About R3,39bn in criminal proceeds recovered - R659m related to Covid graft
- FIC says close to R3,39 billion from the proceeds of crime has been recovered.
- More than R613,2 million in suspected criminal funds has been frozen.
- About R659 million of the recovered amount relates to Covid-19 relief corruption.
- A drop in the estate agents and car dealers registrations shows the Covid-19 toll on the economy.
- For more stories go to www.BusinessInsider.co.za.
The Financial Intelligence Centre (FIC) says it has played a leading role in recovering close to R3,39 billion from the proceeds of crime in the 2020/21 period.
Of this amount, close to 20% – about R659 million – relates to criminal activity involving Covid-19 relief efforts.
The efforts to recover the money followed a commitment by President Cyril Ramaphosa to hold those who have stolen money meant to combat the pandemic to account.
According to the FIC’s 2020/21 latest annual report, a key driver in tracking down money that should have gone to Covid-19 relief was the formation of the Fusion Centre, a collaboration of law enforcement authorities and investigative bodies in the justice, crime prevention and security cluster.
The Fusion Centre, which was set up in December 2019, was established with the aim of having a multi-agency operational hub to follow up on money laundering issues and other financial crimes.
In its relatively short existence, the Fusion Centre has had some notable successes, like the recovery of hundreds of millions in unpaid taxes and the opening of over 200 cases.
Fusion Centre achievements:
- Assisted in 276 cases related to Covid-19 relief efforts, involving about 740 individuals and 705 companies.
- Bringing to book 33 accused charged in 18 financial crime cases.
- The FIC blocked R146 million in 81 bank accounts.
- The Asset Forfeiture Unit preserved R123 million.
- Through the Special Investigating Unit (SIU), cases to the value of R289 million have been enrolled before the SIU Special Tribunal, with R124 million recovered to date.
- Through the South African Revenue Service, R247 million in unpaid taxes have been recovered.
The total money recovered and frozen in the 2020/21 period was substantially larger than that in the pervious period. Criminal proceedings had risen from R2,97 billion to R3,39 billion and the amount frozen was up from R70 million to R613,2 million.
Though the FIC was able to recover billions of rand, what’s notable is that it was able to do this on a reduced budget. The pressure on the fiscus resulting from the Covid-19 crisis saw the government reduce the amount budgeted for the agency reduced by about R4 million to R290,2 million when compared to the previous financial year's budget.
It’s important to note that the agency, which puts together and gathers reports on possible criminal transactions going through the country’s financial system, has no powers to drive criminal investigations or make arrests.
Its mandate is to compiles its own reports, as well as require businesses to report suspect transactions. Of the 5.2 million reports submitted by financial institutions as well as those compiled by the FIC, 394 709 were on “suspicious and unusual transactions” according its 2020/21 latest annual report.
Aside from the cut in its budget, the difficult times the country is going through can also be seen in the number of some institutions that are no longer registered with the FIC.
Though the overall number of registered institutions had risen by 79 to 44 499, the agency noted the number of estate agents had fallen 296 to 10 498 and vehicle dealers dropped 240 to 3 788.
The FIC noted: “Institutions in these sectors often include smaller and family businesses. The decrease in registrations in some of these sectors can possibly be attributed to the decline in economic activities during the reporting period as a result of, inter alia, the Covid-19 pandemic.”
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