POCDATARA — the Protection of Constitutional Democracy Against Terrorist and Related Activities Act 33 of 2004 — is South Africa's primary legislation criminalising terrorist activities and the financing of terrorism. While POCA deals with money laundering, POCDATARA deals specifically with terrorism and terrorist financing. Together with FICA and POCA, POCDATARA forms the legislative framework that South African accountable institutions must navigate in their KYC and AML programmes.
What Does POCDATARA Criminalise?
POCDATARA criminalises a wide range of terrorist activities, including:
- The commission of terrorist acts
- The financing of terrorist acts and terrorist organisations
- The provision of weapons, training, or other support to terrorist organisations
- Membership of terrorist organisations
- Harbouring or concealing terrorists
Terrorist financing — providing funds or financial services to a terrorist or terrorist organisation, knowing or having reasonable grounds to believe that the funds will be used for terrorist purposes — is a specific offence under POCDATARA. The offence applies regardless of whether the funds actually end up being used for terrorism.
POCDATARA and KYC Compliance
POCDATARA is directly relevant to KYC compliance because accountable institutions must ensure they do not provide financial services to terrorists or terrorist organisations. This is why sanctions screening — checking customers against lists of designated terrorist organisations and individuals — is a core component of KYC.
FICA requires accountable institutions to report suspicious transactions that may be related to terrorist financing. The obligation to file a Suspicious Transaction Report (STR) applies to both money laundering and terrorist financing suspicions.
Sanctions Lists and POCDATARA
South Africa implements United Nations Security Council resolutions that designate terrorist organisations and individuals. Accountable institutions must screen their customers against these UN sanctions lists and must not provide financial services to designated persons or entities. The FIC publishes guidance on the applicable sanctions lists and the obligations of accountable institutions.
Frequently Asked Questions
- What is the difference between POCA and POCDATARA?
- POCA criminalises money laundering — the processing of proceeds of crime. POCDATARA criminalises terrorist activities and the financing of terrorism. Both are relevant to KYC compliance, but they address different threats.
- Must accountable institutions screen customers against terrorist financing lists?
- Yes. Accountable institutions must screen customers against UN sanctions lists and other applicable sanctions lists as part of their KYC programme. Providing financial services to a designated terrorist or terrorist organisation is a criminal offence under POCDATARA.
- What is the penalty for terrorist financing under POCDATARA?
- Terrorist financing is a serious criminal offence. The penalties include imprisonment and significant fines. The specific penalties should be verified against the current text of POCDATARA.
- Does POCDATARA apply to charities and non-profit organisations?
- Yes. Non-profit organisations (NPOs) are considered a high-risk sector for terrorist financing because they can be used to channel funds to terrorist organisations. FATF Recommendation 8 specifically addresses the NPO sector, and South Africa has implemented measures to address this risk.
- What is a designated person or entity under POCDATARA?
- A designated person or entity is one that has been identified by the UN Security Council or by the South African government as a terrorist or terrorist organisation. Accountable institutions must not provide financial services to designated persons or entities.