The powers of the Financial Intelligence Centre (FIC) will be considerably enhanced by a bill now before parliament, which aims to strengthen the country’s regime to combat money laundering and the financing of terrorism.
The main aim of the bill is to tighten the rules of beneficial ownership as they apply to trusts and companies, and to regulate the controllers of non-profit organisations (NPOs).
The Treasury released the omnibus General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill on Monday. The bill amends the Trust Property Control Act, the Non-Profit Organisations Act, the FIC Act, the Companies Act and the Financial Sector Regulation Act with a key aim being to ensure the disclosure of the beneficial owners and ultimate controllers of trusts, companies and NPOs.
The bill implements the recommendations of the Financial Action Task Force, the international body that sets standards for the combating of money laundering and financing of terrorism.
Its definition of beneficial ownership is that contained in the FIC Act.
The functions of the FIC are expanded to include the provision of forensic information in the results of the analyses it produces so that it can be used as expert testimony in court cases. This forensic evidence will relate to the flow of financial transactions and the links between people and between people and property. Its powers are also broadened to allow for requests for information held by any national department or the investigative division of the auditor-general.
The memorandum to the bill states it is necessary for the FIC to have access to this information so that it has “access to a sufficiently wide range of information that is held in the public sector to perform its functions effectively”.
The FIC Act will be amended to distinguish between domestic and foreign politically exposed people, as well as politically influential people. The obligations of accountable institutions are also expanded.
The supervisory bodies for the estate agency and gambling centres will have to comply with the provisions of the FIC Act.
Trustees will have to keep information on beneficial owners of trusts — that is those who directly or indirectly ultimately own them or exercise effective control over their administration — and the Master will have to maintain a register relating to the beneficial ownership of trusts.
Grounds are provided for the disqualification of trustees and for offences in terms of the Trust Property Control Act. Trustees will be obliged to disclose to accountable institutions defined in the FIC Act that they are acting as a trustee in their transactions and business relationships.
The bill outlines the basis on which trustees can be disqualified.
The registration of NPOs, including foreign ones, will be mandatory instead of voluntary, as they are now. They will have to submit prescribed information about their office-bearers, control structure, governance, management, administration and operators to the director of the Non-Profit Organisations Directorate for inclusion in a register.
The Companies Act is amended to include the definition of beneficial owner and to provide for a mechanism through which the Companies and Intellectual Property Commission (CIPC) can keep accurate and updated beneficial ownership information. Companies will be required to keep a record of a natural person who owns or controls the company as a beneficial owner and will have to file a record of the person with the CIPC. The grounds for disqualification as a director of a company are expanded to include offences related to money laundering, terrorism financing or the proliferation of financing.
The Financial Sector Regulation Act is amended to provide a definition of a beneficial owner and to provide a mechanism through which financial sector regulators can require financial institutions to identify and verify their beneficial owners and to provide information about them.
Financial sector regulators will be empowered to take action against beneficial owners who contravene or are likely to contravene a financial sector law.
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