President Jacob Zuma has referred the Financial Intelligence Centre Amendment (Fica) Bill back to Parliament after a five-month delay, saying its provision for searches without a warrant is unconstitutional.
His referral on Tuesday came within a whisker of a court deadline for his submission of a replying affidavit in the application by the Council for the Advancement of the South African Constitution to force him to decide one way or another on the bill.
The referral also comes about 10 days before Parliament rises for a two-month recess.
The amendments are necessary for SA to meet its international obligations to the Financial Action Task Force, which combats money laundering and terrorist financing. The delay means SA will not meet the task force’s February deadline to introduce tighter monitoring of financial transactions. SA now risks being put on a watch list.
Finance committee chairman Yunus Carrim said the bill could not be finalised as there were only four parliamentary working days left in 2016.
The bill will impose more onerous obligations on banks to know their clients and in particular politically influential persons such as politicians, government officials and directors of companies that are contracting with the government.
The bill’s clause on warrants attempted to address a Constitutional Court judgment that a section of the Financial Intelligence Centre Act was unconstitutional as it allowed for a centre inspector to conduct inspections of private or business premises without a warrant.
Banking Association SA MD Cas Coovadia said the association had been satisfied that the restrictions on warrantless searches were constitutional.
The act’s obligation on institutions to report suspicious transactions was the mechanism behind four banks’ termination of their relationships with Gupta-owned companies.
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