25 June 2003
Cabinet today in principle approved the White Paper on Traditional Leadership and Governance which defines the role and place of the institution and seeks to restore its integrity and legitimacy. Based on the principles of the Constitution, the White Paper also commits a number of government departments to allocate some functions to the institution of traditional leadership.
Also approved was National Framework Legislation on Traditional Leadership and Governance, which will be published for public comment. The Minister of Provincial and Local Government will brief the public on these matters as soon as relevant changes requested by Cabinet have been effected. Further, legislation on the setting up of a Commission on Disputes and Claims will shortly be submitted to Cabinet.
The meeting received a comprehensive briefing on the progress being made by the Interim Management Team working with the Eastern Cape Provincial Administration. The report includes an analysis of the challenges facing the designated departments selected for assistance (Education, Health, Roads and Public Works, Social Development and Provincial Treasury).
The range of solutions that are being effected include strengthening back-office support, improving internal controls and accountability, improved human resource management, strengthening of public service leadership, improving ethics and measures against corruption, rapid and visible service delivery and turn-around strategies. Cabinet expressed its appreciation for the work being done by the Interim Management Team in partnership with the Provincial Administration, to eliminate the problems which have undermined provision of services to the public in this Province.
Cabinet discussed the issue of the celebration of Ten Years of Freedom on 27 April 2004. An Inter-Ministerial Task Team has been set up, made up of the following Ministers: The Presidency (Chairperson), Home Affairs, Education, Arts, Culture, Science and Technology, Defence, Environmental Affairs and Tourism, Finance, Safety and Security, Foreign Affairs, Health, Provincial and Local Government, Public Works, Intelligence, and Public Service and Administration; as well as Deputy Ministers of Arts, Culture, Science and Technology, Safety and Security, Foreign Affairs, Provincial and Local Government, Finance and Home Affairs, and the Directors-General from these Departments.
It was noted that this seminal period in the history of our country would unfold in various forms, some of which would be official government events and others activities by civil society - organised and spontaneous - both within South Africa and abroad. The central challenge is to ensure that all South Africans join hands to mark the maturing of our democracy, review progress and draw lessons from the past ten years in bettering the lives of citizens, and mobilise the international community to support our efforts and those of Africa for reconstruction and development.
The Task Team will in the coming weeks consult other spheres of government and structures of civil society to ensure a well-co-ordinated campaign which reinforces national unity.
The following other Bills were approved for submission to Parliament:
- Higher Education Amendment Bill on the functioning of the Council on Higher Education;
- Education Laws Amendment Bill which deals with amendments to a number of laws on education to improve clarity on some issues;
- Unemployment Insurance Amendment Bill which regularises the status of domestic, seasonal and other workers;
- General Intelligence Law Amendment Bill which deals with such matters as security clearance procedures, functions of the Parliamentary Joint Standing Committee on Intelligence and the Office of the Inspector-General; and
- Liquor Bill, which takes into account Court rulings on earlier legislation.
Cabinet welcomed the accession by South Africa to the Financial Action Task Force (FATF) which deals with money laundering and terrorist financing, working with the United Nations, International Monetary Fund, World Bank, the Commonwealth Secretariat and Interpol. SA was welcomed as the 30th member of this group - and the first African member - not only because of its commitment to these global efforts and the quality of its own legislation and practices on these issues; but also because it is recognised as a strategic country in the international financial system. [Background information is attached for reference.]
The following appointments were approved:
- Members of the South African Diamond Board; and
- Two Deputy Directors-General in the Department of Arts and Culture and one in the Department of Provincial and Local Government.
Cabinet noted and welcomed the initiative by the Department of Home Affairs to encourage South Africans to access identity documents, particularly the waiving of payment for photographs and other costs. Government wishes to call on all South Africans to take advantage of this opportunity, both to ensure that they can regularise their status and access opportunities including social grants, and so they can take part in the elections next year.
This being the last Cabinet meeting before the 2nd Summit of the African Union in Mozambique, Cabinet noted the progress that had been made during South Africa's and our President's term as the first Chairperson of the Union. South Africa is privileged to have played a part in laying the foundation for further progress in uniting the continent, defining and starting the implementation of its development programme (NEPAD), promoting the resolution of conflicts and deepening democracy, and mobilising the world to partner Africa in its renaissance.
