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Agencies pledge to strengthen collaboration ahead of critical FATF review

Agencies pledge to strengthen collaboration ahead of critical FATF review

11 August 2022- South African institutions at the heart of fighting corruption, including state capture, pledged their commitment to strengthen their joint efforts and enhance collaboration to ensure those who abused state resources are brought to book.

SARS Commissioner Edward Kieswetter, National Director of Public Prosecutions Shamila Batohi and National Head of the DPCI Godfrey Lebeya, were among the heads at the opening of a three-day workshop on inter-agency collaboration held in Pretoria.

The workshop in July was a historic opportunity for the law enforcement agencies, together with the National Treasury, the South African Revenue Service, the Financial Intelligence Centre, Financial Sector Conduct Authority and the South African Reserve Bank to collectively set the benchmark for inter-agency cooperation in combating illicit financial flows, money laundering, tax crimes and corruption. It was attended by 40 senior officials from National Treasury, SARS, SARB, the Financial Intelligence Centre, the Financial Sector Conduct Authority, the National Prosecuting Authority, the Hawks and the Special Investigating Unit.

At this critical juncture in South Africa’s democracy, the Heads of the participating entities concurred that building strong and resilient institutions that can withstand corruption and any future attempts at state capture is the cornerstone to restoring integrity and rebuilding public confidence.

Central to restoring public trust is to ensure that those found in the Zondo Commission reports to have been involved in the capture of the state and the destruction of state capacity be held accountable for the actions which have caused immeasurable damage to the country in the last decade.

The Heads of entities agreed that to do so successfully requires that:

  • The overall national financial intelligence system that enables inter-agency cooperation must be further developed and strengthened.
  • The agencies involved work more closely together on a joint action plan.
  • They must collaborate actively on sharing information within the remit of the law and improve the use of data.
  • Agencies share best practices and measures to ensure effective implementation and swift action.
  • Enablers of state capture and corruption, such as some banks, auditing firms, estate agents and lawyers, face the brunt of the law and are held accountable by their regulatory bodies.

Against the background of the joint direction provided by the Heads of entities, the OECD experts facilitated a critical self-assessment of the maturity of effective collaboration between law enforcement and regulatory agencies in South Africa using as a standard, a maturity model based on the ten global principles for fighting tax crimes developed by the OECD. The participants identified the problem areas and gaps and the measures needed to remedy these. The workshop also looked at which international cooperation mechanisms are available and being effectively utilised in combating tax crimes, illicit financial flows, money laundering and terror financing.

The results of the self-assessment exercise revealed a positive emerging strategic shift towards embedding the national financial intelligence system. The OECD applauded the shift. The OECD supported the collaborative effort of parties to continue to strengthen the overall strategic context and system by strengthening information gateways between and amongst agencies in pursuit of lawful effective and efficient information exchanges and driving operational collaboration. The OECD flagged the Fusion Centre as an emerging best practice that could ideally be extended to combat money laundering and build further on the work of the South African Anti-Money Laundering Integrated Taskforce (SAMLIT) which is private-public partnership aimed at combating financial crimes and led by the FIC and comprising the relevant law enforcement, regulatory entities, and the banks.

The OECD also encouraged parties to pilot and test the inter-agency proposals on addressing unexplained wealth.

Overall, the results show that South Africa has an established and functioning system, including the establishment of a specialised interagency working group focusing on illicit financial flows but more remains to be done to combat tax crimes, illicit financial flows, money laundering and terror financing. That includes efforts to improve data analysis and coordination, harmonising laws and practice to cut back on red tape to promote the timeous exchange of accurate and reliable information, embedding the ongoing measurement of the maturity of inter-agency collaboration and inter-agency trust and reviewing South Africa’s bilateral and multilateral treaties for fitness of purpose.

The Heads of entities endorsed the outcomes of the workshop and the implementation of recommendations as a further step towards reinvigorating South Africa’s collective response to FATF in January 2023. The important issue now is a strong focus on execution and the achievement of measurable results.

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