Finance Minister Malusi Gigaba has begun implementing the much anticipated\u00a0Financial Intelligence Centre Amendment (FICA) Act,\u00a0days before South Africa is due to present its progress in rectifying deficiencies in its anti-corruption law at a Financial Action Task Force (FATF) meeting in Paris.<\/p>\n
The bill which saw significant delays before being signed off by President Jacob Zuma is primarily aimed at\u00a0combating money laundering, illicit business practices and the financing of terrorism in the country – bringing it in line with FATF standards.<\/p>\n
This will include new powerful inspection powers for the investigating high-profile individuals and the adoption of a risk based approach in the identification and assessment of money laundering and terrorist financing risk.<\/p>\n
While the first major provisions are now in effect, the Democratic Alliance has noted that Gigaba plans to bring the Act into effect in stages, meaning a number of important provisions will only come into effect on 2 October 2017.<\/p>\n
The battle over the implementation of this legislation is far from over because the implementation of the provision ensuring that ‘Domestic Prominent Influential Persons’, doing business with the state above a certain threshold amount, will be subjected to enhanced scrutiny by financial institutions, is now going to be delayed until after 02 October 2017, said the\u00a0DA’s Shadow Minister of Finance, David Maynier.<\/p>\n
“There is a risk that the process of determining the threshold amount, taken together with the process of generating the required database, may cause an undue delay or even an indefinite delay, in implementing the Financial Intelligence Amendment Act (No. 1 of 2017),” he said.<\/p>\n
“Moreover, an ‘inter-departmental forum’, which is not provided for in the legislation, and for which there is no authority in law, will be established to replace the \u201cCounter-Money Laundering Advisory Council\u201d.”<\/p>\n
“There are no particulars provided about the establishment of the ‘inter-departmental forum’, but there is a real risk that it may be dominated by the ‘security cluster’, and amount to a ‘power grab’ by the ‘security cluster’, who are desperate to get control of the Financial Intelligence Centre.”<\/p>\n
As a result, Maynier has confirmed that the DA plan to\u00a0write to the Chairperson of the Standing Committee on Finance, Yunus Carrim, requesting that he schedule a hearing on the progress of implementing the FICA.<\/p>\n