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1 – 8 of 8Money laundering in South Africa received legislative attention as recently as 1992. The advances in technology and particularly electronic funds transfers brought a dramatic…
Abstract
Money laundering in South Africa received legislative attention as recently as 1992. The advances in technology and particularly electronic funds transfers brought a dramatic increase in organised crime. Furthermore, with its return to the international arena, South Africa was becoming increasingly attractive for drug traffickers, not only as a transit destination but also as an end destination. This paper gives a historical overview of the legislation dealing with money laundering, focusing particularly on the duty to report.
The subject of this article is the prevention and control of money laundering in South Africa. In particular, it focuses on the reporting obligations under existing legislation…
Abstract
The subject of this article is the prevention and control of money laundering in South Africa. In particular, it focuses on the reporting obligations under existing legislation and the proposed Money Laundering Control Bill.
Howard Chitimira and Sharon Munedzi
This paper explores the historical aspects of customer due diligence and related anti-money laundering measures in South Africa. Customer due diligence measures are usually…
Abstract
Purpose
This paper explores the historical aspects of customer due diligence and related anti-money laundering measures in South Africa. Customer due diligence measures are usually employed to ensure that financial institutions know their customers well by assessing them against the possible risks they might pose such as fraud, money laundering, Ponzi schemes and terrorist financing. Accordingly, customer due diligence measures enable banks and other financial institutions to assess their customers before they conclude any transactions with them. Customer due diligence measures that are utilised in South Africa include identification and verification of customer identity, keeping records of transactions concluded between customers and financial institutions, ongoing monitoring of customer account activities, reporting unusual and suspicious transactions and risk assessment programmes. The Financial Intelligence Centre Act 38 of 2001 (FICA) as amended by the Financial Intelligence Centre Amendment Act 1 of 2017 (Amendment Act) is the primary statute that provides for the adoption and use of customer due diligence measures to detect and combat money laundering in South Africa. Prior to the enactment of the FICA, several other statutes were enacted in a bid to prohibit money laundering in South Africa. Against this background, the article provides a historical overview analysis of these statutes to, inter alia, explore their adequacy and examine whether they consistently complied with the Financial Action Task Force Recommendations on the regulation of money laundering.
Design/methodology/approach
The paper provides an overview analysis of the historical aspects of the regulation and use of customer due diligence to combat money laundering in South Africa. In this regard, a qualitative research method as well as the doctrinal research method are used.
Findings
It is hoped that policymakers and other relevant persons will adopt the recommendations provided in the paper to enhance the curbing of money laundering in South Africa.
Research limitations/implications
The paper does not provide empirical research.
Practical implications
The paper is useful to all policymakers, lawyers, law students and regulatory bodies, especially, in South Africa.
Social implications
The paper advocates for the use of customer due diligence measures to curb money laundering in the South African financial markets and financial institutions.
Originality/value
The paper is original research on the South African anti-money laundering regime and the use of customer due diligence measures to curb money laundering in South Africa.
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The purpose of this paper is to enlighten the reader about the development in tax law. Moreover, the author intends to show that other measures could be implemented to supplement…
Abstract
Purpose
The purpose of this paper is to enlighten the reader about the development in tax law. Moreover, the author intends to show that other measures could be implemented to supplement the existing machinery.
Design/methodology/approach
The paper explores the duty vested in the courts to probe the merits of transactions meant to evade or avoid the burden of tax. So much of the text is based on case law. The methodology is based on literature research rather interpersonal research.
Findings
The paper highlights that the current tax machinery has solved a number of tax issues. However, the machinery has not addressed the problem of fraud committed in the banking sector. The paper therefore recommends solutions to this problem.
Research limitations/implications
The paper was formulated before the current tax laws where implemented. The current law contains the solution this study advanced. In a sense, this study examines the impact of the current law and the duty of the court to probe the merits of impeachable transactions.
Practical implications
The study would give the legislature food for thought and would also guide the courts with matters of tax fraud.
Originality/value
Though the original recommendations form part of the current statute, this study is still immensely original in delivery and thought. It provide not only an original influence on the court but also the legislature with original solution to the existing problem.
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Money laundering activities were allegedly rampant and poorly regulated in the South African financial markets and financial institutions prior to 1998. In other words, prior to…
Abstract
Purpose
Money laundering activities were allegedly rampant and poorly regulated in the South African financial markets and financial institutions prior to 1998. In other words, prior to the enactment of the Prevention of Organised Crime Act 121 of 1998 as amended (POCA), there was no statute that expressly and adequately provided for the regulation of money laundering in South Africa. Consequently, the POCA was enacted to curb organised criminal activities such as money laundering in South Africa. Thereafter, the Financial Intelligence Centre Act 38 of 2001 as amended (FICA) was enacted in a bid to, inter alia, enhance financial regulation and the combating of money laundering in the South African financial institutions and financial markets.
