Corruption Watch has made submissions on the draft Financial Intelligence Centre (FIC) amendment bill. The treasury published the bill on 21 April, and invited public comment until 31 May. The bill was approved by Cabinet on 15 April.

“We are generally impressed by the commitment by the National Treasury and FIC to deal with the acquisition of intelligence around certain financial crimes and the improvement of certain supervisory and oversight functions of the FIC,” said Leanne Govindsamy, Corruption Watch’s legal head. “We have therefore limited our submissions to key issues which are pertinent to Corruption Watch’s work and mandate.”

The organisation is concerned primarily about lack of clarity around the definition of beneficial ownership and the definition of domestic and foreign prominent influential persons.

In both instances, Corruption Watch has noted some limitations and inconsistencies in the definitions while in terms of the former, the bill’s definition is not completely in line with international standards.

Other concerns expressed by Corruption Watch include :

  • the dissolution of the Counter-Money Laundering Advisory Council without the introduction of new provisions on the co-ordination of FIC activities.
  • Inadequate measures for supervisory bodies to impose sanctions on accountable institutions.
  • Inadequate measures for the FIC to exercise oversight over and impose sanctions on non-compliant supervisory bodies.
  • The impact of changes to the penalties for non-compliance, as these may diminish the severity of non-compliance on the part of accountable institutions and supervisory bodies.

Download Corruption Watch’s submissions as a PDF.

Taking steps against money-laundering

South Africa’s commitment to money laundering, and the associated activity of terrorism financing, is expressed in legislation such as the Financial Intelligence Centre Act and the Prevention of Organised Crime Act. The country has also ratified the UN Convention Against Corruption.

In addition, South Africa is a member of the inter-governmental Financial Action Task Force (FATF). Every member of FATF undergoes a mutual evaluation to ensure compliance with the agreed standards on anti-money laundering (AML) and combating the financing of terrorism (CFT). South Africa was evaluated by FATF in 2009 and is undergoing re-evaluation in 2015.

The new bill seeks to enhance South Africa’s ability to combat financial crimes by proposing measures to address threats to the stability of South Africa’s financial system posed by money laundering and terrorism financing. The bill also addresses regulatory gaps identified from the 2009 FATF evaluation and the International Monetary Fund’s technical note on AMF and CFT in South Africa.

The bill enhances South Africa’s AML and CFT regulatory regime by specifically:

  • Providing for the implementation of the UN Security Council Resolutions relating to the freezing of assets;
  • Enhancing the supervisory powers of the FIC and extending its functions in relation to suspicious transactions;
  • Providing for the adoption of a risk-based approach to customer due diligence measures;
  • Introducing the concepts of beneficial ownership, ongoing due diligence, and foreign and domestic prominent influential persons;
  • Enhancing the customer due diligence requirements;
  • Dissolving the Counter-Money Laundering Advisory Council; and
  • Enhancing certain administrative and enforcements mechanisms.
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Corruption Watch has made submissions on the draft Financial Intelligence Centre amendment bill. The organisation expressed concern about lack of clarity around the definition of beneficial ownership and the definition of domestic and foreign prominent influential persons, as well as on other matters.