Abstract

Money laundering poses significant threats to economic integrity, financial stability, and public confidence in South Africa, prompting comprehensive legislative responses through the Financial Intelligence Centre Act 38 of 2001 (FICA) and the Prevention of Organised Crime Act 121 of 1998 (POCA). Despite this robust framework, the insolvency sector remains vulnerable and comparatively under-examined. This study critically evaluates the structural and procedural vulnerabilities within insolvency proceedings that may facilitate money laundering, highlighting regulatory gaps and practical challenges faced by insolvency practitioners. Insolvency in South Africa is primarily governed by the Insolvency Act 24 of 1936, and the Companies Act 71 of 2008, which prioritise creditor protection and asset distribution rather than explicit anti-money laundering (AML) safeguards. Consequently, insolvency processes may be exploited through fraudulent asset transfers, concealment of beneficial ownership, undervaluation of assets, and manipulation of creditor claims. Employing a doctrinal methodology, the paper analyses relevant legislation, regulatory materials, and academic literature, while examining practitioner experiences in complying with AML obligations. It identifies tensions between regulatory expectations and operational realities and proposes targeted reforms to enhance AML integration within insolvency practice, thereby strengthening South Africa’s broader financial crime framework.