Following a long delay, President Zuma finally signed the Financial Intelligence Centre Amendment Bill into law at the end of April 2017. The bill is required for South Africa to meet its international commitments with the Financial Action Task Force (FATF).
The amendments to the Financial Intelligence Centre Act (FICA) 2001 are important because they allow for the Financial Intelligence Centre (FIC) to perform its watchdog role more efficiently and effectively. The amendments enhance the FIC’s ability to generate quality financial intelligence which can then be shared with a wider range of government departments and agencies, in an effort to combat financial crimes (such as money laundering and terrorist financing).
The amendments are intended to make it more difficult for people involved in illegitimate activities or tax evasion to hide behind legal entities, such as shell companies and trusts.
The amendments also bring about improved scrutiny and ease of reporting by introducing a risk-based approach towards money laundering activities. Banks are now obliged to implement and apply significant procedures to ensure compliance with international standards. The amendments are intended to:
make banking activity easier for ordinary people with regular banking transactions
give banks greater oversight so that they can identify suspicious activity promptly and report this to the Financial Intelligence Centre
give banks greater oversight of bank accounts held by politically influential people as well as ‘high risk’ accounts with large balances and lots of banking transactions
South Africa had been given until June 2017 to enact the legislation. The signing of the FICA Amendment Act is important for South Africa’s continued membership of the FATF. It is now up to Finance Minister Malusi Gigaba to implement the bill.
If you need any further information on FICA and how it affects you, please contact our offices.