SOUTH AFRICA: POST ASSESSMENT OF CASH COURIER

C O N F I D E N T I A L SECTION 01 OF 02 PRETORIA 004473

SIPDIS

DEPT FOR AF/S (MTABLER-STONE)
TREASURY FOR BCUSHMAN

E.O. 12958: DECL: 11/07/2015
TAGS: EFIN KTFN PTER ETTC PREL SF
SUBJECT: SOUTH AFRICA: POST ASSESSMENT OF CASH COURIER
ENVIRONMENT

REF: A. TREASURY DTE 011853Z NOV 05

B. PRETORIA 4093

C. PRETORIA 2671

D. PRETORIA 2160

E. PRETORIA 1789

F. PRETORIA 1599

G. 04 PRETORIA 5452

Classified By: Charge d'Affaires Jeff Hartley for Reasons 1.4 (b) and (
d).


1. (U) Post responses follow below according to subheadings
on Ref A.

The Border and the Legal Environment
--------------


2. (SBU) South Africa maintains declaration systems at all
border points for cash and other goods. The South African
Revenue Service (SARS) requires travelers to fill out a
customs declaration stating the amount of currency in their
possession upon entering and exiting the country. SARS does
not, however, prominently display its currency declaration
regulations in customs areas. Individuals traveling for
personal reasons can carry 35,000 rand value ($5,400) in
foreign currency per trip, while business travelers can carry
140,000 rand value ($21,500) in foreign currency per trip.
The South Africa Government (SAG) caps individuals leaving
South Africa for personal reasons at annual limits of 160,000
rand ($24,600) per adult and 50,000 rand ($7,700) per child
under 12 years of age. Any amounts exceeding the restricted
amounts require prior approval from the South African Reserve
Bank (SARB).


3. (C) Post does not believe that SARS customs officials are
adequately trained or aware of cash courier problems.
Customs officials are known to be corrupted, although not as
easily as the Department of Home Affairs immigration
officials. SARS officials are better trained and more highly
paid than Home Affairs border officials. Nevertheless, post
does not believe that SARS is effective in addressing the
ongoing smuggling of cash and goods in and out of South
Africa. Smuggling cash in and out of South Africa is illegal
and host law enforcement and intelligence agencies share
information in their effort to combat financial crimes.


4. (SBU) As stated in Refs B through G, South Africa has an
active and growing financial intelligence unit -- the
Financial Intelligence Centre (FIC). The FIC has received
over 33,000 suspicious transaction reports since its
inception in February 2003, but only passed on about one
percent of the reports to law enforcement for further
investigation. As a result, the FIC continues to focus on
improving the quality of suspicious transaction reports. In
addition, recent speculation in the press indicated that
South Africa's Financial Intelligence Centre Act may be
amended to give the FIC expanded powers to use information
from suspicious transaction reports in court prosecutions.

The Political Environment
--------------


5. (C) South Africa is well aware of Financial Action Task
Force (FATF) Special Recommendation IX (regarding cash
couriers/terrorist financing) as it assumed the one-year FATF
Presidency on July 1 (Ref C). Current legislation contains
provisions for cross-border currency transactions, but South
Africa has not yet fully enacted its monitoring system to
post's knowledge. Post officials have engaged the SAG on the
issue of cash couriers in the context of terrorist financing.
The SAG is concerned about the issue and appears willing to
address it in terms of receiving training or information from
U.S. agencies.

USG Assistance
--------------


6. (C) To post's knowledge, South Africa has not received any
training on the cash courier issue from any donor countries.
Post recently held terrorist financing training for South
African Police Service (SAPS) criminal intelligence and FIC
officials. However, cash courier issues were not addressed.
Per Refs B and D, the SAPS and FIC continually request
additional training from USG agencies. Post believes these
efforts are key to fostering closer relations with the SAG.
The SAG would appreciate future USG technical assistance on
cash couriers. Post recommends that after initial contact on
this issue, SAG hardware and software needs be assessed.


7. (C) In December 2004, the SARB Exchange Control Department
did request USG assistance regarding a $6 million cash
shipment detained at Johannesburg airport. The shipment was
from Dimco Diamond Company of Israel to a company named
Ascorp in Luanda, Angola. The SARB wanted a U.S. official to
determine if the money was counterfeit. The SARB later
informed Econoff that it had released the shipment when it
received additional paperwork and that it had indeed been a
routine transaction between the two companies. Post
determined that the companies involved were legitimate, but
never confirmed that these large cash shipments were routine.
The Strategic Picture
--------------

8. (C) Post agrees that all six elements listed in Ref A are
essential in the effort to combat terrorists' use of cash
couriers. Specifically, post believes that having properly
trained authorities is of particular importance in South
Africa, as is the bilateral sharing of intelligence.
HARTLEY