financial intelligence centre
REPUBLIC OF SOUTH AFRICA
Synopsis of Financial
Intelligence Centre
Amendment Bill and
Centre’s views on
implementation
6 MAY 2008
Tel: (012) 309 9200
Fax: (012) 309 9483
www.fic.gov.za
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 1 – Definitions
Amends definitions and introduces new definitions
consequence of other amendments effected by the Bill
as
New concept of bearer negotiable instrument introduced in
accordance with international standards which require measures
to detect physical cross-border transportation of currency and
bearer negotiable instruments (Special Recommendation IX of the
FATF)
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 2 – Application of the Act when in conflict with other laws
Interpretational aid in case of conflict between principal Act and
any other law, other than the Constitution – provisions of the
principal Act will prevail.
This applies only with regard to matters that are dealt with in the
principal Act.
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 3 and 4 – Centre’s Objectives and Functions
Extends objectives and functions of the Centre in relation to
supervision and enforcement of compliance with the
provisions of the principal Act
provision of information collected by the Centre
supervisory bodies
to
Makes it clear that functions concerning supervision and
enforcement of compliance with the provisions of the principal
Act are to be performed in relation to institutions that are
not regulated or supervised or where supervisory bodies do not
supervise or enforce compliance with these provisions
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 5 and 6 – Counter-Money Laundering Advisory Council
Change of name to the Money Laundering Advisory Council –
Counter-Money Laundering Advisory Council
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 7 – Centre’s access to records
Amends section 26 of the principal Act to distinguish the
proceeding in terms of this section relating to reports made in
terms of section from the new inspection proceedings provided
for in the Bill
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 8 and 24 – Conveyance of cash to or from the Republic
Amends section 30 of the principal Act to include the reporting on
the conveyance of bearer negotiable instruments in the
requirement to report the conveyance of cash in excess of a
prescribed threshold to or from the Republic
This will bring this provision in line with the current FATF
Recommendations
Amends section 70 of the principal Act consequentially to add the
words “or bearer negotiable instruments” wherever the word
“cash” occurs
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 9 – Intervention by the Centre
Effects a technical amendment to section 34 of the principal Act
by updating a reference to repealed legislation
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 10 and 11 – Disclosure of information
Amends sections 36 and 40 respectively to improve the
provisions concerning the sharing of compliance related
information among the Centre, supervisory bodies and law
enforcement agencies
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 12 – Directives (Section 43A)
Introduces a new provision that will enable the Centre and
supervisory bodies to issue directives
Directives may deal with application of the principal Act by
accountable institutions or categories of accountable institutions
Directives may require specific accountable institutions or
categories of accountable institutions to:
provide information, reports or statistical returns
cease any conduct in contravention of the principal Act
perform acts necessary to remedy non-compliance with the
principal Act
perform acts necessary to meet any obligation imposed by
the principal Act
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 12 – Registration by accountable institutions and reporting
institutions (Section 43B)
Introduces a new provision that will require every accountable
institution and every reporting institution to register with the
Centre
This will enable the Centre to obtain improved information of the
number of institutions that fall within the ambit of the principal Act
and details about those institutions such as the type of business
being conducted and the physical address
The registration process does not amount to a licensing provision
and accordingly it will not present any bar to an institution from
carrying on the business of an accountable institution or
reporting institution
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 13 – Responsibility for supervision of accountable institutions
Amends section 45 of the principal Act in a number of respects:
Expressly adds the responsibility to supervise compliance
with the principal Act to the functions of all supervisory
bodies
Provides supervisory bodies with a range of powers, in
addition to existing powers they may have in terms of other
legislation:
to conduct inspections in relation to compliance
with the principal Act
to impose conditions to qualify for licenses etc.
