South Africa NPO transaction monitoring is a topic where headlines can mislead. The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, now before Parliament, proposes substantial changes to how nonprofit organisations are supervised. That does not mean nonprofits themselves must run transaction monitoring. The monitoring duty sits with accountable institutions such as banks, and the Bill changes the context in which they assess nonprofit customers.
This article explains what the Bill proposes for the nonprofit sector, what it does not appear to do, and how institutions should adjust monitoring of nonprofit customers without drifting into blanket de-risking.
What the Bill proposes for nonprofits
The Bill (B15-2026) was introduced in the National Assembly in May 2026 and amends the Nonprofit Organisations Act alongside the Financial Intelligence Centre Act, the Companies Act, the Financial Sector Regulation Act and the Close Corporations Act. It shifts the NPO Directorate from an administrative role towards active supervision, with compliance notices and administrative sanctions, and sets one ceiling for offences under the NPO Act of a fine of up to R1 million, five years' imprisonment, or both.
The version tabled in May is narrower than the January 2026 draft. According to a commentary published by GroundUp, the draft would have applied the new monitoring and enforcement powers to every registered nonprofit, whereas the tabled Bill applies compliance notices and administrative sanctions only to organisations required to register, which since 2022 means those that donate or provide services across South Africa's borders. Other organisations register voluntarily. The Department of Social Development has said the purpose of the NPO amendments is to address FATF Recommendation 8.
Where the Bill stands
National Treasury responded to public submissions on 26 August 2026, and Parliament's Standing Committee on Finance completed clause-by-clause deliberations on 23 September 2026 without formally adopting the Bill. As of early October 2026 the committee still had to receive legal advice and adopt its report. The next FATF mutual evaluation of South Africa begins in mid-2026 and concludes in October 2027, and the nonprofit changes are part of preparation for it. Firms should confirm the enacted text before relying on any provision.
What the Bill does not do
None of the summaries reviewed describes nonprofits becoming accountable institutions under the Financial Intelligence Centre Act, so the duty to monitor transactions and report suspicion does not move to nonprofits under the Bill. The change is to how the sector is supervised under the NPO Act.
That distinction matters for institutions. A stronger supervisor can reduce risk in the sector over time, but it does not remove the institution's own obligation to understand each nonprofit customer, its funding, its beneficiaries and the countries it works in. South Africa's 2024 nonprofit sector risk assessment identifies where the risk lies, and institutions can use the same lens.
Monitoring nonprofit customers on a risk basis
FATF revised its standards on nonprofits in 2016 and again in November 2023 after finding that legitimate organisations had lost funding and banking access. Countries are now expected to identify which nonprofits are actually at risk and to apply measures that are focused, proportionate and risk-based. The same logic applies to banks: segment nonprofit customers by size, funding model, geography and activity, and apply enhanced monitoring where the profile warrants it.
Useful monitoring signals include funds moving to high-risk jurisdictions without a documented programme, cash-intensive activity, sudden changes in donors or beneficiaries, and use of intermediaries. Check registration status at onboarding and at review, record the reasoning for each decision, and avoid closing accounts or applying uniform restrictions in reaction to the Bill. That risks undermining legitimate charitable work and does little to improve monitoring where it matters. In that sense, South Africa NPO transaction monitoring remains a customer risk judgement for institutions, informed by a stronger sector supervisor.
