Money Laundering Techniques Exposed in South Africa: A Threat to National Security
The scourge of money laundering continues to plague South African society, with organised crime and terrorist activities reaping the benefits of illicit funds being funneled into legitimate businesses. However, a major crackdown is underway, thanks to the Financial Intelligence Centre Act 38 of 2001 (FIC Act), which aims to make it increasingly difficult for criminals to launder their ill-gotten gains.
The FIC Act: A Strong Stance Against Money Laundering
According to experts, any individual found in possession of or using funds linked to illegal activities will be liable for prosecution. The FIC Act is clear: those who knowingly or should have reasonably known that the funds are tainted by crime will face the full force of the law.
Accountable Institutions Under Scrutiny
But it’s not just individuals who are being held accountable - several ‘accountable institutions’, including:
- Banks
- Investment brokers
- Estate agents
- Attorneys
- Long-term insurance brokers
are also under scrutiny. These entities are required to comply with the FIC Act, which means they must verify the identity of their clients and ensure that all transactions are legitimate.
Due Diligence: A Must for Individuals and Institutions
To this end, individuals transacting with these institutions will be required to provide identification documents and declarations about the source of their income and the type of activities they will be engaging in. No accountable institution is permitted to establish a business relationship with an anonymous client or one with a false or fictitious name.
The Consequences of Non-Compliance
Even with these measures in place, significant due diligence is still required by individuals and accountable institutions to prevent illegal proceeds from being integrated into the economy. The stakes are high, and those who fail to comply risk not only reputational damage but also prosecution under the FIC Act.
A Collaborative Effort Against Money Laundering
As South Africa continues to grapple with the threat of money laundering, it’s clear that a collaborative effort between law enforcement agencies, accountable institutions and individuals is needed to prevent this scourge from undermining national security. By working together, we can ensure that our economy remains free from the taint of illicit funds and that those who seek to exploit our system are brought to justice.