FINANCE
Case Study
Repercussions of Non-Compliance in South Africa
FINANCE
Modern financial criminals employ a range of advanced methods to launder money and finance terrorism. These include utilising deepfakes, photo-editing documents to disguise their identities, and engaging in intricate layering techniques to disguise the origins of illicit funds.
Case Study
An example includes the saga of Mozambican Zingai Dhliwayo, who stole the identity of South African Bethal Ngobeni by replacing the photograph on his ID. Under his newly assumed identity the alleged illicit gold trader went on a shopping frenzy— splashing R4,2 million on six cars and two homes, hoarding the other R2,4m in his bank account.
Within just seven months Dhliwayo allegedly spent millions of rands he‘ earned’ through buying stolen gold-bearing materials from mineworkers in Carletonville and selling them at inflated prices on the black market. And potentially all of this could have been avoided through a proper check his( falsified) ID document.
Repercussions of Non-Compliance in South Africa
South African regulatory authorities have demonstrated a renewed commitment to enforcing compliance with anti-money laundering( AML) and counter-terrorist financing( CFT) legislation, and the Financial Intelligence Centre Act( FICA), in a bid to remove the country from the international Greylist.
This places great pressure not only on the government, but also on institutions on the ground- where failing to adhere to FICA compliance regulations will greet them with substantial penalties.
In November 2024, a law firm was sanctioned with a R7,7 million financial penalty for noncompliance with FICA. This case- just one of many such examples- clearly showcases the severe consequences legal practitioners can face when they neglect their AML obligations.
74 REI MAGAZINE APRIL 2025