FIC helps net R5bn in criminal proceeds

• Banks the largest contributors of regulatory reports with close to 4-million cash threshold files

The Financial Intelligence Centre (FIC), which monitors financial transactions to detect possible criminal activity, contributed to the recovery of more than R5bn in criminal proceeds in the 2021/2022 financial year, according to its annual report tabled in parliament this week.

The Financial Intelligence Centre (FIC), which monitors financial transactions to detect possible criminal activity, contributed to the recovery of more than R5bn in criminal proceeds in the 2021/2022 financial year, according to its annual report tabled in parliament this week.

The centre’s role is to identify the proceeds of crime and assist in the combating of money laundering and the financing of terrorism, which is high on the government’s agenda after the negative findings about SA’s regime by the Financial Action Task Force (FATF), the international body that sets standards. SA is at risk of being greylisted by the FATF, which would have dire consequences for the economy, particularly for the financial sector.

To strengthen the supervisory role of the FIC and comply with FATF requirements, proposed legislation is currently before parliament to expand the list of accountable institutions that have to report to it.

A total of 45,555 institutions were registered as accountable and reporting institutions with the FIC in 2021. These include banks, attorneys, property practitioners, long-term insurers, car dealers and others. Accountable institutions have to submit reports on all cash transactions of R25,000 and above. They filed more than 5-million regulatory reports including 533,277 suspicious and unusual transaction reports in 2021/2022.

An FIC statement on Thursday on its annual report noted that the banking sector was the largest contributor of regulatory reports, having filed close to 4-million cash threshold reports and 379,363 suspicious and unusual transaction reports during the year.

“Using the regulatory reports it received from accountable and reporting institutions and other data, the FIC produced 3,114 financial intelligence reports during 2021/2022, for use by law enforcement and other competent authorities in their investigations, prosecutions and applications for forfeiture of assets,” the statement said.

The FIC contributed to the recovery of more than R5bn in criminal proceeds.

“To assist various institutions in identifying, mitigating and managing inherent money laundering and terrorist financing risks they face, the FIC published risk assessment reports on seven sectors including property practitioners, legal practitioners and gambling institutions.”

The FIC and supervisory bodies conducted 1,143 inspections after which the FIC, the Prudential Authority (PA) of the Reserve Bank and Financial Sector Conduct Authority imposed financial penalties for noncompliance, to the value of more than R41.6m.

“Over the past few years, there has been a noticeable increase in the uptake and use of the FIC’s financial intelligence,” the centre’s director, Xolisile Khanyile said.

“The focus on following the money flow is critical in uncovering individual and syndicated crimes. The FIC plays a pivotal role in its provision of financial intelligence to law enforcement and other competent authorities for their investigations and applications for asset forfeiture as the FIC does not itself conduct investigations.”

Khanyile chairs the SA AntiMoney Laundering Integrated Task Force (Samlit) a publicprivate partnership that includes the Reserve Bank, 26 banks and banking industry bodies, the National Prosecuting Authority’s Investigative Directorate and Asset Forfeiture Unit, the Hawks, SA Revenue Service and the Special Investigating Unit.

INTERVENTIONS

Over the past two years interventions by Samlit and the Fusion Centre, which consists of law enforcement authorities, security agencies and investigative bodies, led to the preservation of and directives to freeze accounts in the amount of R86m in criminal assets. Over the same period, the work of the Fusion Centre yielded the preservation and recovery of criminal assets of about R1.75bn.

In his introduction to the annual report, finance minister Enoch Godongwana said the Fusion Centre and Samlit had “shown real successes in helping to fight fraud and corruption regarding the misuse of Covid19 relief funds.”

OVER THE PAST FEW YEARS, THERE HAS BEEN A NOTICEABLE INCREASE IN THE UPTAKE AND USE OF FIC INTELLIGENCE