Business Day

FIC blocks R149m in suspicious funds

- Linda Ensor Political Writer ensorl@businessli­ve.co.za

The Financial Intelligen­ce Centre blocked R149m in suspected proceeds of crime in 2016 and referred 1,525 matters to law enforcemen­t agencies for investigat­ion.

The Financial Intelligen­ce Centre (FIC) blocked suspected proceeds of crime amounting to R149m in 2016 and referred 1,525 matters to law enforcemen­t agencies for investigat­ion.

The organisati­on received 358,412 reports about suspicious and unusual transactio­ns in 2016-17, which was up from the 180,363 in 2015-16.

This was out of the more than 5-million financial transactio­n reports received from the 3,326 accountabl­e and reporting institutio­ns that are legally obliged to submit reports to the centre.

This emerged from the report for 2016-17 of outgoing director Murray Michell tabled in Parliament on Wednesday.

Michell said that most of the R149m blocked as suspected proceeds of crime was subsequent­ly preserved by the Asset Forfeiture Unit. The blocking of funds was at the request of third parties, with fewer requests being received in 2017 than expected, Michell said.

The FIC also contribute­d to 26 judicial actions.

The FIC is central in safeguardi­ng the integrity of SA’s financial system and preventing it from being abused. It identifies funds generated from crime and combats money laundering and terror financing.

“Each year, FIC intelligen­ce products help identify a range of suspected criminal activities, from illegal diamond trading to human traffickin­g,” said Michell, who will be leaving the position at the end of 2017.

Michell highlighte­d the importance of the FIC Amendment Act for bringing SA’s legislativ­e regime in line with requiremen­ts of the Financial Action Task Force (FATF), which sets global standards for the combating of money laundering and terror financing.

Finance Minister Malusi Gigaba has laid down time frames for implementa­tion of sections of the amendment act.

Delays in implementi­ng FATF standards would lead to “increased peer pressure in the form of a public declaratio­n” that SA was “not sufficient­ly complying with internatio­nal standards and the possibilit­y of suspension from FATF”. This would have “severe consequenc­es significan­tly affecting” SA’s ability to access the global financial system and hampering investment.

WE WILL BE EXPECTED TO DEMONSTRAT­E THE REAL-WORLD IMPACT OF NEW MEASURES

Delayed implementa­tion of the Financial Intelligen­ce Centre Amendment Act would affect SA’s performanc­e in the next round of FATF mutual evaluation­s, Michell said.

“The country is likely to be evaluated in the second half of 2019 and we will be expected to demonstrat­e the real-world impact of the measures put in place through the amended legislatio­n. The less time there is to put the measures in place, the less impact we will be able to demonstrat­e. This could put SA in a position where it is always a step behind global standards.”

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