DA finance spokesman David Maynier said Masutha's call for the council, which would count the directors general of several departments, to be reinstituted by way of regulation instead of a law amendment would loosen the control of National Treasury over the operations of the centre.
Masutha and National Director of Public Prosecutions Shaun Abrahams last week at a media briefing said the failure of successive finance ministers to establish the council had hampered the fight against illicit money flows.
Abrahams singled out former finance minister Pravin Gordhan for criticism and said the absence of a council meant that the FIC had never been called to account.
The original Financial Intelligence Act of 2002 provided for the establishment of the council but the provision was done away with in the amendment passed this year.
The amendment bill was subject to lengthy political wrangling and President Jacob Zuma's decision to send it back to Parliament was heavily criticised. Maynier said the council had been intended as an advisory structure but Masutha was plainly, and worryingly, pleading for it to be brought back as an accountability structure.
"What is particularly scary is that the minister envisages the counter money laundering advisory council, not as an advisory structure, as it was originally envisaged, but as an oversight and accountability structure, keeping an eye on the FIC, and believes that it can be reinstituted by regulation, rather than an amendment to the Financial Intelligence Centre Act," he said.
"The fact is that the call to reinstitute the counter money laundering advisory council is a blatant 'power grab' aimed at removing, or diluting, National Treasury’s control over the the day-to-day operations of the FIC, which would be bad for the fight against corruption in South Africa."
Maynier urged Finance Minister Malusi Gigaba to use his maiden budget vote speech in the National Assembly on Tuesday to give the assurance that he would resist attempts to dilute his authority over the FIC.