SA's motor vehicle dealers are at high risk of falling prey to money laundering by clients who use cash to buy vehicles.
“The ease of purchasing a vehicle, the extensive and prevalent use of cash and the fact that motor vehicle dealers are not subject to all FIC Act compliance obligations contribute to the sector being at a high risk for money laundering.
“There are many private transactions regarding pre-owned vehicles taking place on a daily basis without effective monitoring as private individuals are not compelled to report cash transactions.” “Although the FIC received a large number of reports from the sector, the number of motor vehicle dealers that are actively reporting in comparison with the total number of registered entities may be considered as low.
The FIC said it established that large numbers of dealers were no longer receiving cash on their premises due to safety concerns. The price and types of the vehicles sold, including conventional passenger, sports, off-road, vintage and collectible vehicles, also impacts on the money laundering risks faced by the sector.
Some clients, such as foreign prominent public officials, domestic prominent influential persons , complex legal structures or foreigners potentially pose a higher risk for money laundering, depending on the identified circumstances“Some clients, such as foreign prominent public officials, domestic prominent influential persons, complex legal structures or foreigners potentially pose a higher risk for money laundering, depending on the identified circumstances.
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