“Thank you, House Chairperson,
Whilst South Africa’s greylisting has been described as an ‘embarrassing fall from grace’, it was not unexpected. The judgement of greylisting refers to a global policy against money laundering and against terrorism financing [and nuclear weapons proliferation] and South Africa is clearly not measuring up to the standard.
The Financial Action Task Force (FATF) that disposed and bestows the judgement is not some arbitrary body but an intergovernmental organisation and global financial crime watchdog, of which South Africa is a member and willing participant, and it identifies deficiencies in South Africa’s legal framework, and through compliance, enhances the integrity of that country.
The creation of the Fusion Centre, which brings together bodies like the NPA, SIU, SARS, Hawks, Crime Intelligence, the State Security Agency and the FIC, is a step in the right direction as is to be welcomed.
However, as the FATF pointed out, far more needs to be done, and when one considers the recent revelation of funds that have gone to terrorism organisations, clearly, this is the case.
The ACDP also calls for an increased political will to carry out the Zondo Commission recommendations. As we know, the Commission revealed institutional looting but alarmingly, precious few prosecutions so far have taken place of those politically well-connected people implicated in the theft of billions of Rands, and in certain cases, money-laundering was involved as well.
The implications of greylisting range from higher interest rates and inflation, the weakening of the Rand (which was already factored in), reduced inbound foreign investment, less offshore investment and increased costs and delays due to greater compliance requirements for South African banks and transactions.
The IMF estimates that countries have, on average, experienced capital outflows equal to 7.6% of GDP after greylisting. This is clearly alarming and something South Africa cannot afford.
The FATF’s statement made it clear that South Africa was greylisted not so much because of a failure of legislation but a failure to adequately investigate and prosecute money laundering and terrorist financing.
The ACDP in government, will not fail to ensure that investigations and prosecutions of those involved in money laundering and terrorist financing takes place in a far more effective manner – something that the majority party seems unable to do, resulting in this greylisting.
I thank you.”
-ENDS-
