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Business Insider
02-07-2025
- Business
- Business Insider
Africa loses $88.6 billion each year to illegal money transfers
Africa is losing an estimated US$88.6 billion annually to illicit financial flows, according to a recent report by Ghana's Financial Intelligence Centre (FIC). Africa loses an estimated $88.6 billion annually to illicit financial flows, impacting economic development. Ghana achieved 42 convictions for money laundering-related offences in 2023, reflecting progress in combating these issues. Efforts include enhanced legal cooperation and institutional strengthening to address financial crimes across borders effectively. These losses are significantly undermining foreign direct investment (FDI), development assistance, and national efforts to drive economic transformation across the continent. The illicit outflows, driven by capital flight, tax evasion, money laundering, and proceeds of crimes such as bribery, corruption, and illegal mining, continue to rob African countries of essential resources required for infrastructure, healthcare, education, and sustainable development. Ghana records 42 money laundering convictions in 2023 Ghana's FIC revealed that in 2023, the country secured 42 convictions for money laundering-related offences. Fraud was the most common offence, accounting for 22 convictions, followed by forgery (17) and drug trafficking (3). FIC calls for National support to tackle financial crime At a sensitisation forum held in Tamale in the Northern Region, FIC representative Madam Yvette Anthea Owusu addressed members of the media and civil society, highlighting the damaging impact of illicit financial flows on national development. 'These acts make it difficult for countries to access the funds required to execute development projects for economic growth,' she noted. The forum, themed 'Building Political Will and Public Support for Asset Recovery in Ghana', was organised by the Ghana Anti-Corruption Coalition (GACC) with support from the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA). The initiative, spanning three months and covering five regions, aims to raise awareness of asset recovery processes, legal frameworks, and institutional roles in fighting corruption. Madam Owusu acknowledged Ghana's gradual progress in asset recovery, attributing gains to stronger cooperation between key institutions such as the FIC, revenue and security agencies, and international counterparts. 'Ghana is gradually making progress in the asset recovery regime despite existing challenges, owing to stringent measures put in place to curb money laundering,' she said. Referencing Article 13 of the United Nations Convention Against Corruption (UNCAC), she underscored the role of civil society and the media in combating corruption. The article calls for public participation and the inclusion of non-governmental organisations in anti-corruption measures. She also highlighted Ghana's ongoing mutual legal assistance with other jurisdictions to prosecute cross-border financial crimes. Call for stronger media involvement and government support Madam Owusu encouraged journalists to serve as watchdogs in collaboration with civil society organisations (CSOs) to educate the public and help trace illicit assets. 'Investigative journalism plays a critical role in the fight against corruption,' she stressed. Benjamin Ndego, representing the Economic and Organised Crime Office (EOCO), emphasised the importance of public trust and transparency in asset recovery efforts. He said EOCO is increasing the use of legal tools, including plea bargaining, to improve outcomes and reduce costs. He also appealed for more funding, legal resources, and public awareness support from the government, CSOs, and development partners. Media and CSOs key to building asset recovery awareness Speaking on the rationale behind the outreach programme, Solomon Nyankah of the GACC said the initiative was necessary due to Ghana's ongoing losses from illicit financial activities. 'We initiated this project because we recognised a need to educate the public, especially media and CSOs, about the asset recovery regime and the importance of their roles in informing the wider population,' he explained.
IOL News
23-06-2025
- Business
- IOL News
Prudential Authority imposes hefty sanctions on three major banks for FIC Act breaches
The Prudential Authority (PA) is mandated to supervise and enforce compliance by accountable institutions with the provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act) and with any order, determination or directive made in terms thereof. Image: Supplied The Prudential Authority (PA) has unleashed a wave of administrative sanctions on three prominent international banks operating within South Africa following notable breaches of the Financial Intelligence Centre (FIC) Act. This decisive move underscores the authority's commitment to enforcing compliance within the financial sector, as mandated by the South African Reserve Bank (Sarb). In a recent statement, the PA said it imposed administrative sanctions on Citibank N.A. South Africa Branch (Citibank) as a result of its non-compliance with certain provisions of the FIC followed an inspection conducted on Citibank in 2022 in terms of section 45B of the FIC Act. "The administrative sanctions imposed on Citibank consist of a caution not to repeat the conduct which led to the non-compliance as well as a financial penalty totalling R6 million, which is fully and conditionally suspended for a period of 12 months as from 5 March 2025," said the PA. "These administrative sanctions stem from Citibank's failure to comply with section 42 of the FIC Act, in that it failed to implement its Risk Management and Compliance Programme in relation to the assessed advance payment transactions." The PA said Citibank cooperated and has undertaken the necessary remedial action to address the identified compliance deficiencies and control weaknesses. