Money laundering is disguising the origins of illegally got money by making it appear to have come from a legitimate source. Money launderers may hide their illicit wealth in several ways, including through:
– Shell companies, which are businesses that exist on paper only and have no physical assets or operations;
– Trade-based money laundering, which is buying goods with dirty money and selling them to generate clean cash;
– Committing fraud against financial institutions;
– Investing in real estate or other tangible assets.
In South Africa, there are many methods that can launder money. The most common method is through the use of offshore bank accounts. This allows a person who has committed a crime to move their funds into an account where they will not be detected by law enforcement agencies.
How does the South African government prevent money laundering?
The South African government has implemented various measures to prevent money laundering.
The first measure is that the banks are required to report any suspicious transactions to the Financial Intelligence Centre.
The second measure is that the Financial Intelligence Centre analyses all suspicious transactions and provides warnings to the relevant authorities if they find anything suspicious.
Lastly, the South African Reserve Bank has tightened regulations on cash transactions and withdrawals, which makes it more difficult for individuals or organisations to launder money.
