South African Banks Start Freezing 'High Risk' Accounts

by Robert Lee, for LawAndTax-News.com, London

10 January 2005

It emerged at the weekend that banks in South Africa have begun freezing the accounts of those customers designated as "high risk" who did not identify themselves by the December 31 deadline imposed by the Financial Intelligence Centre Act.

The original deadline for all customers of South African banks to provide adequate identification, in order to bring the country into compliance with international anti-money laundering standards, was June 30, 2004.

However, the banks complained that this was not realistic, leading to the introduction of staggered deadlines for trusts and partnerships, non-resident account holders, high risk account holders, and those considered low risk.

Although no exact definition of a high risk customer has been provided by the authorities, experts have suggested that businesses with monthly account turnovers of more than R50,000 and individuals with account turnovers of R25,000 are likely to come under increased scrutiny if they have thus far failed to provide the required identification documents.

Recommended