00:00:00
Speaker 1: They are concerns that the latest revelations, arrests and suspensions in our police related to the Madlanga Commission of Inquiry, of course, may affect our gray listing status here. Remember so that was taken off the gray list. I think it was October last year, with the country managing to meet all these security requirements. However, the latest events surrounding the Madlagga Commission of Inquiry have seen some of the police's top leadership either suspended or fired. If you have a look at Fani Massamola, you have a look at some of the other generals as well. There's a major problem for joining us is Stephen Powell, head of NS's forensics practice. Stephen I good evening, Welcome to the Money Show.
00:00:42
Speaker 2: Good evening, Ray, thank you for having me.
00:00:45
Speaker 1: Okay, is there a danger of this happening? The last thing we want is to go back onto that gray list?
00:00:51
Speaker 2: Absolutely, Ray. It was a significant milestone and a huge effort on the part of authorities law enforcement to get us off that gray list. But the frightif focus has now shifted from compliance to effectiveness. So what we've got to understand is that the Madlunger Commission is directly relevant to our far off standing because it goes to the core weakness that actually triggered the grade listing in twenty twenty three, and this was ineffective law enforcement and systemic corruption. So I think it is very relevant and we are going to be monitored closely on what we do in response to the findings of the mud Lunger Commission and these referrals of generals and other corruptoral players for prosecution.
00:01:35
Speaker 1: Yeah, what worries us the most is the gray list was is designed to make sure there's no money laundering, that terror organizations don't get their cash, things like that. Stephen, what is the criteria then to avoid the gray list? I mean, or to get onto the gray list? What makes you get onto the gray list? Could just land us there, then.
00:01:58
Speaker 2: It could land us back there. And the risk is that, you know, we have to demonstrate to sustained increase in investigations and prosecutions of serious and complex money laundering and related crimes. So the emphasis really is on outcomes, and I think the Mudlunger Commission referrals have been publicly broadcast. The world is watching us, the FATF is watching us. We're going to go into another stage of evaluation and then the enforcement of our laws is going to come under scrutiny. So it really is effectiveness, not just compliance, which is going to be tested by the FATF. And I think what the Midlunger Commission has exposed is vulnerabilities, corruption and even sabotage of our criminal justice system, and we need to demonstrate that we are able to deal with that.
00:02:53
Speaker 1: How do you demonstrate that when you're National Police Commissioner who's now been suspended is appearing in court. He's the third commissioner to in now face chargers. I mean, it's not looking good for our country. How do you demonstrate how do you pull back from this?
00:03:09
Speaker 2: I think our courts must deal with these perpetrators of wrongdoing, these rogue actors who are in critical functions and roles within our criminal justice system. We need to make an example of them. We have seen a number of arrests recently and I do hope that the NPA swinging too immediate action and get prosecutions UNDERWAGH. And then the way we demonstrate enforcement is through getting convictions and the second element is recovery of criminal proceeds. We've also got to go after the money. So I think we have to understand the handling of the mud Lunga Commission is a litmus test for South Africa's post gray listing credibility, and if we demonstrate effective follow through, it'll reinforce confidence in the system and it will demonstrate to if the FF the FATF that we we have a criminal justice system that despite these exposures and revelations coming out of the much longer commission, that the system still works and that is critically important. Ray.
00:04:09
Speaker 1: Yeah, But it also goes beyond this. If you have a look at the illicits, tobacco crimes and decats, the fact that you can go by yourself a packet of cigarettes if you really want to, at some corner cafe for about seven bucks or something like that. These guys are making millions or even billions of rams. It stretches beyond that because that kind of money can then be used for really bad purposes. Do we not need to clamp down on illegal or tobacco and also illegal alcohol?
00:04:39
Speaker 2: Absolutely, the illicit trades is something that must get attention from the authorities. And we know one of the devastating consequences of state capture was that the revenue authorities had illicit trade units that were deliberately decapacitated, and we've got to get those entities to function and Ray, where the money ends up going sometimes is also it ends up in the hands of terrorist organization. And remember the FATF was also concerned through the lack of enforcement, prosecution, and solid investigations against terrorist cells that operate within our country. So I think that's another element that is going to require commitment from the authorities to really root out the right.
