly from country to country.  For example, a country may have adopted an exemption for occasional transactions or wire transfers below a specified threshold, but then may not have provided for broader simplified due diligence when lower ML/TF risks are identified using a rules- or principles-based approach.