As we all prepare for the death throes of 2020 in what has proved to be one of the most challenging of recent times, the Financial Action Task Force and Egmont Group recently published a report dealing with trade-based money laundering trends and developments aimed at challenges encountered by the public and private sectors.
The report contains case studies that highlight why criminals prefer to exploit trade transactions to move the proceeds of crime rather than goods, providing recommendations on how to help mitigate this risk. The report, as in previous guidance issued by the FATF and local regulators, stresses the importance of the use of internal and external information sources to identify and manage the financial crime risk around international trade. Once again, the importance of sharing data and resources between the private and public sectors come to the fore.
FCRMC has previously raised its voice in support of meaningful public-private partnerships that will address not only trade-based money laundering but all illegal activity, starting with areas such as fraud, corruption, and tax evasion, but also addressing the misuse of the very institutions that facilitate global trade for nefarious purposes, whether these institutions find themselves in the public or private sector. What is clear is that all need to play their role in dealing with this increasingly brazen menace to society.
Joining hands to address financial crime is an age-old adage that appears to have fallen on those with mostly selective hearing - something that we often accuse our family members of! Are we doing enough to actively enshrine the sharing of information between regulated (and non-regulated) institutions and those tasked with bringing persons involved in illegal activity to book? Our constitutional safeguards whilst extremely important, appear to trump the necessity of holding criminals to account.
Surely this is not what is intended by the global standards (couched as 'FATF recommendations') the purpose of which is to find ways to arrest - pardon the pun - methods used by unsavoury elements in our midst to hide their criminal activity, using legitimate businesses and delivery methods to do so - ouch!
Recent events in South Africa have shown authorities are actively seeking to address the past evils and intend holding purveyors of injustice, to account. Are we actively seeking ways to support the agencies in their endeavours or are we sitting back to see how their current and future activities evolve? Are we passengers or involved participants in pursuing a better society for us and our broods? I know where I want to throw my weight!
We need to change our mindset to actively find ways - within legal constraints - to support law enforcement and the prosecutorial authorities in their fight against illegal activity. Many of us are punch drunk on the plethora of laws and our initial response is to be on the defensive when approached by the authorities to provide support of their pursuance of criminals and wrongdoers.
We need to throw everything that we have at the criminals - laws, regulations, policies, procedure, people, - using technology and data techniques and find ways to back criminal justice system stakeholders in pursuing successful prosecutions. To this end, the FATF report, together with the included public private partnership successes and methodologies should serve as a benchmark for South Africa's public and private sectors to engage and make a difference. Methinks the time is now, whilst the momentum is underway!
FCRMC is committed to ongoing engagement with public and private sector role players and looks forward to assisting in the pursuit of excellence in their quest to counteract financial crime.
We wish all our clients and business partners a fantastic break over the holiday period and look forward to welcoming engagement with you in 2021!
The FCRMC team.