Anti-Money Laundering (AML) screening is one of the most critical components of a business's compliance and risk management framework. Yet despite how frequently the term is used across financial services, banking, insurance, and broader business contexts, many organisations remain uncertain about exactly what AML screening involves, what it looks for, and why it is a legal obligation for a wide range of South African businesses.
This guide provides a comprehensive explanation of AML screening — covering what it is, how it works, what checks it includes, and how it applies to businesses operating within South Africa's regulatory framework.
What is AML Screening?
AML screening refers to the process by which a business analyses a customer or potential customer and assesses the risk they pose in relation to financial crimes such as money laundering, terrorist financing, fraud, and corruption. The screening process does this by cross-checking an individual or entity against a range of risk indicators and databases to determine whether they represent a financial crime risk before — and during — a business relationship.
AML screening is not a single check. It is a multi-layered process that typically encompasses three core components: Politically Exposed Person (PEP) checks, sanctions screening, and adverse media screening. Together, these three checks form the backbone of a comprehensive AML risk assessment.
What is AML/CFT?
AML stands for Anti-Money Laundering, and CFT stands for Countering the Financing of Terrorism. Because these two disciplines are closely related — both concern the flow of illicit capital through the financial system — they are routinely grouped together under the umbrella term AML/CFT.
Money laundering refers to the process of "cleaning" criminal revenue to disguise its illegal origin and allow it to be used in legitimate activities. Without the ability to launder money, criminals cannot access or make productive use of the proceeds of their crimes. The financing of terrorism, on the other hand, refers to the flow of capital — whether derived from legitimate or criminal sources — that enables terrorist organisations to operate, recruit, acquire weapons, and plan attacks.
AML/CFT legislation, therefore, refers to the body of laws, regulations, and policy frameworks designed to detect, prevent, and disrupt both money laundering and the financing of terrorism. To read a comprehensive overview of AML/CFT regulations and how they apply to South African businesses, refer to our detailed guide: What are AML/CFT Regulations?
1. What is a Politically Exposed Person (PEP) Check?
A Politically Exposed Person (PEP) check determines whether a customer currently holds, or has previously held, a prominent public function — and whether that political exposure creates an elevated risk of money laundering or corruption.
The rationale for PEP checks is straightforward: individuals who hold political power are in a position to abuse that power to engage in financial crimes such as bribery, embezzlement, corruption, and money laundering. Due to the inherent connection between political authority and capital, PEPs are universally regarded as higher-risk clients by financial regulators around the world.
South Africa's Financial Intelligence Centre (FIC) defines PEPs in accordance with the guidelines of the Wolfsberg Group — an association of thirteen global banks dedicated to developing frameworks for managing financial crime risks. Under this definition, a PEP is any individual who is, or has in the past, been entrusted with prominent public functions in any country. This definition is deliberately broad and encompasses:
- Current or former senior officials in the executive, legislative, administrative, military, or judicial branches of government
- Senior officials of major political parties
- Senior executives of government-owned commercial enterprises
- Senior and influential representatives of religious organisations where those functions are connected to political, judicial, military, or administrative responsibilities
- Immediate family members of a PEP — including spouses, parents, siblings, children, and a spouse's parents or siblings
- Closely Associated Persons, such as business colleagues, personal advisers, and consultants who demonstrably benefit from their proximity to a PEP
The Financial Action Task Force (FATF) — the leading intergovernmental body on global AML/CFT policy — further distinguishes between three categories of PEPs: Domestic PEPs (entrusted with prominent public functions within South Africa), Foreign PEPs (entrusted with such functions by another country), and International Organisation PEPs (senior members of international bodies such as the United Nations or World Bank).
Importantly, identifying an individual as a PEP does not imply wrongdoing or criminality. Rather, it triggers the application of Enhanced Due Diligence (EDD) procedures, which subject the PEP to a heightened level of scrutiny in order to monitor for any suspicious financial activity. For a detailed explanation of PEP obligations, due diligence requirements, and how they apply to South African businesses, refer to our comprehensive guide: What is a Politically Exposed Person (PEP)?
2. What is a Sanctions Check?
A sanctions check determines whether a customer or entity appears on any national or international sanctions lists — in other words, whether a government or regulatory authority has formally restricted or prohibited financial dealings with that individual or organisation.
Sanctions are issued by a range of regulatory and governmental bodies, including the United Nations Security Council, the Office of Foreign Assets Control (OFAC) in the United States, the European Union, and — in South Africa — the Financial Intelligence Centre. Sanctions may be applied to individuals, companies, or entire jurisdictions, typically as a consequence of terrorism, financial crime, human rights violations, or other prohibited conduct.
Conducting business with a sanctioned individual or entity is a serious legal violation that can result in severe regulatory penalties, financial liability, and reputational damage. Accordingly, sanctions checks form a non-negotiable component of any AML screening process — and are a legal requirement for Accountable Institutions under South Africa's FICA framework.
A comprehensive sanctions check will verify whether a customer appears on financial crime watchlists, regulatory enforcement lists, debarment lists, or any other list of restricted parties, whether locally or internationally.
3. What is Adverse Media Screening?
Adverse media screening — also referred to as negative news screening — involves cross-checking a customer's name against a broad range of media and news sources to identify any published information that indicates a potential financial crime risk. This includes reports of fraud, corruption, bribery, money laundering, terrorist financing, drug trafficking, or other criminal activity.
