Only 14% of financial intelligence cases investigated in 6 years

Cape Town – Only 733 of the more than 5 200 cases that the Financial Intelligence Centre (FIC) passed on to law enforcement agencies have been investigated in the past six years.

This amounts to about 14%. 

Finance Minister Malusi Gigaba conveyed these statistics in response to a Parliamentary question posed by David Maynier, Democratic Alliance (DA) spokesperson on finance.

Maynier asked Gigaba to give the number of cases the FIC referred to law enforcement agencies over the past six financial years.

According to Gigaba, at least 5 230 financial intelligence reports have been referred to bodies, such as the police, the tax authority, security services and regulators, since the 2011/12 financial year.

“Of the referrals, 733 were disseminated for investigation,” Gigaba added.

READ: Gigaba signs FIC Amendment Act 

The FIC serves as South Africa’s national financial intelligence unit tasked to give financial intelligence to law enforcement agencies. The body analyses trends and transactions of financial institutions and individuals to monitor the flow of money in the economy.

Suspicious transactions 

In October last year, former finance minister Pravin Gordhan filed court papers in which he revealed that 72 transactions involving the Gupta family were flagged as being suspicious. The transactions amounted to close to R7bn.

Gordhan turned to the courts for a declaratory order on whether he has the power to intervene in a matter in which Absa, FNB, Standard Bank and Nedbank banks severed business relations with the family.

READ: Oakbay: Cloud hangs over 72 'suspicious' transactions 

The FIC, by law, is privy to details on all bank transactions that raise concern over the purpose thereof, according to section 29 of the FIC Act. Suspicious and unusual transactions, as defined by the act, include transfers that may relate to the financing of terrorism, the evasion or attempted evasion of tax payments, or transfers that have "no apparent business or lawful purpose".

The 72 transactions, with amounts varying from R5 000 to R1.3bn, were concluded by the Guptas and a number of their companies over the past few years.

Proceeds of crime cases 

In a separate Parliamentary question, Maynier asked Gigaba to elaborate on the number of cases that the FIC referred specifically in relation to the Prevention and Combating of Corrupt Activities Act.

The piece of legislation allows for the prosecution of individuals and enterprises that are guilty of corrupt activities and transactions relating to among other things tenders and contracts.

Gigaba said 87 such cases were referred to authorities. The FIC however doesn’t know if any of the referrals have been investigated or resulted in a conviction. The Finance Minister pointed out that the FIC does not refer acts of criminality per se for investigation to law enforcement agencies.

READ: Guptas cash movements under the microscope - report 

“It refers packages of transactional and other information that present indicators of suspected criminality to be investigated by the competent authority.

“It is for these authorities to determine if the transactions are indeed proceeds of crime, or may be associated with an unlawful predicate offence.”