Gordhan supports Fica legislation

Finance Minister Pravin Gordhan. File picture: Chris Collingridge

Finance Minister Pravin Gordhan. File picture: Chris Collingridge

Published Sep 29, 2016

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Cape Town - Finance Minister Pravin Gordhan has backed the Financial Intelligence Centre Amendment Bill (Fica), saying it is in line with global standards.

Gordhan said the bill will clamp down on illicit financial flows and fight money laundering.

This was an important mechanism in strengthening the country’s financial systems and the country will have to stick to the global standards.

This would also help the country when its money laundering and financial terrorism instruments are reviewed in 2019 by the Financial Action Task Force.

Parliament passed the Fica Bill in May and has been referred to President Jacob Zuma to sign it into law.

The bill gives banks powers to perform due diligence on “politically exposed people”.

But some sections of the ruling party and outsiders have opposed the legislation.

The Council for the Advancement of the Constitution in South Africa (Casac) wrote to Zuma last week to urge him to sign the Fica Bill into law or refer it back to Parliament within 30 days if he had concerns.

Casac warned Zuma if he did not sign the bill into law or refer it back to Parliament for correction he could face legal action.

In the financials of the Financial Intelligence Centre tabled in Parliament yesterday, Gordhan said this was an important bill.

“Shortly after the close of the reporting period, Parliament unanimously adopted the amendments to the Financial Intelligence Centre Act of 2001,” he said.

He said the amendments were necessary to tighten the financial systems of the country to fight money laundering and financial terrorism.

“The new Act introduces a risk-based approach which allows business to take a differentiated stance on understanding its risks and the people behind the entities it deals with every day. In so doing, institutions will have the flexibility to tailor their customer engagements to customer characteristics and each institution’s unique business mix,” said Gordhan.

“Changes to the regulatory framework will help prepare the country for the next round of mutual evaluations by the Financial Action Task Force in 2019, when it assesses South Africa’s anti-money laundering and counter-terror financing environment.”

Gordhan said the amendments were in line with global standards put out in 2012. It was important South Africa complied with international standards.

Zuma has not indicated how soon he will sign the bill into law.

But the Progressive Professionals Forum and the ANC Youth League, have opposed the bill. However, Casac said the legislation overrode everything raised in the objections by other parties and Zuma had to sign it into law urgently.

CAPE ARGUS

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