Money laundering and terror financing risk management of low risk financial products and services in South Africa

When the South African anti-money laundering regulations were drafted in 2002, the Minister of Finance made an exemption to protect so-called mass market banking services products for the poor against negative compliance impact by the new system. This exemption, known as Exemption 17, relaxes the requirement to identify and verify a client’s residential address. Exemption 17 was amended in 2004 to facilitate the launch of a basic bank account, the Mzansi account. This account has proved to be hugely popular. According to the FinScope 2007 survey 10% of South African adults claimed to hold a Mzansi account.