Cape Town - South Africa could face a public rebuke from the Financial Action Task Force (FATF) when the body meets in February for failing to sign into law amendments to the Financial Intelligence Centre Act.
BusinessLive on Tuesday reported that South Africa could be “slapped with a warning” from the FATF – an international body that monitors compliance with anti-terrorism and anti money-laundering regulations.
At its June 2016 meeting the FATF gave South Africa a deadline extension from September to February to finalise the FIC Bill – a target the country is unlikely to meet, after President Jacob Zuma had referred the bill back to Parliament in November last year.
In December, shortly before Parliament adjourned for the year-end holidays, the standing committee on finance deliberated on the way forward following Zuma’s reservations about the constitutionality of the FIC Bill.
READ: FIC Bill unconstitutional, says Zuma
Zuma was particularly concerned about the bill's provision of warrantless searches of suspect individuals – a concern that was also raised by the Progressive Professionals Forum (PPF), led by former government spokesperson Mzwanele Manyi, who had petitioned Zuma to not sign the FIC Amendment Bill into law.
READ: Zuma still applying his mind to FIC Bill
At the standing finance committee meeting late last year, it was decided that public hearings will be hosted on January 24 to get input from stakeholders regarding the constitutional reservations aspect of the bill.
At the time, National Treasury deputy director-general Ismail Momoniat told MPs that South Africa had been served “all kinds of yellow cards” at the previous FATF meeting in July because of delays in the ratification of the FIC Bill.
The body urged South Africa to get the bill on the statute books and implement regulations so that the amended legislation could function properly.
Momoniat said South Africa would do its best to explain to the FATF in the upcoming February meeting the President’s constitutional reservations so as to avoid a public rebuke from the body.
South Africa’s banking sector has also expressed concern over Zuma’s decision to refer the FIC Amendment Bill back to Parliament. Banking Association Managing Director Cas Coovadia earlier told Fin24 that South Africa’s banking system was operating in a global environment which necessitated compliance with international standards and regulations and that the signing of the FIC Bill into law was therefore an “urgent” matter.
READ: FIC Bill delays could harm SA's global standing - banking body
In addition, Reserve Bank deputy governor and banks registrar Kuben Naidoo warned that Zuma’s decision to refer the bill back to Parliament could tarnish South African banks’ relationship with the international banking community, BusinessLive reported.
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