There is a risk that Finance Minister Malusi Gigaba may delay implementation of the Financial Intelligence Centre Amendment (Fica) Bill – one of the most important legislative weapons in the fight against corruption in South Africa – despite it having been signed by President Jacob Zuma, the Democratic Alliance said on Saturday.
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 “domestic prominent influential persons”, in South Africa, DA spokesman 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 “domestic prominent influential 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.
There were also doubts about whether the Financial Intelligence Centre, which only had a budget of R289 million 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 Financial Intelligence Centre Amendment Bill.
“Whatever the case, we will have to very carefully monitor the implementation of the Financial Intelligence Centre Amendment Bill,” Maynier said.
Earlier on Saturday, the presidency said Zuma had signed the Fica amendment bill into law. It said the Financial Intelligence Centre Amendment Act 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.
Measures to strengthen anti-money laundering and combating terrorist financing included:
– requiring identification of beneficial owners to prevent natural persons from misusing legal entities for nefarious purposes such as evading tax;
– enhancing the customer due diligence requirements that would ensure that entities fully understood the nature and potential risk posed by their customers;
– providing for adoption of a risk-based approach in the identification and assessment of money laundering and terrorist financing risks and assist in making customer compliance easier;
– providing for implementation of the United Nations Security Council resolutions relating to freezing assets relating to persons associated with terrorism;
– safeguarding information in line with protection of personal information;
– providing for inspection powers for regulatory compliance purposes in accordance with the Constitution; and
– enhancing certain administrative and enforcement mechanisms.
“The amendment act sends a strong message about South Africa’s commitment to combating financial crime, protecting the integrity of our financial system and our tax base, and remaining part of the global financial system. They further demonstrate South Africa’s membership commitments to the financial action task force and United Nations,” the presidency said in a statement.