NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER 1156
DATE OF PUBLICATION: 19 APRIL 2010
Mr K S Mubu (DA) to ask the Minister of Finance:
Whether any measures are in place to prohibit laundered money from entering
South Africa; if not, why not; if so, what are the relevant details?
NW1314E
REPLY:
The Financial Intelligence Centre Act, 2001 (Act 38 of 2001), provides for
the regulatory control measures that allow for the transparent flow of
funds and property. In other words, it establishes the regulatory
framework to facilitate the prevention, detection, investigation and
prosecution of money laundering and terror financing activities. The
control measures apply to a variety of financial and non-financial
institutions referred to in the Act as accountable institutions. The money
laundering control measures under the Act imposes certain obligations on
accountable institutions. One such obligation is the requirement to
establish and verify the identities of their clients. The underlying
principle of this obligation is that institutions must know who they are
doing business with. Other requirements under the Act include the duty to
keep records of their clientâs identities and their transaction activities.
The purpose of this requirement is to ensure that a transaction or a
series of transactions can be reconstructed during an investigation,
clearly indicating not only what had transpired but also who was involved.
The Act also requires institutions to report information to the Financial
Intelligence Centre such as the reporting of suspicious and unusual
transactions. This obligation does not apply only to accountable
institutions but to all businesses and also to all persons in charge of or
employed by a business.
The Act further provides for two other reporting provisions. The first is
the reporting of conveyance of cash by any person who either leaves or
enters the Republic. This obligation is placed on all accountable
institutions within the ambit the Act.
The amounts that have to be reported will be an amount in excess of a
prescribed limit. However these reporting provisions have not yet been
promulgated and will be enacted during the course of this year.
The measures, outlined above, provide for the transparency of funds and
were therefore not specifically intended to prohibit laundered money from
entering South Africa.