MIMICKING SISYPHUS? AN EVALUATION OF THE KNOW YOUR CUSTOMER POLICY

Abstract

Until recently South Africa had reason to consider its anti-money laundering efforts to be comparable with those of the international community. Not only does the country have a comprehensive anti-money laundering regime in place, but its Know Your Customer (KYC) policy compares favourably with policies in place elsewhere. That was the position until recently when a report by the International Monetary Fund criticised South Africa for the apparent failure to successfully prosecute money laundering offenders. This contribution investigates the reasons for the failure. Since banks are compelled to report transactions that involve dirty money to the authorities in terms of the KYC policy, the nature of dirty money is evaluated against the relevant provisions of the Financial Intelligence Centre Act of 2001. It is suggested that much of the blame for the failure to identify and prosecute money launderers can be attributed to the nature of dirty money and the lack of guidance in how to identify it.