We need to strengthen the FICA

28 February 2017

The Financial Intelligence Centre Amendment Bill [B33B-2015] (“The Bill”) is one of the most important “legislative weapons” in the fight against corruption in South Africa.

At the heart of the Bill is the “Gupta clause”, which ensures that “Domestic Prominent Influential Persons”, and family members and known close associates of “Domestic Prominent Influential Persons”, will be subjected to “enhanced” scrutiny by financial institutions in South Africa.

Which includes:

- obtaining senior management approval for establishing business relationships;

- taking reasonable measures to establish the source of wealth and source of funds of clients; and

- conducting enhanced ongoing monitoring of business relationships.

And that is why “Jimmy” Manyi and his band of banker bashers emerged from under a rock to so strongly oppose the Financial Intelligence Centre Amendment Bill.

Whatever the case, we now all know that President Jacob Zuma refused to use his “presidential quill” to sign the Financial Intelligence Centre Amendment Bill into law and instead used Section 79 (1) of the Constitution, 1996 to refer it back to Parliament.

We were told the president recognized that the purpose of the Bill was “important and pressing” but nevertheless thought that the provision dealing with “warrantless searches”, in particular Section 45B (1C), was likely to be unconstitutional.

We took advice from senior counsel who advised that President Jacob Zuma was wrong: the Bill was constitutional, but there would be no harm in “tightening up” provisions dealing with warrantless searches.

Which of course fueled speculation that the Bill had actually been referred back with an ulterior motive: in this case to “defang” the Financial Intelligence Centre.

Whatever the case we have now, considered the president’s reservations and, on advice from senior counsel, we have proposed amendments to the Bill, dealing with “warrantless searches”.

We have made explicit what was implicit and believe that the president will now have no choice but to sign the Financial Intelligence Centre Amendment Bill into law and to “en-fang” the Financial Intelligence Centre.

Which of course brings me back to “Jimmy” Manyi and his band of banker bashers who are strongly opposed to the Financial Intelligence Centre Amendment Bill and who have threatened to take it on review in the Constitutional Court.

Now, if you have any concerns that we are proceeding in the right direction, consider that the person who led the charge against the Bill was none other than “Dr” Danisa Baloyi who: (1) was reportedly fired as a director of the ABSA Group; and (2) was reportedly involved in one of the biggest and most cruel rip-offs of the poor in this country, namely the scandal involving Fidentia Asset Management and the Living Hands Trust.

We need to see “Jimmy” Manyi and his band of banker bashers for what they really are: arsonists, dressed as firefighters, lighting fires, rather than fighting fires in South Africa.

Whatever the case, we still have a long way to go because even if we have the “legislative weapons” in place, we do not have the “institutional weapons” in place to fight corruption in South Africa.

The Financial Intelligence Centre is a small institution, comprising of 213 employees, forced to operate on a small budget of R289 million, and compelled to rely on other institutions, including the Hawks and the National Prosecuting Authority, to bring cases to court in South Africa.

What this means is that despite all the good work being done by the Financial Intelligence Centre, it is a “pea shooter” being used in a “gun fight” in South Africa.

Which means that as soon as we have the “legislative weapons” in place, we need to focus on getting the “institutional weapons” in place to fight corruption in South Africa.

Issued by David Maynier, DA Shadow Minisiter of Finance, 28 February 2017