26 Nov 2015

Money laundering and terrorist financing are a global phenomenon with the potential to undermine the socio, economic and political stabilities of countries.

Addressing a full council meeting , the director of Financial Intelligence Agency, Mr Abraham Sethibe said councillors should be aware of money laundering and terrorist financing. 

Mr Sethibe said allowing money laundering and terrorist financing activities to proceed unchallenged was suicidal because it could damage financial institutions critical to economic growth.

He noted that it could encourage crime and corruption which could undermine private sector growth and distort the economy’s international trade and capital flows to the detriment of long term economic development.

Furthermore, Mr Sethibe stated that money laundering and terrorist financing stalls economic growth and negatively affects financial and political stability of a country.

He said that it was critical to make leaders aware of such pertinent issues of money laundering and terrorist financing so as to share and be in position to guide the general public.

“It is also critical that the general public is alert of such issues so as to avoid being taken advantage by perpetrators,” he added.  He also stated that the public has a statutory obligation to report any suspicion of money laundering or terrorist financing to the Financial Intelligence Agency (FIA).

He said that countries that fail to address the money laundering and terrorist financing concerns, face sanctions that include drastic blacklisting by the financial action task force. 

He added that could also result in reputational damage to the blacklisted countries.

Mr Sethibe stated that the negative reputation attributed to money laundering and terrorist financing reduces countries’ ability to attract foreign investment and legitimate international opportunities, which are contributory factors to economic development and financial stability.

He said the FIA would do everything to ensure that criminals are deprived from benefiting from the proceeds of their illegal activities. He said that the FIA would also ensure that there was compliance with the FIA Act and international best practice standards by all relevant stakeholders. Criminal activities that fall under money laundering include money from drugs, theft of vehicles, counterfeiting of products, robberies and other various forms of fraud, he said. 

Mr Sethibe also stated that three distinct but not mutually exclusive stages of money laundering covered placement which deals with cash deposits into financial system or exchange for value items in the market through banking institutions, non-bank financial institutions, retail outlets, stock exchange and vehicles.

The other stage was layering which deals with undertaking of complex financial transactions designed to mask the illegal origin of criminal proceeds. He said these were done using shelf companies, investment schemes or close corporations.

Additionally, Mr Sethibe said the fight against money laundering was a crucial part of international efforts to prevent and disrupt criminal activity of all types.

Furthermore, he added that financing of terrorism poses a significant threat throughout the world hence the need for multilateral efforts to starve terrorists of the funds they require to carry out attacks.

Mr Sethibe encouraged the public to help in the fight against money laundering and terrorist financing and report any suspicious financial transactions.

Commenting, Councillor for Ditladi, Ms Peggy Senthufe acknowledged the alert given by FIA, adding that they would share the information with their communities.

Councilor Isaac Pelaelo also alerted FIA about people who operate as foreign exchange dealers in the black market. 

He said some of those people also sell various types of drugs hence the need for authorities to constantly do spot checks to detect any improper and illegal activities that could be going on.  Ends