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Building on this trend of accountability, HBZ Bank has also found itself in the hot seat, facing a total penalty of R9m due to its own lapses uncovered during a 2022 inspection. The sanctions against HBZ include three cautions, two reprimands, and a financial penalty — R1.5m of which is conditionally suspended for 24 months, commencing on 5 March 2025. Specifically, HBZ was found to have neglected its customer due diligence (CDD) obligations under the FIC Act, failing to perform adequate checks on 18 medium-risk and 5 high-risk client files. The regulator also imposed a caution not to repeat the conduct which led to the non-compliance as well as a reprimand after HBZ failed to comply with sections 22 and 23 of the FIC Act, in that it failed to keep records in relation to one of its high-risk trade finance active and terminated client relationships. Furthermore, the bank received additional reprimands related to insufficient record-keeping practices concerning high-risk client relationships and the absence of a documented rationale for the inherent risk rating of trade finance transactions. The third institution caught in this compliance crackdown is the Bank of Taiwan, South Africa Branch (BOTSA). The PA's inspections revealed deficiencies in the bank's management of its RMCP Introduction Manual. The PA said BOTSA failed to secure necessary approvals from its Executive Committee prior to implementing material changes to this vital document. Moreover, the bank did not effectively manage the annual reviews of its RMCP and neglected required due diligence measures on assessed correspondent banking relationships, as stated in its governance policy. It also implemented its RMCP and undertake the requisite due diligence measures in relation to two of its assessed correspondent banking relationships in respect of Vostro accounts; and provide evidence that its Screening of Customers and Transactions Manual had been reviewed and approved after 2020. "The PA confirms that BOTSA cooperated with the PA and that the bank has undertaken thenecessary remedial action to address the identified compliance deficiencies and control weaknesses," said the PA. BUSINESS REPORT
The Citizen
16-05-2025
- Business
- The Citizen
FIC takes a bigger stick to lawyers and estate agents over grey list
These are the two sectors holding up SA's exit from the grey list. The good news is that SA has addressed 20 of the 22 issues that got it onto the list. Foreigners used expensive property to wash their dirty money, but some estate agents 'are now so wrapped up in red tape' that criminals may slip through the net. Picture: AdobeStock The Financial Intelligence Centre (FIC) is carrying out hundreds of inspections and issuing sanctions against estate agents and law offices over their failure to submit risk and compliance reports. SA was placed on the Financial Action Task Force (FATF) grey list in early 2023 for lapses in taking the necessary action to combat money laundering and terrorist financing, with estate agents and legal practitioners identified as two of the higher-risk categories. There is a fear that lawyer and estate agent trust accounts could be used to launder criminal proceeds or finance terrorism. There has been an improvement in compliance rates to around 70% from the 52% for legal practitioners and 42% for estate agents announced in February 2024, but this is still not where it needs to be to remove SA from the grey list. In response to queries from Moneyweb, the FIC says it conducted 165 inspections on estate agents and 242 on legal practitioners over the 2025 financial year. This resulted in sanctions being issued against 87 estate agents and 83 legal practitioners. ALSO READ: Financial Intelligence Centre: Lawyers and estate agents keeping SA on grey list 'South Africa has largely addressed 20 of the 22 action items outlined by the Financial Action Task Force in its action plan for the country. The country's efforts continue to drive South Africa's exit from the grey list,' says the FIC in an emailed response. Other high-risk sectors include high value goods dealers, such as those dealing in precious stones, precious metals and Krugerrands, and trust service providers (such as accountants). These are 'designated non-financial businesses and professions' or DNFBPs that are not traditional financial institutions but are considered to be at risk of being used for money laundering and terrorist financing. These bodies are required to submit regular risk and compliance reports to the FIC to help it monitor and control money laundering and terrorism financing. ALSO READ: Prudential authority fines Absa R10 million for FICA non-compliance SA inching its way off the list In January, it was announced that SA had largely complied with 20 of the 22 issues that got it placed on the grey list in 2023 and was expected to be fully compliant with the FATF requirements by October 2025. National Treasury undertook to ensure that anti-money laundering and counter-terrorism financing supervisors implement follow-up remedial actions 'and that effective, proportionate and dissuasive sanctions are being applied'. The FATF found SA's laws against terrorism financing and money laundering were largely sufficient, but their enforcement was weak. In February this year, the South Gauteng High Court issued a freezing order against two individuals and two entities based on reasonable grounds of suspicion that they had been involved in committing an act of terrorism under the Protection of Constitutional Democracy Against Terrorist and Related Activities Act. Christopher Malan, executive manager for compliance and prevention at the FIC, commented in April that SA had not fully complied with its FATF commitments due to non-financial businesses and practitioners' understanding of their own risk and compliance situation. Estate agents hit back last year, saying that while they supported efforts to improve compliance rates, the FIC appeared to be operating on incorrect data, with many estate agents ceasing to operate without advising the FIC. ALSO READ: FSCA fines Ninety One Fund Managers R3 million for Fica non-compliance The grey list makes it more difficult for SA companies to access overseas capital and imposes higher due diligence standards when dealing with foreign businesses and banks. Research and advisory group Krutham (formerly Intellidex) estimated that this could cost the economy 1% of GDP a year in an optimistic scenario, and 2-3% in a more pessimistic one. Some of the criticism being directed at lawyers and estate agents could be directed at banks, which enabled the flow of billions of rands during state capture. Some estate agents argue that they are now so wrapped up in red tape that criminals are able to slip through the net. Research by Open Secrets revealed a pattern of money laundering by politically connected individuals from Mozambique, the Democratic Republic of Congo and Equatorial Guinea where expensive properties, often bought with public funds, were being purchased in affluent suburbs in Cape Town and Johannesburg. This article was republished from Moneyweb. Read the original here.
