The Financial Intelligence Centre Act (FICA) is a bill written to combat corruption‚ white collar crime‚ terrorism and money laundering by placing greater scrutiny on the financial affairs of prominent individuals and the politically connected.
The FICA Bill has been in existence since 2001 but came into effect on the 1st of July 2003 and has been at the core of compliance requirements in South Africa.
Remarkably, this Act brings the country in line with similar legislation in other countries designed to reveal the movement of monies derived from unlawful activities and thereby restraining money laundering and other criminal activities.
But since 2016, the proposed amendments to FICA have attracted fierce resistance from some individuals in the country.
Leading the crop of critics to the amendments is the Progressive Professionals Forum (PPF), led by former cabinet spokesman Mzwanele Jimmy Manyi, the Black Business Council and sections of the ANC including the Youth League.
In May 2016, President Jacob Zuma received the Bill from Parliament refused to sign it, citing PPF objections and concerns that a clause allowing for searches without a warrant defies the constitution and limits the right to privacy.
In a meeting with Parliament’s Finance committee on Wednesday, Manyi reiterated that Zuma should not be allowed to sign the bill. He threatened to pull to the court if he eventually does so.
“we will not allow the President to sign into law something that will plunge this country into crisis”.
“We will interdict him in a court of law if he signs this because he won’t be doing his duty in applying the Constitution‚” he said.
Weighing in, Black Business Council President Danisa Baloyi alleged that some banks are already closing the accounts of “hard working” BBC members and listing others as politically exposed persons (or PEPS) because of some clauses contained in the bill.
A notable aspect of the FICA Amendment Bill is the introduction of whistle-blowers as triggers for investigations. This aspect, many believe, will go a long way in instilling more confidence in the system.
Strength/Merit Of The FICA Bill
The Bill introduces a concept of beneficial ownership: This ownership enables the Financial Intelligence Centre (FIC) toconduct thorough investigations into the accounts of benefactors of illicit finance.
FICA Bill empowers banks to engage in diligence reviews of their clients, especially those who hold positions of authority: This can be actualized by those who will be subjected to extra due diligence. Diplomats, CEOs, directors of companies and senior public servants including the president, deputy presidents and mayors, are classified as such “high-risk” clients.
In addition, banks will be required to investigate the sources and beneficiaries of finances deposited into their accounts.
The Bill seeks to bring South Africa’s financial regulatory regime in line with international best practice: Since the bill is aimed at combatting both private and public sector corruption, money-laundering, and terrorism, among other issues, this will launch South Africa to agreements within the United Nations which require the country to enact such legislation..
The proposed amendments to FICA would allow the Centre to access, share and query suspicious transactions of politically-exposed persons.