Stand-out greylisting warnings and predictions at financial crime conference

During the Financial Crime Conference held in Bryanston this week, one of the key speakers, Adv. Pieter Smit, Acting Director of the FIC, shared that their upcoming Annual Report will show over 7 million FICA reports submitted by businesses, including more than 450,000 reporting suspicious transactions.

Here are some stand-out quotes from the nCino KYC Fighting Financial Crime Conference. 

Hawken McEwan, Head of Financial Crime Compliance at nCino KYC: “I'm confident we'll be removed from the FATF’s greylist by October, but that doesn’t mean the crime that got us on it has disappeared. The equivalent of 2% - 5% of SA’s GDP is laundered annually through the country’s financial system. That doesn’t disappear easily. We have now completed all 22 action items required by the FATF to be removed from the greylist, yes, but the fight is ongoing, especially as tech advances. I can guarantee you that criminals are using AI now, and way before many of us are even ready ourselves.” 

Michael Marchant, Head Investigator at Open Secrets: “There was a period after the Zondo Commission concluded where it was unclear whether [SA] would actually learn from [State Capture]. But then, as traumatic as it was when we were greylisted, it forced the necessary changes and learnings from the State Capture years. Perhaps it was a bit of a blessing in disguise.” 

Chad Thomas, CEO of IRS Forensic Investigations: “We had State Capture, but our state was not captured. We are not a failed state; we acted. The FIC is absolutely central to our progress. But there is a serious shortage of financial-flow analysis skills in SA that is holding our evidence-work [in money laundering investigations] back.” 

Adv. Pieter Smit, acting director of the FIC: “It’s easy to fuel the perception that the FIC is 'coming after small businesses', because we have to apply these comprehensive rules in the country. We do this, though, because even with large banks who spend tens of millions of Rands on compliance systems, all it takes is for one lawyer to hide or manipulate beneficial ownership details to make it possible to launder billions. We are only as strong as the weakest link. We enforce compliance for all, equally, because one failure exposes so many others. We hold everyone to the same standard for that reason.” 

Felicity Mfino, Head of Financial Crime Compliance at AlexForbes: “Money launderers and terrorism financiers are very intelligent. They are often more intelligent than some of us. The know the law inside and out.” 

Adv. Nomvula Mokhatla, Founder and President, Sky Lenong Holdings and former Deputy National Director of Public Prosecutions: “What is money laundering? It is the act of concealing ill-gotten gains by packaging them in legal wrappings. Those legal wrappings are you! You, the real estate agents, lawyers, high-value goods dealers at this conference.” 

Chad Thomas, CEO of IRS Forensic Investigations: “I don’t know if you should call it political ignorance, -interference or -manipulation, but the lack of budget for the FIC is concerning. In 2023, for example, the SAPS budget of around R100 billion allocated 3.5% to security/protection services – basically for blue light brigades, minister's security, etc. At the same time, IPID, arguably the most important law enforcement agency in SA, got less than 0.5%, and the FIC got even less than that small amount. How do we allow state security and protection services to get this amount of budget while not contributing to society or change? Our priorities need to be looked at. We’re shooting ourselves in the foot.”