Design/methodology/approach
The paper provides an overview analysis of the current legislation regulating money laundering in South Africa. In this regard, prohibited offences and measures that are used to curb money laundering under each relevant statute are discussed. The paper further discusses the regulation and use of customer due diligence measures to combat money laundering activities in South Africa. Accordingly, the regulation of customer due diligence under the FICA and the Banks Act 94 of 1990 as amended (Banks Act) is provided.
Findings
It is hoped that policymakers and other relevant persons will use the recommendations provided in the paper to enhance the curbing of money laundering in South Africa.
Research limitations/implications
The paper does not provide empirical research.
Practical implications
The paper is useful to all policymakers, lawyers, law students, regulatory bodies, especially, in South Africa.
Social implications
The paper seeks to curb money laundering in the economy and society at large, especially in the South African financial markets.
Originality/value
The paper is original research on the South African anti-money laundering regime.
Details
Keywords
Ilse Maritha Makkink, Blanche Steyn and Hannes Christo Bezuidenhout
This study aims to investigate the role of freight forwarding companies in detecting and reporting trade-based money laundering. The proximity of freight forwarding companies to…
Abstract
Purpose
This study aims to investigate the role of freight forwarding companies in detecting and reporting trade-based money laundering. The proximity of freight forwarding companies to shipping-related trade-based money laundering red flags places them in an ideal position to detect suspicious transactions.
Design/methodology/approach
The study used semi-structured interviews with expert participants in freight forwarding shipping and compliance aspects around freight forwarding. This study focuses on the South African context.
Findings
Freight forwarding companies are well-positioned to detect, investigate and report on trade-based money laundering schemes. However, the companies are not always aware of the guidelines designed to assist in identifying trade-based money laundering schemes. Thus, freight forwarding companies develop internal processes to identify trade anomalies but are often unable to link trade anomalies to illegal financial flows and trade-based money laundering schemes.
Research limitations/implications
The current regulations on money laundering can be extended to freight forwarding companies by the respective regulators for enhanced anti-money laundering protection. This study is limited to freight forwarding companies in a South African context.
Practical implications
Increased awareness among staff in freight forwarding companies can assist them in identifying trade-based money laundering red flags to detect and prevent trade-based money laundering schemes.
Social implications
This paper assists other role players and policymakers in the trade process to create a better awareness of trade-based money laundering. The limited obligations on freight forwarding companies to comply with anti-money laundering regulations lead to a more volunteer-like compliance practice.
Originality/value
To the best of the authors’ knowledge, this is the first paper that offers insight into the role of freight forwarding companies in detecting trade-based money laundering in South Africa.
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The purpose of this paper is to draw attention to the effect of the growing informal financial sector (IFS) on the effectiveness of anti-criminal finance laws. Specifically, the…
Abstract
Purpose
The purpose of this paper is to draw attention to the effect of the growing informal financial sector (IFS) on the effectiveness of anti-criminal finance laws. Specifically, the growth of the IFS has been brought on by the unprecedented rise in refugee and migrant movement around the world. This paper will focus on how refugee smuggling in the Eastern Mediterranean and Western Balkan region – and the consequent rise of the IFS – has affected the suitability of apply anti-money laundering and financial action task force frameworks in these countries.
Design/methodology/approach
It assesses the effectiveness of national and international legal documents on anti-criminal finance. It also uses data sets and analyses secondary and primary sources to estimate the size and importance of the IFS.
Findings
The exponential and rapid growth of the IFS has undermined efforts to prevent the financing of trafficking, terrorism, corruption and money-laundering. The present legal devices to address criminal finance has been wholly inadequate and counter-productive.
Research limitations/implications
There are limited reliable or accurate data available on the IFS, how much money goes through it or how important it is to criminal activities such as money laundering or terrorist finance. Without field-research, this study remains exploratory.
Practical implications
The growth of the IFS and migratory movement is a complex dilemma that must be accounted for when seeking to truly improve anti-criminal finance laws, especially in developing and transition countries.
Originality/value
This paper demonstrates the importance of considering the IFS and migratory and refugee movements in creating legal instruments to combat financial crime. It also suggests a direction for future research.
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The Fifteenth International Symposium on Economic Crime, on the subject of ‘The Globalisation of Crime — the electronic dimension’ was held at Jesus College, Cambridge University…
Abstract
The Fifteenth International Symposium on Economic Crime, on the subject of ‘The Globalisation of Crime — the electronic dimension’ was held at Jesus College, Cambridge University from 14th to 20th September, 1997. Previous symposia have been convened to discuss a variety of issues relating to economic crime. In recent years, they have focused on areas of concern such as banking secrecy, how to take the profit out of crime, on cross‐border commercial crime, as well as on how to manage the risks of economic crime.