Tuesday, 2 May 2017: The Financial Intelligence Centre (FIC) is pleased that the Financial Intelligence Centre Amendment Act has been signed by the President.
The amendments will make significant improvements to the Financial Intelligence Centre Act, 2001 (FIC Act). They will strengthen the FIC’s ability to produce high quality financial intelligence and to share this with a wider range of government departments and agencies in the pursuit of combating financial crimes such as money laundering and terrorist financing while protecting the confidentiality of personal information. The amendments also introduce new concepts to the FIC Act which are designed to further safeguard South Africa’s financial system against abuse and illicit activities. These concepts include:
* The introduction of a risk-based approach to the implementation of the Act, which will enable institutions and businesses to use more efficient means to comply with their legal obligations and, at the same time, to make it easier for their customers to do business with them;
* A change in the customer due diligence measures, which will require that institutions understand their relationships with their customers rather than only identifying their customers, as is required currently;
* Having to identify the beneficial owners of corporate customers, which implies knowing the real, natural persons who benefit from the business done by financial and other institutions with companies, trusts and other similar entities; and
* Managing relationships with prominent persons.
The commencement date(s) for the Amendment Act are yet to be determined by the Minister of Finance. Commencement of some of the provisions of the Amendment Act (in particular those that deal with the various customer due diligence requirements and institutions’ implementation of internal compliance programmes) will require simultaneous changes to the current Money Laundering and Terrorist Financing Control Regulations and the Exemptions under the FIC Act that have been made by the Minister of Finance previously. Developing these changes and determining an appropriate commencement date for these provisions will require extensive consultation with government departments, affected industry sectors and supervisory bodies.
The FIC welcomes the positive impact the improvements to the FIC Act will have for all supervisory bodies, as well as the National Prosecuting Authority, the South African Police Service, the State Security Agency, and the South African Revenue Service. Collectively, all of these bodies have a significant responsibility in combating financial crime and safeguarding South Africa’s financial system from being abused for criminality and illicit purposes.