The Treasury has announced proposed amendments that require international cash transactions exceeding R25,000 to be reported to the Financial Intelligence Centre.
The proposed amendments to the Financial Centre Intelligence Act (Fica) would bring section 30 into operation as the government bolsters its protocols against money-laundering. The centre at present receives reports on cross-border electronic funds transfers, large cash transactions and unusual or suspicious transactions.
The revisions also boost the centre’s ability to detect suspicious cash transactions and to report them to investigating and prosecuting authorities.
This information is vital for SA’s removal from the Financial Action Task Force’s greylist, which has resulted in enhanced due diligence for SA, as well as a higher cost of business and delayed transactions for financial institutions. The task force sets global standards for the combating of money-laundering and terrorism financing.
By October 2023, the task force had formally re-evaluated 15 of the 20 deficiencies as no longer existing. SA still needs to address five outstanding technical deficiencies.
The National Treasury’s proposals were gazetted on April 8 for public comment by April 19.
‘Mechanisms’
“Due to the potential money-laundering and terrorist financing vulnerabilities posed by cross-border movements of cash or bearer negotiable instruments, it is prudent that countries should have mechanisms in place to trace such transfers,” the Treasury said in an explanatory note to the Government Gazette notice.
Section 30 of Fica “also empowers the minister to prescribe the information that must be included in a report on the conveyance of cash or bearer negotiable instruments. This information must be sufficient to provide the [Financial Intelligence Centre] with the necessary transparency and traceability information concerning the cross-border movements of cash and bearer negotiable instruments,” the Treasury said in a statement.
“This includes information about all the parties that are associated with the conveyance of the cash or bearer negotiable instruments, dates, currencies, origin and destination, and details of how the cash or bearer negotiable instruments were obtained and the intended purpose for which the cash or bearer negotiable instruments are conveyed into or out of the republic,” the Treasury said in an explanatory memo.
Failure to declare the transaction may result in criminal conviction and imprisonment for up to 15 years or a fine of up to R100m. The finance minister “intends to authorise customs officers to receive reports,” said the Treasury.
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