The 2025 AML/CFT Amendment Bill: Essential insights for accountable institutions
The National Treasury has released the Draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, 2025. This Bill proposes critical updates to the Financial Intelligence Centre Act (FICA), the Companies Act and the Financial Sector Regulation Act (FSRA).
This isn't just another administrative update, it’s a proactive "gap-closing" exercise ahead of the 2026/2027 Financial Action Task Force (FATF) Mutual Evaluation.
Some changes to be aware of
1. Formalised "Lifestyle Audits"
The FIC is set to gain explicit statutory powers to conduct lifestyle audits. These are designed to verify if an individual's living standards align with their legitimate, declared income.
2. New focus on "Similar Outcome" financial services
In a move toward activity-based regulation, the Bill expands definitions within the FSRA. Regulators may now treat arrangements as financial products or services if they produce similar outcomes to traditional ones, regardless of the technology used.
“to ensure that the responsible authority may license financial institutions that are providing financial products and financial services, including new services despite existing licensing requirements in other legislation”
3. Extended record-keeping mandates
Accountable institutions will now be required to maintain records for a minimum of 7 years (increased from the previous 5 year standard) in the following instances:
Business relationships: Records must be kept for 7 years starting from the date the relationship is officially terminated.
Concluded transactions: Records must be kept for 7 years from the date of conclusion.
Reports submitted to the FIC: Any records related to transactions or activities that resulted in a report to the FIC must be kept for 7 years from the date the report was submitted.
4. A broadening information-sharing network
The FIC will be empowered to share personal data with departments such as the Border Management Authority and the Public Procurement Office, while also gaining the statutory right to conduct lifestyle audits independently. Additionally, the Bill transforms the Nonprofit Organisations office into an enforcement body.
While the South African Revenue Service (SARS) already performs lifestyle audits for tax reconciliation, this Bill does not grant them direct new powers. The FIC will be able to initiate these audits at the request of various state organs and municipalities, subsequently funnelling its findings and forensic evidence to SARS and the National Prosecuting Authority (NPA).
5. Companies Act
It also empowers the Companies and Intellectual Property Commission (CIPC) to deregister companies that fail to submit securities registers or meet beneficial ownership transparency requirements on time.
Industry concerns and public responses so far
While the Bill is deemed necessary to remain in the good graces of the FATF, it has faced some pushback:
Privacy concerns: Organisations like Dear South Africa report overwhelmingly negative feedback, with many South Africans perceiving the Bill as an infringement on constitutional rights to privacy.
Legal professional privilege: The Law Society of South Africa (LSSA) has raised alarms that new reporting obligations might conflict with a legal practitioner’s duty to maintain client privilege, especially regarding Targeted Financial Sanctions.
Small business burden: The LSSA also notes that the mandate for absolute scrutiny imposes a disproportionate administrative burden on smaller legal and property practices compared to large banks.
Organisations like Corruption Watch view the Bill through a more neutral lens. They argue these reforms are essential for maintaining South Africa's standing with the FATF. This follows the country's successful removal from the FATF grey list last year.
What’s next?
The window for public comment is short and all submissions must be made by 13 February 2026 and emailed to Commentdraftlegislation@treasury.gov.za.
