South Africa convened the first meeting on Friday of an advisory body aimed at halting money laundering in the country, which officials say may amount to between $5 billion and $8 billion a year.
”We don’t know (the exact amount) but in the absence of rules and regulations I’m pretty convinced that there is a large amount (of money being laundered),” Finance Minister Trevor Manuel told reporters in reply to a question.
Manuel spoke after addressing the newly-created Money Laundering Advisory Council, which will examine draft regulations aimed at halting money laundering in the country.
The new rules would prevent some of the blatant violations of sound practice happening at present, which included people being able to buy houses or open bank accounts with suitcases of cash, Manuel said.
Deals would be monitored by a 35-member Financial Intelligence Centre, which would deal with the day to day job of receiving data on suspicious transactions and feeding them through to law enforcement agencies
”We are obliged to ensure we play by the rules … to recognise that suspicious transactions are the spokes in the wheels of financial services which would make the entire system grind to a halt,” Manuel said.
But he noted that an in-depth investigation after last year’s September 11 attacks on the United States had not found any evidence that ”terrorist” groups were using South Africa to launder money.
Manuel added that he hoped the rules would be ready to present to parliament before the end of the year, and would take effect by the start of 2003. They do not require approval by parliament.
Thirty-five million rand had been budgeted for the Financial Intelligence Centre during the first year of its operation, said Murray Michell, an advisor to Manuel who will head the Centre.
He told reporters it was expected to receive about 750 reports during the first month, but this would ”escalate”.
An IMF study showed that out of an estimated
$3,5-trillion of money laundered worldwide each year, between $5 and $8-billion were probably channelled through ?outh Africa, he said. – Reuters