News24.com | Financial Intelligence Centre establishes forensic unit to fight crime in wake of greylisting

FIC opened a new forensic unit on Saturday, which will prosecute complex financial crimes. Having forensic capacity will help ensure that matters can be taken to court quicker.

• FIC opened a new forensic unit on Saturday, which will prosecute complex financial crimes.
• Having forensic capacity within FIC will help ensure that matters can be taken to court quicker.
• This comes as SA tries to address its shortcomings in tackling illicit financial flows and the financing of terrorism in the wake of the greylisting.
• For more financial news, go to the News24 Business front page.

The Financial Intelligence Centre (FIC) has established a forensic unit to help the government fight corruption and prosecute complex financial crimes, part of an effort to have the nation removed from a global watchdog's dirty money watchlist.

The unit, which opened on Saturday, will complement the FIC's existing structures, the center's Executive Manager Christopher Malan said Friday in an interview. It's expected to help expedite asset forfeiture and prosecutions, he said.

The FIC is mandated to assist in identifying the proceeds of crime, and combating money laundering, the financing of terrorism and the proliferation of weapons of mass destruction.

Having forensic capacity will help ensure that matters can be taken to court quicker, especially when it comes to dealing with major corruption and state capture-related crimes, he said. 

The Financial Action Task Force (FATF), a Paris-based agency, placed South Africa on its so-called gray list in February because of the state's shortcomings in tackling illicit financial flows and the financing of terrorism.

The decision followed an era of endemic government corruption and state capture under former President Jacob Zuma that his successor Cyril Ramaphosa estimates cost the economy at least R500 billion.

An extended stay on the grey list may damage investor sentiment toward South Africa, leading to capital and currency outflows.

READ | ANALYSIS | The real fall-out from greylisting

Some of the issues SA needs to address in order to be removed include: a sustained increase in investigations and prosecutions of serious and complex money-laundering cases; ensuring the authorities have timely access to accurate and up-to-date beneficial ownership information; and improving risk-based supervision of designated non-financial businesses and professions, which the FIC oversees.

National Treasury has allocated R265.3 million to the FIC, which the agency will use to hire staff for the forensic unit and its expanded supervisory role, Malan said.

"The lion’s share of the funding is going to go to increasing the supervision capacity," he said.

In December the FIC's purview was increased to include designated non-financial businesses and professions, such as property practitioners, casinos, gaming houses, trusts and crypto assets. 

READ | Estate agents, lawyers and others face crackdown as SA tries to avoid greylist

"We are looking at close to 60 000 entities we would have to bring into the net," a ten-fold increase, and the aim is to have them all registered by December, Malan said. "The FATF needs us to account on this early next year."

To provide better data on the ownership structures of companies and trusts, the FIC's corporate registry — the Companies and Intellectual Property Commission, which administers about 2.1 million active entities — will initiate the compilation of a beneficial ownership registry next week, subject to regulations being passed, Malan said. 

"The regulations are in the final stage of drafting," he said. "We are hopeful they will be considered on Monday and, with that, the CIPC will have the legal mandate to receive beneficial ownership information from companies."