Parliament concerned about ineffectual fight against illicit financial flows
Large gaps in enforcement and co-ordination between different government agencies was a source of concern that the fight against illicit financial flows, base erosion and profit shifting was not effective.
This emerged during an engagement of three parliamentary committees — finance, trade and industry and mineral resources — with officials of the Treasury, the South African Revenue Service (SARS), the Financial Intelligence Centre (FIC), the Reserve Bank, the Department of Mineral Resources, the South African Police Service (SAPS) and the National Prosecuting Authority (NPA).
Finance committee chairman Yunus Carrim said in his introductory remarks that it seemed that the SAPS did not act on cases of suspicious transactions reported to it by the FIC. Even if the SAPS did act, it was not clear that the NPA had the capacity to follow up the cases.
"There is no obvious deterrent," Carrim said, noting that parliamentary committees would be playing a greater oversight role over these matters.
Treasury deputy director-general Ismail Momoniat also emphasised the need for more focus in dealing with financial crimes when they were identified. The key issue, he said, was how effective the government and its agencies were in implementing laws. There was also a need for greater co-ordination between regulators.
He questioned whether the relevant authorities were checking planes flying to Dubai with lots of money on board and expressed frustration that no action seemed to be taken on cases that were reported.
Momoniat said the Treasury had received reports that mining rehabilitation funds might have been raided and had reported the matter to SARS but was not sure what had happened about this.