Money laundering by terror organisations and organised crime syndicates is one of the biggest challenges facing governments world wide.
In South Africa this has led to the implementation of the following Acts:
Money Laundering is considered to be the third biggest industry in the world which in addition makes one realise how vast the problem really is. Financial Action Task Force (FATF) has an agreement with governments all over the world. Governments especially united in the fight to combat money laundering and crime. FATF was founded in 1989 by the World’s largest countries known as the G7 countries. Today its activities are to combat money laundering for criminal and terrorist purposes. It also represents most countries around the world who have money laundering legislation in place. FATF has issued 40 recommendations for action against money laundering. Therefore it also forms the basis of legislation in many countries. These recommendations are regularly being reviewed and updated, for legislation worldwide to keep it on track.
International pressure on countries to adopt measures that meet with FATF requirements has led to the Financial Intelligence Centre Act (FICA) 2001.
FICA added to POCA and repeated certain parts of POCA. This meaning the two Acts have to be read in partnership with each other. POCATARA was added in 2004.
First of all the money laundering legislation, does not act upon the crime itself it deals with the process of the crime.
Let us look at each of these acts for a better understanding:
To introduce measures to fight organised crime, money laundering and also criminal gang activities.
The main purpose of FICA is to require a long list of accountable institutions and in addition to follow certain procedures and reports. To see suspicious activities or unusual transactions relating to combat money laundering. Accountable businesses themselves are not necessarily statutory bodies, but include people and business that can be used for money laundering purposes.
The list of accountable institutions define in FICA includes the following:
FICA provides for a Financial Intelligence Centre (FIC) lending its name to the Act and a money laundering Advisory Council to help combat money laundering.
FIC has to establish and maintain an effective policy and compliance framework. They provide high quality and timely financial intelligence to help South African authorities fight against crime, money laundering and terrorist financing.
Section 17 of FICA establishes the Money Laundering Advisory Council, an advisory body on fighting money laundering.
The anti-money laundering measures has been broadened because of money laundering by terrorist organisations. In South Africa this led to the 2004 POCADATARA Act. In section 28A of FICA it requires the reporting of any offence linked to terrorist activities, including terrorist financing.
The South African Reserve Bank is the country’s central bank and therefore fulfill the role of managing the national money and banking system. This includes supervision and bank regulations.
SARS monitors the activities of Financial Institution operating in South Africa to ensure that they adhere to regulations and laws, including Bank Act and also the Mutual Bank Act.
The main duties of accountable institutions includes the following:
Accountable institutions must have all the necessary policies, procedures and systems while ensuring full compliance with the FICA Act and other applicable money laundering or terrorist financing legislation.
An essential element in combating money laundering is therefore, getting to know your customer (KYC).
To prevent banks from being used by criminal elements for money activities. Related procedures also enables banks to better understand customers and their financial dealings. This helps them manage their risks skilfully. Banks usually frame their KYC policies to cover the following four key elements:
Kyc controls typically include the following:
Most of all these procedures are critical functions to access and monitor customer risk and legal requirement to also comply with Anti-money laundering (AML) laws.
Penalties for offences range from 5 years imprisonment or consequently a fine of up to R10 million. 15 years imprisonment and / or fine of R100 million.
Penalties in terms of FICA:
Offences subject to penalties includes the following:
The introduction of these acts has therefore gone a long way in aligning SA with the rest of the International community.
WE as citizens are the heart of where it all happens, and managing the vast economies and currencies of the world requires all of us to carry a little bit of the responsibility.
This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.