FIC under severe pressure

BUDGET BARRIERS: FINANCIAL INTELLIGENCE CENTRE’S SMALL, CAPABLE TEAM TAKING STRAIN

The unit shot to prominence when it cast a spotlight on the Gupta family’s financial transactions.

In the 2017-18 financial year, information supplied by the Financial Intelligence Centre (FIC) helped to shut down a multimillion-rand drug ring operated by foreign nationals; a fraudster’s virtual currency account; activities of a syndicate illegally supplying food to Zama-Zamas; a brothel exploiting Thai women; and a Ponzi scheme promising huge investment returns.

In all these cases, the individuals are being prosecuted.

The FIC analysed the suspects’ spending patterns, bank statements and business interests, and worked with other crime prevention bodies such as the Hawks, SA Police Service and the Asset Forfeiture Unit.

These details, among others, were disclosed in the FIC’s latest yearly report, which received an unqualified audit from the attorney-general’s office, and was recently released to parliament.

FIC director Xolisile Khanyile says: “The report marks 15 years since the organisation was established as SA’s national centre for gathering and analysing financial data in order to produce financial intelligence reports.”

The FIC collects information and analyses suspicious transactions reported by about 3 300 financial or nonfinancial institutions. However, South Africa is under pressure to comply with international regulations. Implementing new amendments to the FIC Act was a key focus during the reporting period and will remain so in the next financial year.

The upcoming assessment – by the International Monetary Fund, Financial Action Task Force, and Eastern and Southern Africa AntiMoney Laundering Group – of South Africa’s antimoney laundering, counterterror financing, and proliferation of financing regime and systems, will also require some focus.

“Our team is small and highly capable but growing recognition of our work and increasing responsibilities in terms of the amended FIC Act are putting additional strain on the organisation’s resources,” says Khanyile.

Important work

The unit shot to prominence (and aroused the ire of some politicians) when its work cast a spotlight on financial transactions conducted by the Gupta family.

It’s believed that a record of suspicious transactions reported to the FIC prompted the four major banks to close Gupta company Oakbay’s bank accounts between December 2015 and April 2016.

In the 15 years since the FIC was established, demand for the financial intelligence reports it develops has grown. In 2003-04, it contributed to 161 criminal investigations, and in 2017-18 to 2 243. It also referred 1 470 matters to domestic and foreign authorities for further investigation.