An International Monetary Fund (IMF) report entitled “Combating Money Laundering and Terrorist Financing”, released on Monday, revealed that South Africa is characterized by a high rate of financial crimes, more than half of which fall into categories that generate proceeds.
The report noted that the main financial crimes identified are related to tax offenses, fraud, corruption, drug trafficking, and environmental crimes.
The IMF added that cross-border money flows are raising fears about the financing of global terrorism.
Similarly, the international financial institution warned that South Africa is exposed to terrorist financing risks associated with the financing of foreign terrorism, foreign terrorist fighters, and potential domestic terrorism.
The report highlighted that the widespread use of cash and cash equivalents in the country presents a high risk of money laundering and terrorist financing.
In this regard, South Africa was recently placed on the Financial Action Task Force’s (FATF) ‘grey list’, which means that it has shortcomings in the fight against illicit financial flows.