to take a person’s involvement in money laundering
or terrorist related activities into account in respect
of “fit and proper” tests
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Inspections (Sections 45A and 45B)
Introduces new provisions to enable the Centre and supervisory
bodies to appoint inspectors and to conduct inspections in
respect of compliance with the provisions of the principal Act
Introduces powers that may be exercised during an inspection
e.g:
directing a person to appear for questioning
entering and inspecting the premises where an institution or
person conducts business
using a computer system on the premises to access records
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Administrative sanctions(Section 45C)
Introduces a range of administrative penalties that may be
applied in relation failures to comply with the principal Act
Include one or a combination of the following:
a caution not to repeat a particular conduct
a reprimand
a directive to take a remedial or particular action or make any
arrangements or cease a particular action
restriction or suspension of certain specified business
activities
a monetary penalty not exceeding R10 000 000 in respect of
natural persons and R50 000 000 in respect of legal persons
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Appeal (Sections 45D and 45E)
Provides for an appeal process including the establishment of a
Board of Appeal to consider the actions taken by the Centre and
supervisory bodies
Board consists of as many persons as the Minister of Finance
considers necessary, with the chairperson being an advocate or
attorney with at least ten years experience
Centre is charged with the provision of administrative support to
the Board
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Application to Court (Section 45F)
Empowers Centre and supervisory bodies to
institute proceedings in the High Court compelling an
accountable institution to comply with any provision of the
principal Act or to cease contravening a provision of the Act
apply to a court for an order restraining an accountable
institution from continuing business pending an application
to court
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 15 to 23 – Offences
Create new offences and amend existing offence provisions of
the principal Act to provide for contraventions of new provisions
and for offences that have been omitted previously
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 25 – Amendment of Index
Effects a consequential amendment to the Index of the principal
Act
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
SYNOPSIS OF THE FINANCIAL
INTELLIGENCE CENTRE AMENDMENT BILL
Clause 26 – Amendment of Long Title
Effects consequential amendments to the Long Title of the
principal Act
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
INSPECTORATE
Types of inspections:
Routine inspections / compliance examinations
Thematic inspections
Inspections in respect of specific concerns
Routine and thematic inspections to be undertaken in terms of
inspection plans to be developed by Inspectorate
Inspection manuals to be developed for different types of
inspections
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
INSPECTORATE
Preparation includes:
inspection manuals
budgeting
recruitment
training
Systems to identify sectors and institutions for inspection plans
Interaction with supervisory bodies
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
INSPECTORATE
Inspectorate section within Centre’s structure
Start with small number of inspectors (± 3 inspectors) and
increase capacity incrementally over five years
Initially draw on part-time availability of existing staff
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
INSPECTORATE
Envisaged timeframes
Process development (including inspection manuals etc.)
currently underway
Enhancing capacity of existing staff currently underway
Budgeting currently underway
Recruitment starting May 2009
Training starting June 2009
Ready to commence with inspections from August 2009
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
ADMINISTRATIVE SANCTIONS
Internal decision making processes
Capacity for vetting of inspection process, review relevant
information and advise on appropriate action
Processes to support actions of supervisory bodies
Guidelines and training on effective use of sanctions
Processes for monitoring effect of sanctions
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
ADMINISTRATIVE SANCTIONS
Envisaged timeframes
Process development currently underway
Enhancing capacity of existing staff currently underway
Training starting May 2009
Ready to commence from August 2009
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
APPEAL BOARD
Infrastructure for Board and secretariat
Budgeting
Identify candidates for Board
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
APPEAL BOARD
Process appointments for Minister
Internal structure for secretariat
Recruit staff for secretariat
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
APPEAL BOARD
Envisaged timeframes
Process development currently underway
Infrastructure planning currently underway
Budgeting currently underway
Recruitment for secretariat starting May 2009
Training for secretariat starting June 2009
Identify and appoint members starting May 2009
Ready to commence from August 2009
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
IMPLEMENTATION OF FIC ACT
AMENDMENTS
OTHER PROCESSES
Schedule of supervisory bodies
Update references
Remove inappropriate bodies
Include new/additional bodies
Co-ordination / demarcation between supervisors
MOUs / other formal arrangements
Interaction with other authorities
Networks / gateways for sharing of information
financial intelligence centre
REPUBLIC OF SOUTH AFRICA
END
CONTACT DETAILS
NATIONAL TREASURY
Nkosana Mashiya
Jo-Ann Ferreira
Chief Director: Economic Policy and International Financial
Chief Director: Public Entities Governance Unit
Relations
[email protected]
[email protected]
Tel: (012) 315 5263
Tel: (012) 315 5825
Raadhika Sookoo
Director: Economic Policy and International Financial
Relations
[email protected]
Tel: (012) 315 5671
FINANCIAL INTELLIGENCE CENTRE
Murray Michell
Director: Financial Intelligence Centre
[email protected]
Tel: (012) 309 9210
Poovindree Naidoo
Senior Legal and Policy Advisor
[email protected]
Tel: (012) 309 9423
Pieter Smit
Senior Manager: Legal and Policy
[email protected]
Tel: (012) 309 9215