The US is considering expanding its support to SA to include financial aid to strengthen the capacity of the country’s enforcement agencies such as the National Prosecuting Authority (NPA) and the financial intelligence centre to combat money laundering and terrorist financing in SA.
This follows recent collaboration between the two countries in intelligence gathering and counter-terrorism measures that saw the US treasury sanction four Islamic State of Iraq and Syria-linked (ISIS) and Isis-Mozambique (Isis-M) individuals identified by the US as belonging to terrorist-financing networks based in SA.
The US government sees both groups as terrorist organisations central in financing and facilitating terrorist activities in the continent from SA, says the US treasury.
“Sanctions are a very powerful tool to prevent individuals from having access to their ill-gotten gains, in this case disrupt the financial network that existed and supporting ISIS,” undersecretary of the US treasury for terrorism and financial intelligence Brian Nelson, told Business Day.
“It’s not an SA issue. These networks operate all over the world. Where we can be effective and disrupting them is by helping the financial intelligence centres ... to deter, disrupt and destroy those networks.”
Nelson is on a five-day visit to countries in the Sadc region, including Angola and the Democratic Republic of Congo, to discuss anticorruption efforts, countering the financing of terrorism and the National Treasury’s recent sanctions actions in Africa. On Wednesday, Nelson met Treasury director-general Dondo Mogajane.
Wednesday’s discussions with SA and collaborative efforts between the two countries regarding combating money laundering and terrorism financing presented a “real opportunity” for the US treasury to offer further support to SA, said Nelson.
Mogajane said the R1bn allocated to the NPA over the next three years by the Treasury will be augmented by funds from private donors to increase the prosecuting authorities’ capacity to investigate financial and other crimes.
“What we have currently is that the cases are there, but the ability to interact with those big flies and complex issues is not there so we have to buy expertise into the NPA,” said Mogajane.
Funds from private donors will be placed by the Treasury’s Reconstruction & Development Programme fund which is used by the Treasury to implement the country’s developmental goals, he said.
The US treasury recently flagged SA as one of the African countries which ISIS has used to expand its footprint through large-scale operations and funding mechanisms including theft, extortion of local populations, kidnapping for ransom as well as financial support from the ISIS hierarchy.
SA was also flagged by the Financial Action Task Force as lacking adequate measure to combat financial crimes such as money laundering and terrorism financing, leading to the international body giving SA an October 2022 deadline to resolve the issue. If the deadline is not met, SA faces grey listing, which could negatively affect its ability to trade with other countries .
Mogajane told Business Day that the Treasury is on track to present draft legislation to strengthen SA’s ability to combat financial crimes by April.
“We have to perform a miracle to avoid being on the grey list so we are on track in ensuring that the basics are done,” he said
“We have to put a team of people that would have to actually co-ordinate the whole of the efforts of SA ... because currently each of the agencies work on their own and all hope that things will happen.”
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