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Calling for Rigorous Anti-Money Laundering Action as South Africa Aims to Exit Grey Listing



MEDIA STATEMENT


Johannesburg, Friday, 29 October 2024 – Public Interest SA has expressed grave concern following revelations published by AmaBhungane on widespread financial misconduct involving shadow banks and phantom gold trades. The report highlights how fictitious transactions in the gold and tobacco sectors, amounting to billions, appear to have facilitated massive tax evasion and money laundering schemes. This revelation is alarming, given South Africa’s ongoing efforts to exit the Financial Action Task Force (FATF) grey list, which requires stringent enforcement of anti-money laundering (AML) standards and combating illicit financial flows.


The report by AmaBhungane, titled The #Laundry: Shadow Banks, Part One – Phantom Gold, details how a network of entities, including Asset Movement Financial Services (AMFS) and the Dubai-based Aulion Global Trading, allegedly processed billions of rands in circular transactions under the pretext of gold trading. These transactions, many of which involved non-existent gold, suggest systemic abuse of South Africa’s financial and regulatory institutions. Disturbingly, the transactions are alleged to have included significant VAT fraud, exploiting the tax system to channel funds overseas.


In response, Public Interest SA urges the South African Reserve Bank (SARB) and the South African Revenue Service (SARS) to take immediate action. Specifically, SARB must intensify scrutiny of entities involved in large-scale currency outflows, while SARS should accelerate investigations into tax abuses by firms engaged in suspicious transactions, particularly those manipulating VAT returns through fictitious trades. These steps are essential if South Africa is to regain global confidence in its regulatory mechanisms.


Public Interest SA recognises the critical role of investigative journalism in uncovering corruption and commends AmaBhungane’s efforts to expose financial misconduct within the gold and tobacco industries. These findings underscore the urgency of fortifying South Africa’s financial regulatory landscape to curb the pervasive effects of illicit finance on the economy.


“South Africa’s grey listing presents both a challenge and an opportunity for reform. This report is a call to action for regulatory authorities to dismantle the infrastructures enabling large-scale money laundering and fraud,” stated Tebogo Khaas, chairperson of Public Interest SA. “We urge a decisive response that will not only secure South Africa’s removal from the grey list but also restore faith in our commitment to financial integrity and accountability.”


Public Interest SA reaffirms its commitment to fostering a transparent, accountable South Africa. In line with these values, we call on all relevant stakeholders to work collectively in securing a stronger, more resilient financial regulatory system.


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Public Interest SA

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