By Linda Ensor
The bid by the Financial Intelligence Centre (FIC) to tighten the regulation of the financial services and other sectors has met with a chorus of objections.
Banks, short- and long-term insurers, the auditing profession, lawyers, estate agents, accountants and casinos have expressed grave concern about aspects of the Financial Intelligence Centre Amendment Bill, which is the subject of public hearings by Parliament’s finance committee.
The aim of the bill is to strengthen the enforcement and regulatory powers of the FIC, which was established to track suspicious transactions, and combat money-laundering and the financing of terrorist activities. But business is critical of the proposals for concentrating power within the FIC.
The proposed administrative penalties for non-compliance, of up to a maximum of R10m for natural persons or R50m for legal persons, in addition to criminal sanctions, were criticised as too onerous.
A clause that raised objections across the board was one giving all directives, orders or determinations issued by the FIC the status of a law without their being subjected to scrutiny by Parliament and without the obligation to consult.
Many submissions said this was unconstitutional.
Casino Association of SA CE Derek Auret said the provisions had “the effect of transforming the FIC and supervisory bodies (into) legislator, judge, jury and executioner”.
In his submission, Banking Association of SA CEO Cas Coovadia said the bill seemed to be creating a “super-regulator” over the existing supervisory bodies. Inevitably, he said, the increased cost of compliance with all the laws and regulations and the multiplicity of registration requirements for accountable institutions would have to be borne by consumers.
Absa group general counsel Johannes Gouws said: “The bill in its current form does not aim to combat crime; it simply augments compliance obligations.”
The Reserve Bank and the registrar of banks were concerned about “the extent to which supervisory bodies may be exposed to liability under the amendment bill”.