00:05:25
Speaker 1: Yeah, one of the big things in the news at the moment is illegal foreigners, people in our country illegally, and the fact that so many people have been able to enter into our country. So that's the one thing. But sort of lending or leading off that is the fact that we've got porous borders in that people can enter into South Africa is that's still kind of a factor as well, because gray listing means protecting the rest of the world against terror organizations, yet our borders are still so porous.
00:05:57
Speaker 2: You're right, Ray, that is an additional factor. But I think the key here is really the criminal syndicates that have been exposed and that have infiltrated our criminal justice system. That needs to be rooted out, and we've got to show that we actually win in the battle. The gray listing exit is half the battle one, but what we need is continuous enforcement and prosecution.
00:06:21
Speaker 1: Yeah. See when you spoke about any valuation process, what happens next.
00:06:27
Speaker 2: The new evaluation cycle, the FARTIFT will conduct a further peer review, and it's expected to be broader and tougher than the previous review. Previously, we didn't have robust laws to combat serious money laundering and corrupt activity, and what we've seen is as a result of the gray listing as well as state capture, we've really beefed up the Company's Act, the Trusteeds Act, the Nonprofit Organizations Act, which was a convenient way for terrorist cells to fund themselves and conceal their identity and involvement. Those laws were passed, and what we now have to do is we have to demonstrate to the FATF that we actually are using these laws, that they are being enforced and we're getting results from it. We also need to see greater emphasis on the Financial Intelligence Center coordinating investigations, providing the research and the intelligence to fund really comprehensive investigations by the DPCI and the authorities.
00:07:27
Speaker 1: Yeah, when will we know? I mean, is there a time period that sets us out where it's just this just an evaluation process that'll take several months.
00:07:36
Speaker 2: It's an evaluation process that will be undergone for the next year or two rate, it's not an instant process. But what is so important to our country is, you know, we really don't want to go back to being grade listed with a terrible experience, and I'm delighted at how quickly we actually manage to get off the grade list. Now we've got to demonstrate to fight that these new laws that we've put into place with identify and Ultimate Beneficial Owners, identifying terrorist activity, the enhanced powers of the FICK, that all of these are effective and are working.
00:08:11
Speaker 1: Yeah, let's hope that we do avoid that at all costs. Stephen, Thank you so much. Good to chat you on the money showed. Stephen Pale, head of enes A Forensics Practice. Good to have you with us.
Speaker 1: They are concerns that the latest revelations, arrests and suspensions in our police related to the Madlanga Commission of Inquiry, of course, may affect our gray listing status here. Remember so that was taken off the gray list. I think it was October last year, with the country managing to meet all these security requirements. However, the latest events surrounding the Madlagga Commission of Inquiry have seen some of the police's top leadership either suspended or fired. If you have a look at Fani Massamola, you have a look at some of the other generals as well. There's a major problem for joining us is Stephen Powell, head of NS's forensics practice. Stephen I good evening, Welcome to the Money Show.
00:00:42
Speaker 2: Good evening, Ray, thank you for having me.
00:00:45
Speaker 1: Okay, is there a danger of this happening? The last thing we want is to go back onto that gray list?
00:00:51
Speaker 2: Absolutely, Ray. It was a significant milestone and a huge effort on the part of authorities law enforcement to get us off that gray list. But the frightif focus has now shifted from compliance to effectiveness. So what we've got to understand is that the Madlunger Commission is directly relevant to our far off standing because it goes to the core weakness that actually triggered the grade listing in twenty twenty three, and this was ineffective law enforcement and systemic corruption. So I think it is very relevant and we are going to be monitored closely on what we do in response to the findings of the mud Lunger Commission and these referrals of generals and other corruptoral players for prosecution.
00:01:35
Speaker 1: Yeah, what worries us the most is the gray list was is designed to make sure there's no money laundering, that terror organizations don't get their cash, things like that. Stephen, what is the criteria then to avoid the gray list? I mean, or to get onto the gray list? What makes you get onto the gray list? Could just land us there, then.
00:01:58
Speaker 2: It could land us back there. And the risk is that, you know, we have to demonstrate to sustained increase in investigations and prosecutions of serious and complex money laundering and related crimes. So the emphasis really is on outcomes, and I think the Mudlunger Commission referrals have been publicly broadcast. The world is watching us, the FATF is watching us. We're going to go into another stage of evaluation and then the enforcement of our laws is going to come under scrutiny. So it really is effectiveness, not just compliance, which is going to be tested by the FATF. And I think what the Midlunger Commission has exposed is vulnerabilities, corruption and even sabotage of our criminal justice system, and we need to demonstrate that we are able to deal with that.
