Social development eyes non-complying NPOs

The department's deregistration comes as the 2026 deadline to submit an update to the Financial Action Task Force (FATF) on South Africa’s grey listing status draws near.

In February 2023, South Africa was greylisted by FATF, prompting the task force to develop an Action Plan with 22 Action items linked to the eight strategic deficiencies identified in the country’s anti-money laundering and combating financial terrorism regime.

South Africa has made progress in 5 action items and has 17 outstanding items to which it must report progress by 2026.

The FATF highlighted that NPOs could be exploited for terrorism financing and money laundering, recommending that South Africa create a risk assessment for NPO-related terror funding.

The Department of Social Development told Members of Parliament it will work with SARS and the FIC and develop monitoring mechanisms to mitigate this risk.

“There are high, medium and low risk categories. The Department has commenced with the deregistering non-complaint NPOs that do not fall in the high- risk category of NPOs as one of the mitigating monitoring mechanisms,” the statement further said, “Closer supervision and monitoring has been instituted by the Department for NPOs identified to be at high risk of terror financing,”

The department’s spokesperson Bathembu Futshane said the need to deregister non-compliant NPOs is required by the need for the department to comply with the provisions of the NPO Act.

“Nonprofit organisations play a crucial role in societal development and community welfare. However, some organisations fail to comply with regulatory frameworks, risking public trust and the integrity of the sector.”

The department will de-register organisations over a period of 6 to 12 months, and it will continue to support NPOs by creating an enabling environment for them to operate effectively and efficiently.

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