Big win in fight against fraud and corruption in South Africa

 ·30 Sep 2022

The Financial Intelligence Centre (FIC) has contributed to the recovery of over R5 billion in criminal proceeds.

Recent data from the FIC’s latest annual report showed that this is a considerable increase when compared to the year before, where only R3.3 billion was recovered from criminal activity.

The group said that its success was a result of the sheer number of proactive and reactive intelligence reports complied with alongside the efficient use of technology to monitor compliance.

To combat financial crime and non-compliance, a total of over R41.6 million in penalties were imposed on certain South Africans and/or their businesses. These penalties were imposed by the FIC, the South African Reserve Bank, and the Financial Sector Conduct Authority.

Finance minister Enoch Godongwana said that the pooling of resources from across authorities such as law enforcement, supervisory bodies and intelligence services is critical to the security of South Africa’s financial system. If criminal activity is left unchecked, it hinders the country’s growing economy, he said.

Godongwana said that over the past few years, there had been a noticeable increase in the uptake and use of FIC’s intelligence, which tracks transactions and other payment avenues, in the fight against crime. “The following of money flows is critical in uncovering individual and syndicated crimes,” it said.

Under the FIC Act, institutions are brought within the ambit of the centre and subsequently probed. At the end of the year of review, 45,555 South African institutions were confirmed as active registrations within the ambit of the FIC Act.

Of those institutions, over five million regulatory reports were filed by the end of 2021. Half a million (533,277) suspicious and unusual transaction reports were received.

Regulatory changes

The government is also working to actively fast-track financial bills that could improve South Africa’s economic system and its security by strengthening the methods of mitigating financial crime.

In light of a possible greylisting, the finance minister recently tabled the Anti-Money Laundering and Combating Terrorism Financing Amendment Bill.

The National Treasury noted that when in law, it will better align the country with recommendations made by international watchdog the Financial Action Task Force (FATF) and improve its resilience to corruption and financial crime.

The bill will amend other acts dealing with certain sectors of the economy that can and have been used by criminals to leverage monetary gain, including:

  • Trust Property Control Act;
  • Nonprofit Organisations Act;
  • Financial Intelligence Centre Act;
  • Companies Act, and;
  • Financial Sector Regulation Act.

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