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Issued by: Government Communications (GCIS)
Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) was established in July 1989 to examine measures to combat money laundering.
The primary objective of the FATF is its commitment to promoting anti-money laundering (AML) and combating of terrorist financing (CFT) initiatives globally. This consists of three main parts
- Enlarge the FATF membership;
- Develop credible and effective FATF-style regional bodies; and
- Increase cooperation with the relevant international organisations.
In 1990 the FATF issued Forty Recommendations designed to fight this phenomenon. The Recommendations were revised in 1996 to reflect changes in money laundering trends and techniques. In October 2001, the FATF issued 8 new international standards to combat terrorist financing. The "FATF 40+8" is the short-hand reference used to refer to the full set of FATF recommendations. A process has been underway for the past year to review the FATF recommendations and to redefine these. The new, revised Recommendations were adopted at the June FATF meeting in Berlin, 2003 (see below).
Membership and partners
The current membership of the FATF comprises thirty-one governments and two regional organisations, representing the major financial Centres of America, Europe and Asia. The FATF enlarged its membership when Argentina, Brazil and Mexico joined as observers in September 1999. Latin America represents a region in which fighting money laundering is crucial. With the addition of these three countries to the world-wide network of anti-money laundering systems, the overall effort in the Americas is thus reinforced.
The FATF is presently considering the possible membership of other strategically important countries from regions in which the FATF wants to strengthen representation. FATF regards South Africa as an important player in the Southern African region, especially because of the development of its economy, sophistication of its financial sector infrastructure, legislative framework and law enforcement capabilities and therefore the example it could set in the Southern African region.
The FATF works and liaises closely on these AML/ CFT issues with other international and multilateral institutions such as the United Nations through its Global Programme for United Nations through its Office for Drug Control and Crime Prevention and its Global Programme Against Money Laundering; the World Bank and International Monetary Fund, the Commonwealth Secretariat; and Interpol and liaises closely on standards matters with the Basel Committee on Banking Supervision; the International Organisation of Securities Commissions (IOSC); and the International Association of Insurance Supervisors (IAIS).
The FATF encourages the development of FATF-style regional bodies, namely: the Asia/ Pacific Group on Money Laundering (APGML), the Caribbean Financial Action Task Force (CFATF) and the Eastern and Southern African Anti Money Laundering Group (ESAAMLG), the Select Committee of Experts on the Evaluation of Anti-Money Laundering measures of the Council of Europe, and the South American Financial Action Task Force (SAFATF).
South Africa became a member of the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG) in August 2002 after Cabinet approved signature to the organisation's Memorandum of Understanding which sets out the founding principles, objectives and modus operandi of the Group.
Minimum Criteria for FATF membership
The minimum and criteria required for countries to be admitted to the FATF as members are that they:
- Be fully committed to the FATF and its objectives at the political level;
- Implement the 40+8 recommendations within a reasonable timeframe (three years);
- Undergo annual self-assessment exercises and two rounds of mutual evaluations;
- Be a full and active member of the relevant FATF-style regional body (where one exists such as the ESAAMLG), or be prepared to work with the FATF or even to take the lead, to establish such a body (where none exists);
- Be a strategically important country;
- Have already made the laundering of the proceeds of drug trafficking and other serious crimes a criminal offence; and
- Have already made it mandatory for financial institutions to identify their customers and to report unusual or suspicious transactions.
FATF recognises that South Africa meets the standards it has set for membership and therefore welcomed it to become the 30th member of the FATF and the first country from the African continent.
The major changes that have been adopted in the Recommendations include:
- specifying a list of crimes that must underpin the money laundering offence;
- the expansion of the customer due diligence process for financial institutions;
- enhanced measures for higher risk customers and transactions, including correspondent banking and politically exposed persons;
- the extension of anti-money laundering measures to designated non-financial businesses and professions (casinos; real estate agents; dealers of precious metals/stones; accountants; lawyers, notaries and independent legal professions; trust and company service providers);
- the inclusion of key institutional measures, notably regarding international co-operation;
- the improvement of transparency requirements through adequate and timely information on the beneficial ownership of legal persons such as companies, or arrangements such as trusts;
- the extension of many anti-money laundering requirements to cover terrorist financing; and
- the prohibition of shell banks.