CompliNEWS | Financial Service Intelligence Watch
FIC Annual Report highlights key role in asset recovery
The Financial Intelligence Centre (FIC) has played a critical role in recovering more than R98.5 million in criminal proceeds during the 2023/24 financial year. This achievement is part of the FIC’s broader efforts to combat money laundering (ML) and the financing of terrorism (TF), as outlined in its latest annual report, recently tabled in Parliament.
Acting Director of the FIC, Pieter Smit, emphasised that 2023/24 was a year marked by the urgent implementation of regulatory reforms, aimed at fulfilling the Financial Action Task Force (FATF) requirements to assist South Africa in exiting the grey list.
In February 2023, FATF placed South Africa under ‘increased monitoring’, following a mutual evaluation that identified eight key areas of deficiency in the country’s AML and CFT framework. The FIC worked closely with various government departments and agencies to address these issues and strengthen South Africa’s financial crime defences.
Key Asset Recovery and Financial Intelligence Milestones
- The FIC produced 3,924 financial intelligence reports that contributed directly to recovering R98.5 million in criminal proceeds.
- It blocked R295.8 million in suspected criminal proceeds across 208 bank accounts during the financial year.
- By 31 March 2024, a total of 51 020 accountable institutions were registered with the FIC, contributing approximately 7.4 million regulatory reports, including414 984 suspicious and unusual transaction reports.
Strengthening Financial Crime Defences
The report also highlighted the expansion of the FIC’s supervisory remit to include designated non-financial businesses and professions (DNFBPs), such as casinos, lawyers, accountants, estate agents, and dealers in precious metals and stones. This expansion, enabled by amendments to the FIC Act, is part of a broader effort to enhance oversight and mitigate financial crime risks in these sectors.
To improve risk-based supervision, the FIC introduced a risk and compliance analysis assessment tool, which included a self-assessment questionnaire known as the Risk and Compliance Return (RCR). The RCR enables institutions to assess their vulnerability to ML and TF abuse. Based on these assessments, the FIC conducted 111 inspections of institutions at higher risk of non-compliance.
Shared Forensic Capability
In 2023/24, the FIC launched the Shared Forensic Capability (SFC), which provides specialised forensic services to law enforcement agencies. Operating since May 2023, the SFC enrolled 18 matters and produced eight affidavits and forensic reports in its first year. This service strengthens the country’s ability to investigate and prosecute financial crime, particularly in complex cases involving money laundering and terrorist financing.
Compliance and Enforcement Efforts
The FIC conducted 558 inspections during the year, with 245 institutions found to be non-compliant. These institutions were required to implement remedial actions to align with their FIC Act obligations. To support compliance, the FIC hosted 48 awareness sessions, reaching over 30 000 attendees through webinars and roadshows, a significant increase from the previous year’s 16 801 participants.
The FIC also worked closely with stakeholders to address beneficial ownership transparency and other reforms to help South Africa meet FATF requirements. These reforms are part of the country’s strategy to exit the FATF grey list by February 2025.
Conclusion
The FIC’s work in the past year highlights its central role in combating financial crime and strengthening South Africa’s regulatory framework. With significant recoveries of criminal proceeds and enhanced oversight of both financial and non-financial sectors, the FIC continues to be a critical player in ensuring the integrity of the country’s financial system.