SA Warned Against Failing To Pass The Fica Bill


The South African government might be facing the Financial Action Task Force plenary meeting in February, to explain why it failed to sign into law the amendments to the Financial Intelligence Centre Act (Fica) bill.

Treasury deputy director-general Ismail Momoniat said this in an interview on Monday.

The international task force, which monitors compliance with anti-terrorism and money-laundering regulations, gave the country an extension from September to February to finalise the bill and the Council for the Advancement of the Constitution (Casac) warned that any further delay in passing the bill could have grave financial consequences for SA.

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The Fica bill which aimed at aiding South Africa in combating money laundering and financial terrorism, has been sent back to Parliament by President Jacob Zuma in November, about six months after its adoption.

The bill made provision for senior bank officials to approve accounts of prominent influential people – such as top government officials.

It is however, unlikely that the Fica bill will be on the statute books before the task force’s mid-February deadline even as the standing committee on finance plans to hold public hearings on the issue when Parliament reopens on January 24 but the bill will still have to be adopted by the National Assembly and signed into law by the president.

Reserve Bank deputy governor and banks registrar Kuben Naidoo warned about the consequences of SA not complying with Financial Action Task Force rules in an affidavit submitted to the High Court in Pretoria about Finance Minister Pravin Gordhan’s application for a declaratory order confirming that he has no power to intervene in the relationship between banks and clients.

“SA’s failure to bring the Financial Intelligence Centre Amendment Bill into operation will likely result in a negative statement from [the task force] … which will require other member countries to re-evaluate the risks of dealing with South African financial institutions. he said as he further clams that Zuma’s actions have placed SA’s banks in jeopardy.

“This may result in foreign banks cutting off their correspondent banking relationships with South African banks,” Naidoo said.

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He implied that Zuma’s reasons for sending the Fica bill back to Parliament were questionable as the amendments placed stricter limitations on warrantless searches — the reason why Zuma referred the bill back to Parliament — than did the original act passed in 2001.

“Ironically, the current version of Fica provides that all inspections under section 45B of the act will take place without a warrant. The bill, by contrast, introduces the requirement that searches must be undertaken with a warrant and only in exceptional circumstances will warrantless searches be permitted,” Naiddo said in his affidavit.

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