On Saturday 29 April President Jacob Zuma signed the long-awaited Financial Intelligence Centre (FIC) bill into law. The amended FIC act is aimed at strengthening domestic regulations that deal with money laundering, the financing of terrorism, and illicit financial transactions. It brings South Africa up to standards and requirements set by the Financial Action Task Force (FATF). of which the country is a member.
The Paris-based FATF works internationally with financial institutions to combat financial crime. It had set South Africa a deadline of June to achieve compliance, including amending the act.
FICA affects mostly banks, foreign exchange service providers, and other such institutions, as these are some of the channels through which criminals have been known to launder their ill-gotten gains. However, there is still resistance. The Progressive Professionals Forum plans to challenge FICA in court because, it says, the act gives unnecessary powers to South African banks. While the organisation supports the aim of the act, it has some concerns and will petition Finance Minister Malusi Gigaba to postpone implementation.
Civil society had its say
Civil society has been extensively involved in the drafting of the bill. Corruption Watch twice made submissions before Parliament’s standing committee of finance. Initially we were concerned with lack of clarity around the definition of beneficial ownership and the definition of domestic and foreign prominent influential persons. Our later submissions related to section 45B(1C) which deals with warrantless searches in clause 32 of the bill.
Meanwhile, the Council for the Advancement of the South African Constitution (CASAC) will monitor the implementation, which will commence on a date yet to be determined by Gigaba. The date will be published in the Government Gazette.
“We will seek to see where the weaknesses and gaps are, where there is a lack of political will to assist those agencies to do their work, we will call those out as we do in other areas of our work,” Lawson Naidoo, CASAC’s executive secretary, told eNCA in an interview. The organisation had set a deadline for the signing of the bill, failing which it would have approached the court to force Zuma to sign
DA MP and spokesperson on finance David Maynier said that he expected obstacles. “The minister will no doubt be under political pressure to delay the implementation of the legislation to protect his political master’s most important clients, the Guptas.”