Cape Town - The Banking Association of South Africa (Basa) is relieved that President Jacob Zuma has finally signed the Financial Intelligence Centre Amendment (Fica) Bill into law, the association said on Saturday.
“We have been urging the president to sign the bill for a number of months and, though we welcome the signing, it is a pity we reached a stage where FATF (the Financial Action Task Force on Money Laundering) had to warn us we would be delinquent if we had not signed by June,” Basa's managing director Cas Coovadia said.
“The signing of the bill ensures banks in South Africa remain at the cutting edge of global best practice and we are able to identify and deal with money laundering, terrorism financing, and other such activities.
“The signing also enables a risk-based approach to combating these activities so that bank clients who are less susceptible to such activities will be subject to lighter touch regulation and those significantly susceptible to such activities will be subject to stronger oversight,” Coovadia said.
However, the DA warned there was a risk that Finance Minister Malusi Gigaba may delay implementation of the bill - one of the most important legislative weapons in the fight against corruption in South Africa - despite it having been signed by Zuma.
The Fica Amendment Bill provided for ongoing monitoring of the business relationships, sources of wealth, and sources of funds of “domestic prominent influential persons” and family members and close associates of such persons in South Africa, DA spokesperson David Maynier said.
“What this means is that President Jacob Zuma and his most important clients, the Guptas, are going to feel the heat as their business relationships, sources of wealth, and sources of funds are subjected to ongoing monitoring by financial institutions in South Africa.
“However, the battle is far from over and there could still be significant delays in implementing the legislation, because despite being signed into law the legislation only actually commences on a date to be determined by the minister and published in the Government Gazette,” he said.
The Financial Intelligence Centre had to, for example, still produce an official list of “domestic prominent influential persons” and of family members and known close associates of such persons.
This would be a massive task, because the list included, for example, senior executives as well as family members and close associates of senior executives of all companies supplying goods and services above a threshold amount which had to be determined by the minister and published in the Government Gazette.
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There were also doubts about whether the Financial Intelligence Centre, which only had a budget of R289million for 2017/18, would have the resources to effectively implement the Fica Amendment Bill, he said.
“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.
"The minister should, therefore, take decisive action and set out clear time frames and budgets for the implementation of the bill," Maynier said.
Earlier on Saturday, the presidency said Zuma had signed the bill into law. It said the measure further strengthened the “transparency and integrity of the South African financial system in its objectives to combat financial crimes, which include tax evasion, money laundering, and the financing of terrorism and illicit financial flows”.
The amendments also made it harder for people involved in illegitimate activities or tax evasion to hide behind legal entities such as shell companies and trusts, the presidency said in a statement.