South Africa: Money Laundering Regulation — The Way Ahead
| Pages | 100-103 |
| Date | 01 January 1997 |
| Published date | 01 January 1997 |
| DOI | https://doi.org/10.1108/eb027126 |
| Author | Franso van Zyl |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control 1/1
South Africa: Money Laundering Regulation — The
Way Ahead
Franso van Zyl
Money laundering is a problem not only in the
world's major financial centres. Any country inte-
grated into the international financial system is at
risk. Increased efforts by authorities in the major
offshore financial centres to combat money laun-
dering provide an incentive to launderers to shift
their activities to emerging countries. The sophisti-
cated South African financial system as well as
technological progress by financial institutions will
undoubtedly further facilitate economic criminal
activities.
The current phasing out of exchange controls,
allowing the South African economy to become
more integrated into the international financial
system, makes South Africa an increasingly visible
target as an emerging country for money laun-
derers. With the relaxing of trade barriers and the
development of a more open economy, laundered
money can enter the financial system in the guise
of assisting the South African economy. The
unwitting acceptance of such 'dirty funds' can
cause great problems in the medium to longer
term, as the funds frequently depart as swiftly as
they arrive.
CURRENT SITUATION
The South African law has until recently only
made provision for the forfeiting of the proceeds
of
a
contravention of the Foreign Exchange Regu-
lations and of money or assets linked to drug
traf-
ficking by virtue of the Drugs and Drug
Trafficking Act, 140 of 1992. Apart from these
provisions, the South African courts are not
empowered to punish instances of money launder-
ing or to confiscate the proceeds of an offender's
criminal activities. In order to combat money laun-
dering in the present circumstances, enforcement
authorities are constrained to rely on individual
fraudulent transactions, which is wholly inade-
quate because the separate components of a
money-laundering scheme arc usually designed to
appear totally innocent when seen in isolation.
The South African Law Commission has
investigated and made recommendations about the
attachment of the proceeds of crime, the freezing
of bank accounts, mutual co-operation in criminal
matters, extradition, and money laundering and
related matters.
THE WAY AHEAD
The South African Law Commission has investi-
gated and made recommendations about the
attachment of the proceeds of crime, the freezing
of bank accounts, mutual cooperation in criminal
matters, extradition, and money laundering and
related matters.
Project 98: International cooperation in
criminal prosecutions (working paper
56)
Money laundering is an international problem,
often carried out by international crime syndicates.
Page 100
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