Advocate Xolisile Khanyile, the director of the Financial Intelligence Centre (FIC), says South Africa will be grey-listed next year because it has not met the requirements of the Financial Action Task Force (FATF) for combating money laundering and terrorism financing.
“I don’t see us escaping grey-listing at all, and that’s not a good experience. Once you are grey-listed, the repercussions are dire,” said in an interview with the Sunday Times Business Times.
“Investors won’t go to a country that has been listed as a high-risk jurisdiction. Once you’re grey-listed, it means you are a high-risk jurisdiction,” Business Times quoted her as saying.
South Africa was assessed by the FATF in 2019 and found seriously wanting.
“Since then, we have seen a lot of improvement, but this doesn’t mean we’ll be able to produce evidence that we’ve got the necessary laws and that we’re effective,” Khanyile said.
“We have failed to deal with corruption and state capture, we’ve failed to even recover the assets that are the proceeds of crime and that have left the country due to state capture.”
She said although the National Prosecuting Agency’s investigative directorate is starting to bring people to court, and collaboration between different law-enforcement entities is improving, they are still badly under-capacitated.
“You need prosecutors who work closely with the FIC so that when we send them reports, they’re able to convert those reports into an investigation.
“These are things we should have prioritised years ago: to have financial investigators, financial analysts, data specialists, forensic accounting skills, investigators who understand how cyber criminals operate.”
Although there is “at least now the political will to beef up the NPA and the Hawks with the right skills”, improvements have been too little and too late.
“What is critical now is that we come back from grey-listing as quickly as possible.”
Khanyile said a lot of money laundering and terrorist financing is facilitated by non-financial entities such as estate agents, casinos and attorneys, who have been shown to be among the most vulnerable to such crimes.
Khanyile was confident that South Africa will be off the grey list in less than two years.
“We’ve seen Mauritius doing it in 20 months, and we can do it as well.”
