PPF vows to head to court to challenge FICA

Thembakazi Mnyaka
Thembakazi Mnyaka

Johannesburg - The Progressive Professionals’ Forum (PPF) has promised to go to court to challenge the recent signing of the Financial Intelligence Centre Amendment Act (FICA) by Finance Minister Malusi Gigaba.

PPF national chairperson Tembakazi Mnyaka said the organisation was taken aback when Gigaba signed the piece of legislation.

Gigaba finally signed the contested law, making way for parts of the legislation to come into effect immediately and others at a later stage.

“The PPF is taken aback by the signature of FICA into law by the minister of finance, Mr Gigaba. However, our lawyers are still reading the signed version to ascertain which aspects of the bill have been signed into law and which aspects have been delayed,” Mnyaka said.

“Depending on the contents, the PPF will continue with its commitment to take the act to the Constitutional Court as we still believe that the act remains unconstitutional.”

Mnyaka said the organisation still stood by its previous pronouncement that the Financial Intelligence Centre Advisory Council would give the Financial Intelligence Centre director and banks unfettered and arbitrary unconstitutional powers.

“The PPF hopes that the minister of finance, in signing the act into law, has delayed at least that aspect of the act and that part regarding politically exposed persons. As we suspected, the PPF has, since the signing of the act into operation, been receiving calls from people whose bank accounts have been arbitrarily and without cause closed by our notorious banks,” she said.

The first batch of sections that came into effect immediately when Gigaba signed on Tuesday were those that do not need changes to existing regulations, exemptions or internal systems of institutions to enable compliance.

The second batch of provisions, which will only come into effect on October 2, relate to numerous concepts that are new and would therefore need related regulation and exemption to be changed, as well as staff training for them to be implemented.

Among the new concepts to be effected in October are a longer list of customer due diligence requirements; beneficial ownership, which requires institutions to know and understand the natural persons who ultimately own or exercise control over legal entities or structures; as well as the controversial prominent (influential) persons and politically exposed persons – a term describing someone who has been entrusted with a prominent public function, and who generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold – which requires institutions to manage risks relating to relationships with prominent persons as well as the freezing of assets related to targeted financial sanctions against people identified by the UN Security Council.

The release of the dates for the remaining two batches of provisions of the act will only be announced after October 2. Sections 26a to 26c deal with the freezing of assets in terms of the UN Security Council Resolutions on targeted financial sanctions, and schedule 3a deals with the setting of a monetary value threshold for companies doing business with the state.

Treasury has announced that several exemptions would be withdrawn. The exemptions, 13 in total, relate to a number of sectors, including real estate, gambling and banking. The proposed withdrawal relates to their intended purposes already being included in the amendment act, so keeping them would cause redundancy.

President Jacob Zuma signed the FICA documents last month.

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