REVEALED: 50 SA NGOs under probe for terror funding and money laundering

The Department of Social Development has revealed that 50 non-profit organisations across the country are under investigation for alleged involvement in terror financing and money laundering.

The move is part of the government's efforts to crack down on dubious NGOs, following the Financial Action Task Force's (FATF) classification of South Africa as a medium-risk country.

In 2023, the global financial crime watchdog also Grey listed South Africa for failing to adequately prevent money laundering and terrorist financing, citing weaknesses in law enforcement, insufficient prosecutions, and a lack of transparency in beneficial ownership information.

It also identified several key areas the government must improve to move out of the Grey list. Since then, the government has taken steps to ensure that it complies with the FATF recommendations and had expressed hope that it would be off the list by June.

The FATF has also admitted the country has partially met some of its recommendations but noted that the country still needed to demonstrate “a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF (terrorist financing)".

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It further added that the Department of Social Development should intensify outreach and educational programmes for non-profit organisations (NPOs) to enhance their understanding of global anti-money laundering and counter-terrorist financing standards, in line with the NPO Act (Act No. 71 of 1997) as amended by the General Laws Amendment Act 22 of 2022.

The government seems to be moving to implement the latest recommendations, as Social Development acting Deputy Director-General Peter Netshipale has revealed that 50 NPOs are under investigation.

“They are suspected of being used by foreign terrorist-supporting groupings to come here and recruit people, undermining the sovereignty of the country,” Netshipale told The Citizen.

“As the regulator for NPOs, we are given a role to supervise and weed out suspected organisations in the sector, through a risk assessment guideline. In doing our work, we involve law-enforcement institutions like the SA Police Service, state intelligence and the Special Investigating Unit (SIU),” Netshipale said.

Netshipale added that some organisations are utilised to launder money.

“The big problem is that some NPOs are utilised to launder money. There are instances where people deposit R7 million into an NPO bank account – only to withdraw it from the other side and not pay tax,” Netshipale said.

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