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The world of financial crime

Financial crime has been a pivotal issue in the global arena for several decades now. Authorities are constantly looking for new ways to track down and prevent financial crime, and criminals are always developing innovative tactics in order to stay ahead.

Financial crime is defined as crime that is specifically committed for the financial benefit of the criminal or in the case of terrorism, their ideology.

These crimes can occur in many different forms, and they happen all over the world. Some of the most common crimes facing the financial sector are money laundering, terrorist financing, fraud, tax evasion, embezzlement, forgery, counterfeiting, and identity theft. These crimes are committed every single day, and governments across the globe are constantly prosecuting financial criminals while searching for new ones.

The two most prevalent types of financial crime faced today are money laundering and terrorist financing. While the term “terrorist financing” is fairly straightforward, money laundering can be a more complicated concept to grasp.

In essence, money laundering is simply the act of disguising profits that were obtained from crime.

Cartels and mafia groups are some of the most prominent money launderers in popular news media, but money laundering can also extend beyond organised crime groups and can happen at many different scales.

Criminals who launder money and provide financing to terrorists generally use very sophisticated techniques, which means they are difficult to detect and catch. Both of these crimes are often international, as money launderers and terrorist financiers need to smuggle cash over borders to facilitate their plans. It is not uncommon for these criminals to have corrupt connections in government and business; these could include financial institution employees, accountants, attorneys, government officials and law enforcement.

Institutions and individuals trust financial institutions to look after their property (money) responsibly and keep it safe. That trust in the economic system is one of the fundamental foundations on which our world functions. If that trust were to be eroded through involvement in financial crime, then this would impact the ability of all individuals and institutions to transact and trade effectively both here and internationally. In turn, it would have far reaching consequences for the local and global economy.

To address this, international regulations place demands on all Accountable and Financial Institutions with the aim of ultimately deterring financial crime through the effective detection, reporting and prosecution of those involved.

The regulatory environment, compliance frameworks and operational activities that support them are complex and continually evolving to adapt to modern threats and risks. Non-compliance with these regulations can have severe consequences.

That's where IQEdge comes in. With over 20 years practical experience in financial operations and compliance we can provide pragmatic assurance to a range of businesses who are subject to financial regulatory requirements such as the FAIS (Financial Advisory and Intermediary Services) Act and the FIC (Financial Intelligence Centre) Act.

To find out how you can benefit from IQEdge's Intelligent Compliance, get in touch on 010 021 0300.