00:02:53
Speaker 1: How do you demonstrate that when you're National Police Commissioner who's now been suspended is appearing in court. He's the third commissioner to in now face chargers. I mean, it's not looking good for our country. How do you demonstrate how do you pull back from this?
00:03:09
Speaker 2: I think our courts must deal with these perpetrators of wrongdoing, these rogue actors who are in critical functions and roles within our criminal justice system. We need to make an example of them. We have seen a number of arrests recently and I do hope that the NPA swinging too immediate action and get prosecutions UNDERWAGH. And then the way we demonstrate enforcement is through getting convictions and the second element is recovery of criminal proceeds. We've also got to go after the money. So I think we have to understand the handling of the mud Lunga Commission is a litmus test for South Africa's post gray listing credibility, and if we demonstrate effective follow through, it'll reinforce confidence in the system and it will demonstrate to if the FF the FATF that we we have a criminal justice system that despite these exposures and revelations coming out of the much longer commission, that the system still works and that is critically important. Ray.
00:04:09
Speaker 1: Yeah, But it also goes beyond this. If you have a look at the illicits, tobacco crimes and decats, the fact that you can go by yourself a packet of cigarettes if you really want to, at some corner cafe for about seven bucks or something like that. These guys are making millions or even billions of rams. It stretches beyond that because that kind of money can then be used for really bad purposes. Do we not need to clamp down on illegal or tobacco and also illegal alcohol?
00:04:39
Speaker 2: Absolutely, the illicit trades is something that must get attention from the authorities. And we know one of the devastating consequences of state capture was that the revenue authorities had illicit trade units that were deliberately decapacitated, and we've got to get those entities to function and Ray, where the money ends up going sometimes is also it ends up in the hands of terrorist organization. And remember the FATF was also concerned through the lack of enforcement, prosecution, and solid investigations against terrorist cells that operate within our country. So I think that's another element that is going to require commitment from the authorities to really root out the right.
00:05:25
Speaker 1: Yeah, one of the big things in the news at the moment is illegal foreigners, people in our country illegally, and the fact that so many people have been able to enter into our country. So that's the one thing. But sort of lending or leading off that is the fact that we've got porous borders in that people can enter into South Africa is that's still kind of a factor as well, because gray listing means protecting the rest of the world against terror organizations, yet our borders are still so porous.
00:05:57
Speaker 2: You're right, Ray, that is an additional factor. But I think the key here is really the criminal syndicates that have been exposed and that have infiltrated our criminal justice system. That needs to be rooted out, and we've got to show that we actually win in the battle. The gray listing exit is half the battle one, but what we need is continuous enforcement and prosecution.
00:06:21
Speaker 1: Yeah. See when you spoke about any valuation process, what happens next.
00:06:27
Speaker 2: The new evaluation cycle, the FARTIFT will conduct a further peer review, and it's expected to be broader and tougher than the previous review. Previously, we didn't have robust laws to combat serious money laundering and corrupt activity, and what we've seen is as a result of the gray listing as well as state capture, we've really beefed up the Company's Act, the Trusteeds Act, the Nonprofit Organizations Act, which was a convenient way for terrorist cells to fund themselves and conceal their identity and involvement. Those laws were passed, and what we now have to do is we have to demonstrate to the FATF that we actually are using these laws, that they are being enforced and we're getting results from it. We also need to see greater emphasis on the Financial Intelligence Center coordinating investigations, providing the research and the intelligence to fund really comprehensive investigations by the DPCI and the authorities.
00:07:27
Speaker 1: Yeah, when will we know? I mean, is there a time period that sets us out where it's just this just an evaluation process that'll take several months.
00:07:36
Speaker 2: It's an evaluation process that will be undergone for the next year or two rate, it's not an instant process. But what is so important to our country is, you know, we really don't want to go back to being grade listed with a terrible experience, and I'm delighted at how quickly we actually manage to get off the grade list. Now we've got to demonstrate to fight that these new laws that we've put into place with identify and Ultimate Beneficial Owners, identifying terrorist activity, the enhanced powers of the FICK, that all of these are effective and are working.
00:08:11
Speaker 1: Yeah, let's hope that we do avoid that at all costs. Stephen, Thank you so much. Good to chat you on the money showed. Stephen Pale, head of enes A Forensics Practice. Good to have you with us.
