Financial crime can have a devastating effect on financial systems, consumer confidence and assurance of investors. More importantly, financial crime can occur at profound human cost.

Without the necessary safeguards or concerted containment efforts, criminals get to reap the benefits of their actions and continue the vicious cycle.

To help ensure the safety and integrity of South Africa’s financial system, the Financial Intelligence Centre (FIC) actively collaborates with other law enforcement agencies, investigative bodies, and prosecutorial authorities.

Here are five things you should know about the FIC:

1 Following the money to identify wrongdoing

To help identify the proceeds of crime and help combat money laundering and terrorist financing, the FIC uses a follow-the-money approach. The FIC analyses and interprets transactional and other information it receives in regulatory reports from business and other sources to do this.

2 Producing financial intelligence

Stemming from the FIC’s analysis, the financial intelligence reports it produces are shared with competent authorities, including law enforcement and prosecutorial authorities for their use in investigations, prosecutions, and applications for forfeiture of criminal assets.

Importantly, the FIC does not itself conduct investigations, does not prosecute matters in a court of law nor does it share accountable institutions’ regulatory reports.

3 Ensuring South Africa conforms to global standards

The FIC ensures that South Africa has its finger on the pulse in terms legislation for anti-money laundering and combating of the financing of terrorism (AML and CFT).

This includes assisting in improving the country’s AML and CFT legislative framework which strengthens efforts to combat financial crime, here and abroad.

4 Forging a united front against financial crime

Financial crime infiltrates all aspects of society and requires a united effort from government, civil society, and the private sector to tackle it effectively. With their proximity and knowledge of the transaction environment, business is pivotal as the eyes and ears for law enforcement.

While all citizens have a responsibility to report suspicious and unusual transactions and behaviour, the Financial Intelligence Centre Act (FIC Act) requires certain categories of business – known as accountable institutions – to fulfil compliance obligations. Among these is the requirement to register with and to file regulatory reports to the FIC.

5 Enforcing compliance

The FIC inspects accountable institutions to assess whether they are compliant with FIC Act obligations. Where non-compliance is found, the FIC may impose administrative sanctions that are proportionate, dissuasive and effective.

Administrative sanctions may include:

• A caution not to repeat the conduct that led to the non-compliance
• A formal reprimand
• A directive to take remedial action
• A financial penalty of up to R10 million for a natural person, and up to R50 million for a legal person.

Sanctions are also published on the FIC website as a further deterrent to non-compliance. Join us in making South Africa’s financial system intolerant to abuse.