SA authorities must closely monitor the terror financing activities of Islamic State (IS) within the country’s borders, according to the terror financing national risk assessment.
The update, released on Tuesday, states that, unlike the 2022 risk assessment — which identified a moderate terror financing risk, the country now faces a significant level of risk in terms of terror financing.
SA’s current terror financing threat primarily emanates from the IS, its affiliates, supporters and ideology, it said.
“The likelihood that funds or other assets may be raised in SA and moved through, or out of, the country in support of terrorism is assessed to be high, given the range of vulnerabilities (including structural elements, materiality and sector-specific terror financing vulnerabilities), especially as SA is a regional financial and trading hub.
“The use of funds for terror financing in SA is mainly linked to domestic violent extremism (including right-wing extremism) and for sustaining the activities of a small group of IS sympathisers.
“The current understanding of terror financing risks in SA has taken into consideration several threats and vulnerabilities that could constitute terror financing risk factors.”
One of the reasons SA was greylisted by the Financial Action Task Force (FATF) in 2023 related to weakness in its anti-money-laundering system.
The FATF’s latest report has acknowledged the progress that SA has made in tackling technical compliance deficiencies in its anti-money-laundering system.
The government expects to have dealt with all the deficiencies identified by the FATF by early 2025.
Since the greylisting, government departments and agencies — including the police, the Hawks, National Prosecuting Authority, Special Investigating Unit, State Security Agency, Reserve Bank, Financial Sector Conduct Authority and SA Revenue Service (Sars) — have been working to tackle the deficiencies.
The risk assessment said the emigre and diaspora community footprint in SA includes elements committed to radicalisation, as well as the facilitation, recruitment and funding of terrorist activities.
“Given SA’s large emigre and diaspora communities from geographic areas associated with conflict and terrorism, the SA authorities consider that organisations, not necessarily identified in resolutions of the UN Security Council and thus not universally considered to be terrorist organisations ... pose a threat of raising and/or moving funds for terror-related purposes in and through SA,” it said.
Domestic threats
The update also flagged several domestic threats that could fuel terror financing. There are a number of channels used by violent political actors to finance their activities in SA. Predominantly, self-funding and diversion of legitimate political funding to illegitimate ends.
“There are also instances, however, where it appears that violent political actors have engaged in predicate crimes such as robberies and truck hijackings to generate financial resources to support their activities,” it said.
“As a consequence of its history of racial domination and violence, SA also faces a right-wing extremist threat and can be regarded as a fertile breeding ground for white supremacist hate groups. In SA, violent extremism, which includes the extreme right-wing, remains a national security concern.”
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