Governments from all over the world united in the fight to combat money laundering and crime.
The FATF (Financial Action Task Force) was therefore formed in 1989 by the World’s largest countries known as the G7 countries.
South Africa joined the FATF in 2003 and was compelled by the FATF to implement an effective money laundering control legislation. This membership has led to the development of the Financial Intelligence Centre Act.
Every five years, each member undergoes a review known as a mutual evaluation report, assessing its level of compliance with the Recommendations.
In the 2014 report, South Africa was “crucified” for some aspects of FICA and the underlying tools used to implement it.
South Africa was scheduled for its next evaluation in October or November 2019 and this time the country was assessed against the revised 2012 Recommendations.
The 2014 report has led to the FIC amendment act of 2017 which was published and signed by the Finance Minister of South Africa, Malusi Gigaba, in 2017.
The Financial Intelligence Centre Amendment Act, 2017 (FIC Amendment Act) came into effect on 2 October 2017 and has forced FSPs to move to a risk-based (rather than a rules-based) approach. “Penalties for non-compliance have been delayed allowing sufficient time to implement Fica correctly. But this is only for the amendments and previous FIC requirements must still be followed to.
From a South African perspective, the Financial Intelligence Centre Act (FICA), the Prevention of Organised Crime Act (POCA) and the Promotion of Access to Information Act (PAIA) currently support the goals and standards set by the FATF.
FICA and POCA have to be read together. POCATARA was added in 2004.
Let us look at each of these acts for a better understanding: