FIC Bill objections not based on legal opinion - Treasury

Cape Town – Neither the Progressive Professionals Forum nor the Black Business Forum based their objections to the Financial Intelligence Centre (FIC) Bill on a legal opinion, said Ismail Momoniat, deputy director general at National Treasury.

Momoniat was part of a delegation that briefed Parliament’s standing committee on finance on the concerns raised by President Jacob Zuma over the constitutionality of the FIC Bill.

Zuma sent the bill back to Parliament on November 30, arguing that the legislation infringes on individuals’ right to privacy as it gives scope for searches of suspect people without a warrant, which may result in criminal prosecution of such individuals.

According to Zuma, the bill also grants too much discretion to inspectors as they do not require a warrant to search individuals, their residences or workplaces.

Momoniat said in his representation that National Treasury has decided to meet international standards through amendments to the FIC Act, so that South Africa could be compliant with the rest of the world.

“When we went to a meeting with the Financial Action Task Force on Money Laundering (FATF) in June,” Momoniat said, “they were happy with the progress we had made and they changed our deadline to report back to February 2017.

“South Africa is supposed to report back to the FATF by that date on the FIC implementation, but given that the bill will not commence on that date, there’s a risk that the FATF can take steps against South Africa, such as issuing a statement that will express concerns about South Africa’s ability to address deficiencies in its financial regulation system,” Momoniat said.

“We don’t want them (the FATF) to admonish us in a public statement, implying that we’re non-compliant. It’s in our interest to comply with these standards,” he added.

“If we don’t comply, other countries will be less likely to provide information to us regarding anti-money [practices]. They won’t give it to us unless these regulations are in place.”

Momoniat also said that non-compliance with international regulations will make international transactions “harder and more expensive”.

“Places such as Iran, for example, don’t meet these standards. We don’t want to be there. They could terminate our FATF membership. So we must resolve these issues as soon as possible.”