US embassy cable - 05PRETORIA4473

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