Anti-money laundering task force reports successes

The SA Anti-Money Laundering Integrated Task Force (Samlit) says in a report of its activities for the 15 months to end March 2022 that it is successful in fighting crime by making it difficult for criminals to use the country’s financial system to enable their illegal activities.

“Removing the prospect of profitability from crime is pivotal to stemming crime,” says Advocate Xolisile Khanyile, director of the Financial Intelligence Centre (FIC) and chair of the Samlit steering committee in her report on Samlit’s activities.

Read: Dirty money: SA’s David and Goliath situation

However, a closer look at the figures indicates that it is only scratching the surface.

For example, the Samlit report states that its collaboration with the Fusion Centre, itself a collaborative hub comprising representatives from law enforcement and intelligence agencies, has led to interventions resulting in preservations and directives to the amount of only R86 million in criminal assets over the last two years.

Millions vs billions

Consider that annual reports of state-owned companies list billions of rands lost through fruitless and wasteful expenditure each year, mostly as a result of corruption.

When Moneyweb reports on a scam, individual readers often send emails relating how they lost money, often several thousand rand at a time. Other media also report new fraud and criminal activities every day.

Samlit was established towards the end of 2019, led by the FIC. It works in cooperation with 26 member banks, the South African Reserve Bank’s Prudential Authority, the FIC and industry representatives to put up a unified fight against financial crime.

Key achievements

Samlit says its key achievements in the 15 months include contributing to investigations, arrests, prosecutions, forfeitures and convictions of persons involved with serious money laundering and predicate offences including fraudulent schemes, illicit financial flows, kidnapping, the illegal wildlife trade, procurement fraud and large-scale corruption. It says it also made a valuable contribution to the work of the Fusion Centre.

Read: Gupta looting: ‘International financial system is culpable’

Khanyile says Samlit effects its work through research on identified crime types, which leads to identification of trends and development of typologies, and that the learnings from the collaborative work are significant for all involved.

“It is leading to increased understanding on various levels. The transaction environment for criminal activity is better understood,” she says.

“There is increasing refinement in the responsiveness among the banks as reporters and this is in turn enhancing the depth of intelligence reports being produced for law enforcement, who benefit from the FIC’s analysis of the reports submitted by the banks.”

The Samlit report includes several examples of its successes, such as the arrest of syndicate members involved in rhino poaching and the investigation of highly-placed public officeholders for allegations of fraud and corruption.

Where specific criminal activities are identified, the tactical arm of Samlit engages with the FIC and law enforcement.

“This allows members to quickly identify and share detail which can be analysed and passed on to law enforcement and prosecutorial authorities,” says Khanyile in her report.

Pieter Alberts, acting executive manager for monitoring and analysis at the FIC, says the multifaceted nature of crime and criminal behaviour required a swift response from both the public and private sectors to pre-empt, identify and deal with financial crime.

“Samlit’s extraordinary successes over a relatively short period is testimony to what can be achieved through collaborative efforts and sets the standard for similar public-private partnerships, domestically and across the continent,” says Alberts.

Figures

Samlit reports that the unified fight against crime achieved the following during the 15 months under review:

  • 59 preservation and/or restraint orders obtained;
  • Suspected criminal assets forfeited and/or confiscated to the value of more than R5 billion;
  • 45 affidavits issued in support of asset seizures and criminal prosecutions;
  • 258 accounts identified to have received proceeds of crime;
  • 3 793 reactive and proactive financial intelligence reports disseminated; and
  • 38 natural persons or entities found guilty and sentenced in 19 prosecutions.

Moneyweb asked if this was all …

“During the period covered in the Samlit report, several matters were raised through the partnership and logged as tactical operations groups (TOGs) for follow up by the FIC or the Fusion Centre,” says the FIC in its response.

“The orders referred to in the Samlit report relate to three specific cases that were dealt with through TOGs within the Samlit partnership.

“As part of its day-to-day delivery during the 2021/22 financial year, the FIC was involved in the freezing of suspected proceeds of crime to the value of R204 million. In addition, the FIC’s financial intelligence assisted in contributing to the recovery of more than R5 billion in the financial year.

“The work of the Fusion Centre contributed to the recovery of more than R1.75 billion over the last two financial years.”

The report mentions just 258 bank accounts identified to have received proceeds of crime. How difficult can it be to identify a suspicious bank account?

“The banking sector is the FIC’s biggest source of regulatory reports. In the FIC’s financial year, from 1 April 2021 to 31 March 2022, the 35 banks registered with the FIC filed close to 84 percent of all the regulatory reports we received.

“This was made up of more than 3.9 million cash threshold reports and close to 380 000 suspicious and unusual transaction reports. Financial analysis conducted determined that 258 accounts received proceeds of crime that were linked to ongoing criminal investigations,” says the FIC.

Banks are proactive

The FIC adds that banks are guided by legislative and regulatory requirements and also have their own risk-based approach to reporting suspicious and unusual transactions.

So it seems crooks are finding it difficult to open up bank accounts in the first place.

“[The banks’] and other regulatory reports, and the information they contain, are the building blocks for the analysis and research the FIC conducts to produce financial intelligence,” says the FIC.

“In turn, this financial intelligence is used by law enforcement and other competent authorities for their investigations, prosecutions [and] applications for forfeiture of criminal assets. In this way the banks, and even more so the partnership, are helping to identify, disrupt and stem financial crime.

“The work of the Fusion Centre contributed to at least 96 criminal prosecutions in the last two financial years of which 36 matters were finalised with guilty verdicts. These matters are linked to 164 companies and individuals.

“It is important to note that FIC does not itself conduct investigations nor does it prosecute matters in a court of law,” says the FIC.

Samlit relies on its members to provide people and resources.

“Members make available appropriately skilled and experienced representatives who add value to the objectives and initiatives of Samlits,” says the FIC.

“The partnership approach, which has been adopted by several financial intelligence units across the globe, is an extension of the existing reporting regime in terms of the FIC Act and is designed to deepen members’ understanding of how crimes are committed and to speed up the flow of data and intelligence to assist law enforcement and prosecuting authorities.”

“This approach does not require additional funding as each partner performs their duties within the bounds of the legal framework which allows information to flow between the regulatory authorities, the banks and other partners as provided for in the FIC Act.”

Read: Sars’s role in combatting tax evasion and money laundering

Source: moneyweb.co.za