Cape Town - There has been no word from President Jacob Zuma's office on why he still hasn't signed the Financial Intelligence Centre (FIC) Bill into law, close to two months after it was passed by Parliament.
The bill was unanimously passed by the National Assembly on February 28 2017 and sent to Zuma for ratification.
Presidency spokesperson Bongani Ngqulana did not respond to Fin24’s request for comment on why the bill has still not been signed by Zuma, and what the reasons for the delay are.
Time is however running out for South Africa, as the Financial Action Task Force (FATF) – the body that monitors compliance with anti-terrorism and anti-money laundering regulations – has given the country until June to enact the legislation.
At its plenary meeting late in February this year, the FATF decided not to publicly rebuke South Africa for failure to sign the bill into law and deferred its decision to issue a public statement on South Africa’s compliance with standards against money laundering and terrorist funding until its next meeting in June.
“Pressure is mounting on South Africa to enact the bill before the June 2017 meeting,” said Kirsten Serrurier, Banking and Financial Services Regulatory lawyer at Bowmans.
“As the task force has already raised concerns about enacting the FIC Bill there is some pressure to expedite the enactment of the bill before that meeting,” she said.
The FIC bill seeks to place greater scrutiny on the affairs of politically influential people. It is crucial that South Africa sign the bill into law to comply with international regulations.
“Failure to do so could erode the credibility of South Africa’s financial regulatory system and result in increased transaction costs,” Serrurier said.
“However, despite being passed unanimously, the bill has not been without controversy. The enhanced scrutiny it requires from financial institutions in South Africa includes reasonably establishing the source of wealth and funds of clients, procuring the approval of senior management for the establishment of business relationships and continually monitoring those relationships,” she added.
In November last year, Zuma sent the FIC Bill back to Parliament due to concerns about its constitutionality, specifically over a provision that pertained to warrantless searches.
Parliament’s standing committee on finance held one more round of public hearings in January this year to address the concerns raised by Zuma and other stakeholders, including the Progressive Professionals Forum led by Mzwanele Manyi. The committee, under the chairpersonship of Yunus Carrim, passed the bill on Tuesday February 21.
According to independent legal opinions obtained during the review process of the bill the warrantless searches provision was indeed constitutional, but National Treasury nevertheless revisited the bill and proposed amendments to tighten restrictions on warrantless searches.
“The amendments now clarify that warrantless searches are for the purposes of compliance only and are not permitted in the course of criminal investigations,” Serrurier said.
She emphasised that the FIC Bill is important in bolstering the fight against global financial crime and improving the integrity of South Africa’s banking system. “With only two months to go before the Financial Action Task Team meets, it is to be hoped that the bill’s signing into law is imminent.”
Meanwhile, the Council for the Advancement of the South African Constitution has written to Zuma, asking him to sign the bill immediately, BusinessLive reported on Thursday.
The organisation further said it would approach the Constitutional Court to “force the president’s hand”.
According to BusinessLive, Corruption Watch said it would follow suit if the bill is not ratified in due course.Read Fin24's top stories trending on Twitter: Fin24’s top stories