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Financial Intelligence Centre Unveils Insights on Money Mule Activity in South Africa

The Financial Intelligence Centre (FIC) has released its inaugural Financial Crime Insights report, highlighting the prevalence and patterns of money mule activity in South Africa.

Overview of the Report

The report provides a comprehensive analysis of suspicious and unusual transaction reports filed to the FIC between August 2016 and July 2023. It aims to enrich our understanding of money mule activity in South Africa and how it is used to launder money.

Key Findings

• Money mules often facilitate financial schemes, illicit financial flows, romance scams, job scams, and other types of scams, allowing criminals to transfer illicit proceeds between banks, countries, currencies, or cryptocurrencies.
• The majority of money mule activity identified in the reports and analyzed by the FIC took place in the Gauteng and Western Cape provinces.
• Accountable institutions did not provide sufficient information on suspected money mule activity in the regulatory reports they submitted to the regulator.

Recommendations

The FIC is expanding its list of indicators relating to money mules on its registration and reporting system, goAML, to enhance categorization of money muling and related financial crimes. The analysis found extensive use of shell companies to host fraudulent funds, while most persons involved in money mule or illicit financial flow activities were South Africans.

Useful Information for Detecting and Preventing Money Muling

• Possible money mule perpetrators’ profiles
• Transaction locations
• Types of industries involved
• Useful account information and controls

Call to Action

“The inaugural Financial Crime Insights report is an important first step in enriching our understanding of money mule activity in South Africa and how it is used to launder money,” said Pieter Smit, acting Director of the FIC. “We will continue to work with law enforcement agencies and other stakeholders to combat money laundering and prevent the misuse of financial systems.”

Legislative Mandate

The FIC Act 2001 (Act 38 of 2001) mandates the FIC to assist in the identification of proceeds of crime and combating money laundering, terrorist financing, and proliferation financing. Under this legislation, financial and non-financial institutions are required to register with and file various regulatory reports to the FIC.

International Cooperation

In February 2023, South Africa was placed under increased monitoring by the Financial Action Task Force (FATF), the global anti-money laundering and combating of terrorist financing watchdog organization. The FIC will continue its contribution in work towards exiting South Africa from the grey list as soon as possible.

For more information on the FIC and its efforts to combat financial crime, please visit www.fic.gov.za