New unit for sharing intelligence on crimes in finance
Law enforcement authorities’ ability to investigate and prosecute complex financial crime is to be boosted by the creation of a special forensic service unit responsible for monitoring money laundering and suspicious financial transactions.
The Financial Intelligence Centre (FIC) said on Tuesday it has established a new shared state forensic capability (SFC) unit so that specialised resources in forensic accounting, financial analysis and related services can support law enforcement and other authorities in high priority criminal matters. The FIC described the unit as a “game changer” enhancing its ability to share intelligence.
The SFC unit means forensic support can now be provided to mandated entities in terms of the FIC Act, which was effectively updated in 2022 by the General Laws Amendment Act that expanded FIC objectives to the production of forensic evidence. Under the FIC Act all accountable and reporting institutions have to register with the FIC and submit reports on all cash transactions of R50,000 and above.
“Work to establish the SFC unit will begin immediately, with a small core team focusing on increasing capacity,” the FIC said. “It is expected that the setup phase for the SFC will take six months, with the capability being launched as fully operational by month seven.”
The formation of the unit comes a little more than a month after SA was greylisted by the Financial Action Task Force (FATF) for having insufficient controls to counter illicit activity such as money laundering and the funding of terrorism.
The failure of the National Prosecuting Authority (NPA) to successfully prosecute cases involving financial crime was cited as one of the main reasons for the greylisting, ranked SA alongside the likes of Albania, Syria, South Sudan and Yemen.
The formation of the SFC unit was prescient given that at least three SA banks — Standard Bank, Absa and Sasfin — were named in an explosive Al Jazeera investigation implicating them in laundering money for a global gold smuggling mafia.
“As a result of SA being greylisted, and as part of the FATF action plan, the police are expected to send more requests to the FIC for financial intelligence,” the FIC said. “The SFC unit will be able to produce forensic reports that law enforcement agencies can use in complex money-laundering cases. This unit will also be available to go to court and testify on the financial flows and the forensic products they share with law enforcement agencies, such as the police and prosecutors.”
The SFC initiative, which was established in the FIC with effect from April 1, is the culmination of work begun in October 2020 by officials from agencies in the Anti-Corruption Task Team (ACTT), which is co-chaired by Hawks head Godfrey Lebeya and national director of public prosecutions Shamila Batohi. It includes the FIC, Special Investigating Unit, the Investigating Directorate of the NPA, Asset Forfeiture Unit, SA Police Service, SAPS crime intelligence, State Security Agency.
Christopher Malan, the FIC’s
executive manager for compliance and prevention, will lead the SFC task team.
The initial funding to set up the SFC unit came from finance minister Enoch Godongwana’s February 2023 budget in which another R265.3 m over three years was made available to the FIC to tackle organised and financial crime.
Also aiding in the task to combat financial crimes is the Fusion Centre, a collaboration between law enforcement agencies and the FIC and the SA AntiMoney Laundering Integrated Task Force. Both initiatives bring together resources to combat money laundering, terrorist financing and other illicit financial activity.