State capture reports lay bare extensive money laundering networks in SA

The final reports have recommended that banks' compliance with the FIC Act must be reviewed urgently.

FILE: A video screengrab of Ajay Gupta. Picture: Eyewitness News.

JOHANNESBURG - The state capture commission has found that widespread sophisticated money laundering networks are operating in the country.

It said in its final reports handed over to President Cyril Ramaphosa on Wednesday that it discovered this while tracing the flows of state capture proceeds, which it could not fully quantify due to the complex nature of the methods used to drain state coffers.

To deal with this challenge, the commission writes in its final report that a coordinated and cooperative approach to targeting money laundering is required from relevant enforcement agencies.

READ: Final state capture report in full

The detrimental impact of illicit financial flows on South Africa’s economy is well documented but not much is actively being done to deal with it.

In assessing the deeds of the Gupta criminal enterprise, the commission said one of the hallmarks of the money laundering networks that processed the proceeds of state capture crimes in the country was their flexibility.

It records how as soon as particular companies were exposed as laundry vehicles the network was able to bypass those companies and reroute funds through different entities.

The final report also states that the money laundering networks used by the Guptas and their cronies were complex, well established, and embedded in a pre-existing cycle of criminality and wrongdoing. They even have links with international money laundering networks with multibillion-rand turnovers.

The report recommends that anti-money laundering resources of the banks should be used in a much more proactive manner than is currently the case. It also says that the Financial Intelligence Centre should conduct an urgent review into the compliance of banks with the FIC Act concerning the proceeds of state capture laundered through accounts they hold.