As you may well be aware, there have been several changes to FICA legislation within the 2022/2023 period, from cash threshold increases for reporting, Schedule 1 Accountable Institution additions, to considerable amendments to FICA in the form of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act and new Directives 6, 7 and 8 among others. Many of these changes were proactively taken, aimed at preventing a greylisting designation but also reactive responses based on the FATF’s recommendations after South Africa was greylisted.
With this background in mind, the Financial Intelligence Centre issued its 2022/2023 Annual Report on 28 September 2023. We thought it prudent to detail the important considerations, facts, highlights, and learnings from this report in a period that has undergone a significant change:
- The FIC produced 3 424 proactive and reactive intelligence reports and contributed to the recovery of R5.82 billion in criminal proceeds during 2022/2023. Most of the intelligence reports produced in 2022/23 related to money laundering, fraud, bribery and corruption;
- The FATF recognised the significant progress made by South Africa in actioning the 67 recommended actions highlighted in the mutual evaluation report. In response to the greylisting, the South African government has reiterated our commitment to strengthening the effectiveness of its AML, CFT and CPF regime and to resolve the remaining strategic deficiencies identified by the FATF;
- Memoranda of Understanding (MoUs) were entered into with the financial intelligence units of Greece, Uruguay, Japan, Bhutan and Pakistan. This brought the total to 100 in terms of the total number of international MoUs the FIC has had in place as at 31 March 2023. These MoUs commit both parties to working together to ensure that the financial system is safe, stable and sustainable for all citizens;
- The new Forensic Capability division, which expands the FIC’s reach beyond intelligence analysis to include forensic reporting and presenting court testimony, will become operational in the 2023/24 financial year;
- The FIC blocked R92.2 million as suspected proceeds of crime;
- A total of 946 compliance inspections were conducted. The supervisory bodies issued 544 inspection reports, while the FIC issued 402 inspection reports;
- 75% (302 out of 402) of the FIC’s compliance inspections conducted during 2022/23, focused on legal practitioners. Close to 21% of legal practitioners were compliant and required no further action, the assumption being that 79% were non-compliant;
- These inspections revealed non-compliance in some key areas, notably, legal practitioners struggled with conducting customer due diligence, maintaining proper records of customer due diligence and developing and implementing RMCPs;
- The FIC prescribed remedial actions for 313 of the total 402 accountable institutions that were inspected during the year;
- The FIC followed up with the 313 non-compliant institutions and determined that 170 inspected entities (54%) changed their compliance behaviour and remediated their non-compliance;
- The total financial penalty of the sanctions imposed by the FIC was valued at R872 388, of which R436 194 was payable and the remainder was suspended;
- 45 392 accountable institutions submitted approximately 5.3 million regulatory reports, including:
- 4 249 189 cash threshold reports (CTRs)
- 558 348 suspicious and unusual transaction (STRs) reports
- 7 terrorist property reports (TPRs)
- 503 062 international funds transfer reports (IFTRs)
- The FIC hosted 33 awareness sessions via webinar. The webinars were attended by 16 801 people, which is more than double the number that attended in the previous year.
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