‘Dirty’ money: SA casts net wider

8 June 2006

With the compliance of South Africa’s banking institutions largely secured in the fight against money laundering and the sponsoring of terrorism, South Africa’s Financial Intelligence Centre (FIC) is set to focus on the country’s casinos and estate agents as it expands its operations.

Having established its infrastructure over the past three years, the FIC was ready for “an aggressive focus” to ensure compliance with anti-money laundering and other measures under the Financial Intelligence Centre Act, FIC director Murray Michell told journalists in Cape Town on Monday.

Michell was speaking ahead of Finance Minister Trevor Manuel’s budget vote speech in Parliament on Tuesday.

The FIC, which works with the police and the Special Investigating Unit (the Scorpions) in probing the financial dealings of criminal and their networks, received 19 793 reports of suspicious transactions in 2005/06, bringing the total since its inception to 44 021.

This was a direct result of the enhanced “know your customer” obligations under which banks and other financial institutions in South Africa have been learning to operate, Michell said.

Suspicious transaction reports are analysed by the FIC and, where appropriate, referred to the law enforcement authorities for investigation.

While only a small percentage of these reports have result in prosecution – the Scorpions have successfully prosecuted 39 cases of money laundering to date – a major benefit of these investigations, Michell said, was the subsequent identification of the links that emerged.

This enhanced the understanding of the networks involving suspected criminal individuals, organisations and companies, ultimately leading to greater intelligence capacity.

While South Africa’s estate agents and casinos are next in line, the finances flowing through South Africa’s legal firms – handled by lawyers, advocates and attorneys – are also likely to come under greater scrutiny in the future, according to the FIC.

“It’s the old follow the money story,” Finance Minister Trevor Manuel told journalists at Monday’s briefing.

Manuel expanded on the international aspects of South Africa’s financial intelligence structure, including the presidency of the international Financial Action Task Force (FATF), which works to ensure broader international compliance with anti-money laundering legislation and safeguards against the sponsoring of terrorism.

Having led the FATF for a year, former education minister Kader Asmal relinquishes the presidency in July, having provided the body with developing-country perspectives, including a renewed appreciation of the importance of human rights, and of the link between money-laundering and corruption.

Michell said that extensive interaction on an international level had enhanced the capacity of financial intelligence authorities worldwide to examine the movement of funds between international financial systems.

Michell added that compliance with the Financial Intelligence Centre Act was not simply to do with anti-money laundering measures, but “relates equally to the good governance of our corporates and to tax morality”.

SouthAfrica.info reporter and BuaNews

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