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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 - PowerPoint PPT Presentation
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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
Amends definitions and introduces new definitions as consequence of other amendments effected by the Bill
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)
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 1 – Definitions
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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.
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 2 – Application of the Act when in conflict with other laws
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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 to supervisory bodies
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 3 and 4 – Centre’s Objectives and Functions
financial intelligence centre REPUBLIC OF SOUTH AFRICA
Change of name to the Money Laundering Advisory Council –Counter-Money Laundering Advisory Council
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 5 and 6 – Counter-Money Laundering Advisory Council
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 7 – Centre’s access to records
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 8 and 24 – Conveyance of cash to or from the Republic
financial intelligence centre REPUBLIC OF SOUTH AFRICA
Effects a technical amendment to section 34 of the principal Act by updating a reference to repealed legislation
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 9 – Intervention by the Centre
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 10 and 11 – Disclosure of information
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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 orcategories 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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 12 – Directives (Section 43A)
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 12 – Registration by accountable institutions and reporting institutions (Section 43B)
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 13 – Responsibility for supervision of accountable institutions
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Inspections (Sections 45A and 45B)
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Administrative sanctions(Section 45C)
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Appeal (Sections 45D and 45E)
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 14 – Application to Court (Section 45F)
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clauses 15 to 23 – Offences
financial intelligence centre REPUBLIC OF SOUTH AFRICA
Effects a consequential amendment to the Index of the principal Act
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 25 – Amendment of Index
financial intelligence centre REPUBLIC OF SOUTH AFRICA
Effects consequential amendments to the Long Title of the principal Act
SYNOPSIS OF THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT BILL
Clause 26 – Amendment of Long Title
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
INSPECTORATE
Preparation includes:
inspection manuals
budgeting
recruitment
training
Systems to identify sectors and institutions for inspection plans
Interaction with supervisory bodies
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
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
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
ADMINISTRATIVE SANCTIONS
IMPLEMENTATION OF FIC ACT AMENDMENTS
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
APPEAL BOARD
Infrastructure for Board and secretariat
Budgeting
Identify candidates for Board
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
APPEAL BOARD
Process appointments for Minister
Internal structure for secretariat
Recruit staff for secretariat
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
APPEAL BOARD
IMPLEMENTATION OF FIC ACT AMENDMENTS
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
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
IMPLEMENTATION OF FIC ACT AMENDMENTS
financial intelligence centre REPUBLIC OF SOUTH AFRICA
ENDCONTACT DETAILS
NATIONAL TREASURY
Nkosana MashiyaChief Director: Economic Policy and International Financial
Tel: (012) 315 5825
Jo-Ann FerreiraChief Director: Public Entities Governance Unit
[email protected]: (012) 315 5263
Raadhika SookooDirector: Economic Policy and International Financial
Tel: (012) 315 5671FINANCIAL INTELLIGENCE CENTRE
Murray MichellDirector: Financial Intelligence Centre
[email protected]: (012) 309 9210
Pieter SmitSenior Manager: Legal and Policy
[email protected]: (012) 309 9215
Poovindree NaidooSenior Legal and Policy [email protected]
Tel: (012) 309 9423