International funds transfers in Africa and the compliance measures to detect and combat financial crime—an introduction
Author Karl Marxen
Affiliations: First State Examination (Hamburg), PGCert (Witwatersrand), LLM (Stellenbosch), LLD (Johannesburg). Visiting Researcher at the Centre for Banking Law, Faculty of Law, University of Johannesburg; Fellow of the Institute of International Banking Law & Practice (IIBLP), USA.
Source: South African Mercantile Law Journal, Volume 31 Issue 2, 2019, p. 261 – 297
The article examines measures to identify and curb illicit international funds transfers in Africa. It considers formal means of payment and funds transfer (open account trading, documentary letters of credit, documentary bank collections, payment intermediaries and other (formal) funds transfer services), but also takes account of informal or emerging options of payment such as mobile-phone-based systems (eg, M-Pesa) and hawala. The article sheds light on important concepts such as ‘know-your-customer’ (KYC), ‘risk-based approach’, and the role of so-called ‘financial crime indicators’ in combatting illicit financial flows. Special emphasis is placed on Africa and Africa-specific issues. A mature and effective legislative and regulatory framework, and due diligence in the scrutiny of parties and transactions involving funds transfers, both locally and internationally, will be necessary to prevent or reduce the illicit flow of financial means and financial crime.