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Zuma signs once-controversial financial intelligence bill into law

Xinhua, April 29, 2017 Adjust font size:

South African President Jacob Zuma has signed the once-controversial Financial Intelligence Centre Amendment (FICA) bill into law, the Presidency said on Saturday.

The FICA amends the Financial Intelligence Centre Act 2001, which, along with other related acts, aims to combat money laundering and the financing of terrorism.

These amendments further strengthen the transparency and integrity of the South African financial system in its objectives to combat financial crimes, which include tax evasion, money laundering and the financing of terrorism and illicit financial flows.

The amendments also make it harder for persons who are involved in illegitimate activities or tax evasion to hide behind legal entities like shell companies and trusts.

In 2016, Parliament passed the FICA, but Zuma rejected to sign it into law, saying certain provisions of the Bill did not pass constitutional muster.

The president then specifically raised concern with the provisions of the Bill relating to warrantless searches, which according to him, fell short of the constitutional standard required for the provision not to unjustifiably limit the right to privacy.

Now the Bill has been adjusted to include a provision to safeguard information in line with the Protection of Personal Information.

The Bill also include measures that require the identification of beneficial owners to prevent natural persons from misusing legal entities for nefarious purposes like evading tax.

The Bill, among others, provides for the implementation of the United Nations Security Council Resolutions relating to the freezing of assets in relation to persons associated with terrorism; and for the adoption of a risk based approach in the identification and assessment of money laundering and terrorist financing risks.

"The President is now satisfied that the Act (FICA) addresses the constitutional concerns he had raised about warrantless searches," the Presidency said in a statement.

"The Amendment Act sends a strong message about South Africa's commitment to combating financial crime, protecting the integrity of our financial system and our tax base, and remaining part of the global financial system," presidential spokesperson Bongani Ngqulunga said.

It further demonstrates South Africa's membership commitments to the Financial Action Task Force (FATF) and United Nations, he said.

The FATF is an inter-governmental body developing and promoting policies to combat money laundering and terrorist financing. Endit