Adverse media screening is a critical component of a complete AML process because it can surface risk information that does not yet appear on formal sanctions or watchlists. A company director implicated in a fraud investigation by a reputable news outlet, for example, represents a measurable risk to a business — even if no formal sanction has been issued. By incorporating adverse media screening into the AML process, businesses can identify such risks proactively and apply appropriate due diligence measures before any exposure is incurred.
AML Screening in South Africa: The Regulatory Framework
In South Africa, AML screening obligations are primarily governed by the Financial Intelligence Centre Amendment Act (FICA) — the country's central AML/CFT legislation. Together with the Prevention of Organised Crime Act (POCA) and the Prevention and Combatting of Corrupt Activities Act (PRECCA), FICA forms the bedrock of South Africa's AML legislative framework. The Financial Intelligence Centre (FIC) is the national regulatory body responsible for applying and enforcing these laws.
FICA designates certain businesses, institutions, and organisations as Accountable Institutions (AIs). Due to the nature of their activities, AIs are exposed to a heightened risk of being exploited for money laundering or terrorist financing. Consequently, South African law requires AIs to comply with a comprehensive range of obligations that include AML screening, identity verification, address verification, record-keeping, and reporting of suspicious transactions to the FIC.
Accountable Institutions in South Africa span a wide range of sectors, including banking, insurance, forex, payments, cryptocurrency, iGaming, real estate, legal services, wealth management, and motor vehicle dealerships, among others.
The Risk-Based Approach
South Africa applies a Risk-Based Approach (RBA) to AML/CFT regulation. Under the RBA, Accountable Institutions are not presented with a fixed, prescriptive list of compliance requirements. Instead, each AI is responsible for conducting its own risk assessment, developing a tailored risk management strategy, and presenting that strategy to the FIC for approval.
The RBA means that AML screening obligations will vary depending on an AI's specific categorisation and the risk profile of its client base. A high-risk multinational bank will carry significantly greater AML obligations than a small, low-risk financial services provider. Consequently, the depth and frequency of AML screening will differ across institutions — although the core requirement to conduct PEP checks, sanctions checks, and adverse media screening applies broadly across all AIs.
South Africa, the FATF Greylist, and What It Means Now
South Africa was greylisted by the Financial Action Task Force in February 2023, following the FATF's Mutual Evaluation Report which identified critical deficiencies in the country's AML/CFT legislative framework — deficiencies substantially attributable to the systemic corruption of the State Capture era under former President Jacob Zuma.
Following a sustained period of legislative reform and a concerted inter-departmental compliance programme coordinated by National Treasury, South Africa was officially removed from the FATF greylist on 24 October 2025, after successfully completing all 22 action items in its remediation plan. This marked the end of a two-year period of heightened international monitoring.
South Africa's next FATF Mutual Evaluation is expected to commence in the first half of 2026. Accordingly, compliance standards for AML screening and broader FICA obligations remain under close scrutiny, and the regulatory pressure on Accountable Institutions to maintain rigorous AML frameworks has not diminished with the removal of the greylist designation.
What is Ongoing AML Monitoring?
AML screening is not a once-off exercise. South African law requires Accountable Institutions to conduct ongoing monitoring of their customer base throughout the life of the business relationship. This continuous monitoring obligation ensures that any change to a customer's risk profile — such as being placed under sanction, becoming a PEP, or appearing in adverse media — is detected and responded to promptly. Ongoing AML monitoring is particularly important for clients who were identified as lower risk at onboarding but whose circumstances may change significantly over time. Failure to maintain continuous monitoring can place an AI in breach of FICA even where its initial screening was thorough and compliant.
Who is Required to Conduct AML Screening in South Africa?
Any business, institution, or organisation designated as an Accountable Institution under FICA is legally required to conduct AML screening as part of its compliance obligations. This encompasses a broad range of entities across financial services and beyond — including banks, insurers, forex providers, crypto asset service providers, iGaming operators, estate agents, attorneys, accountants, and high-value goods dealers.
Beyond legal obligation, many businesses that do not formally qualify as Accountable Institutions choose to conduct AML screening voluntarily — recognising that the ability to screen customers for financial crime risk is a powerful tool for fraud prevention and informed decision-making, irrespective of regulatory requirement.
What Are the Penalties for Non-Compliance with AML Screening Requirements?
The consequences of failing to comply with AML/CFT obligations in South Africa are serious. The FIC has the authority to impose administrative sanctions on non-compliant Accountable Institutions, which can include substantial financial penalties. In more serious cases — particularly where non-compliance is found to have facilitated financial crime — criminal prosecution can result in imprisonment. Non-compliance also carries significant reputational risk, which can have lasting consequences for a business's client relationships and commercial standing.
AML Screening Solutions for South African Businesses
Today, AML screening has been fully digitised and automated, enabling Accountable Institutions to conduct comprehensive screening in real time — at the point of onboarding and continuously thereafter. Advanced API integrations allow businesses to seamlessly embed AML screening into their customer onboarding workflows, while online platforms provide accessible, cost-effective solutions for businesses that operate at lower volumes.
Become Compliant - Schedule a Demo to Speak with an Expert Today
As South Africa's leading provider of world-class AML screening, identity verification, and due diligence solutions, ThisIsMe offers a comprehensive suite of AML risk screening tools — including PEP and sanctions checks, adverse media screening, and ongoing AML monitoring — powered by globally recognised risk intelligence databases. Whether your business needs to screen individual customers, conduct enhanced due diligence on high-risk clients, or maintain continuous monitoring across an existing customer base, ThisIsMe provides the tools to meet your FICA compliance obligations with confidence. To experience our full suite of AML screening solutions and find out how we can serve your business, contact our team here.
