Friday 24 November 2017

Masutha and Gigaba in talks on reviving special Fica advisory council

Masutha and Gigaba in talks on reviving special Fica advisory council
(Business Day 05/18/17)
Justice Minister Michael Masutha

Justice Minister Michael Masutha is in talks with Finance Minister Malusi Gigaba over the restoration of the special advisory council which was legislatively provided for under the Financial Intelligence Centre Act (Fica) of 2002 but then abolished under this year’s amendments to the legislation.

The council was never established but Masutha said at a media briefing ahead of his budget vote speech in the National Assembly Thursday that it was "concerning" that the Financial Intelligence Centre Amendment Act did away with the "all important" advisory council.

The minister is trying to get it reincluded in the legislative regime created by the Financial Intelligence Centre Act and its amendments.

"We will possibly be approaching Cabinet collectively with proposals to remedy the weaknesses that have bedevilled the effectiveness of the Fica system," Masutha said.

"The council would serve as an oversight accountability structure in relation to the functioning of the Financial Intelligence Centre and would advise government on its endeavours in the fight against money laundering, illicit financial flows and terror financing," Masutha said.

He said it was a "fundamental mistake" that the council was not constituted when the Financial Intelligence Centre Act was first promulgated in 2002.

The onus was on the ministers of finance over the past 15 years to see that it was established. They were responsible for the administration of the act and the onus was on them to set up the critical institutional arrangements provided for in the act.

The aim of the council was to ensure that law enforcement action was taken on reports submitted to the Financial Intelligence Centre (FIC) when required. The centre itself could not undertake this enforcement.

Head of the National Prosecuting Authority Shaun Abrahams believed the council was critical for SA’s ability to counter money laundering, illicit financial flows and the financing of terrorism.

He also laid the blame for the failure to establish the advisory council on successive finance ministers who were responsible under the act for appointing a chairperson to the council.

The chairperson would constitute the council, which would be made up of the Reserve Bank governor, directors-general of Treasury and the Department of Justice and State Security, the commissioner of the South African Revenue Service, the national police commissioner, the national director of public prosecutions and representatives of the financial sector.

Abrahams said the council would also serve as an accountability structure for the FIC and to advise the finance minister.

The absence of a council, he said, meant the Financial Intelligence Centre had never been held accountable.

"Every effort must be made through regulation to retain this council otherwise we will continue to face the challenges which we have faced over the last few years," Abrahams said.

LINDA ENSOR

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