Analysts call for tight measures on financial system to stop money laundering

Al-Jazeera has showed the involvement of officials at three South African banks in money laundering activities. Picture: KarelienKriel/Pixabay

Al-Jazeera has showed the involvement of officials at three South African banks in money laundering activities. Picture: KarelienKriel/Pixabay

Published Mar 31, 2023


Cape Town - The gold mafia scandal has dragged in South African banks, with questions raised about the financial system when millions of dollars were laundered through the system, with the help of officials.

Analysts have warned that despite the fact that South Africa has a strong financial system, it has its own weaknesses and the authorities must work hard to improve on it.

Independent economist Professor Bonke Dumisa said the authorities have been trying to jack up the financial system, but there were areas that need to be improved.

Professor Bheki Mngomezulu of the Nelson Mandela University also said weaknesses in the system were open to abuse by rogue officials who collude with those who launder money for nefarious purposes.

International news network Al Jazeera has over the last few weeks been exposing the involvement of high ranking officials in Zimbabwe in gold smuggling.

Uebert Angel, who is President Emmerson Mnangagwa’s diplomat, has been caught on camera where he was talking about the alleged gold smuggling operations.

In the latest episode, the channel showed the involvement of officials at three South African banks in money laundering activities.

The latest episode on the banks comes after the Competition Tribunal announced a probe into their alleged involvement in the manipulation of the rand.

These were international and local banks that will face an investigation by the Competition Tribunal.

But Mngomezulu said while the country’s financial system may be strong, it may be manipulated by officials with ill-intentions.

The officials will bypass the system for their own corrupt dealings, he said.

“The projection of a country as having a strong financial system is to boost investor confidence. Even if you have a strong financial system, there are officials who can bypass the system,” said Mngomezulu.

In Africa, the financial system was not strong enough and there were cases of even leaders who have offshore accounts.

Officials with diplomatic passports can abuse it for their own illegal dealings, he said.

Dumisa said the South African Reserve Bank (SARB) and some of the banks have been trying to clamp down on money laundering in the financial systems.

But there will be people in the system who will manipulate it, he said.

There was a bank that was shut down by the SARB recently because of flouting currency regulations.

“By that you must read there is some illicit money coming in and out. You have rogue people in the system who manipulate it. The inclusive term of flouting currency regulations touches on moving illegal currency in the country. One of the things raised in grey listing South Africa was aiding, abetting and financing terrorist organisations,” said Dumisa.

President Cyril Ramaphosa told Parliament on Thursday that they are working on measures to get the country out of grey listing in six months after that report from the Financial Action Task Force (FATF).

He said this was a very comprehensive process and it involves various institutions of the state.

“Once we started this process, we did the evaluation together with FATF and we realised that there were gaps. Hence we moved with speed to come to Parliament to have these Acts or amendments to be effected. Now those others that we still need to do, moving with speed and it involves various government entities. We have made a great deal of progress because of those that are left are only eight and we are working on them,” said Ramaphosa.

He added that National Treasury is leading this process. The Presidency was also involved and they will rope in other agencies in the Fusion Centre.

“We will be able to give line of sight to our people, as it affects many of our people to detail precisely measures that we are taking and the various steps. Our intention is to get out of the grey listing so that everyone can know that we have addressed all these issues that have to do with money laundering, as well as financing of terrorism because we do treat what FATF has put forward to us with a great deal of seriousness because we are a signatory of these international bodies. We want to comply, we want to achieve what they have said to us,” said Ramaphosa.

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