The FIC Act is one of three Acts which work together to combat and criminalise money laundering, the financing of acts of terrorism, making the country safer for all citizens.
The Prevention of Organised Crime Act, 1998 (Act 121 of 1998) (POCA) focuses on combating organised crime and prohibiting activities relating to racketeering and money laundering. Key to the Protection of Constitutional Democracy against Terrorist and Related Activities Act, 2004 (Act 33 of 2004) (POCDATARA Act) is the criminalisation of terrorist financing activities and the freezing of assets that may be used to support the execution of terrorist activities. Focusing on the business of crime, measures introduced by the FIC Act enables identifying proceeds of crime, combating money laundering and terrorist financing.
The FIC, South Africa's financial intelligence unit
The Financial Intelligence Centre (FIC) was established in 2003 following the promulgation of the Financial Intelligence Centre Act, 2001 (Act 38 of 2001) as South Africa's financial intelligence unit.
As such, the FIC is the only entity authorised to receive transaction and other related data from financial and non-financial institutions. The FIC uses this information for conducting analysis and developing financial intelligence. The financial intelligence reports it produces are requested by or referred to the competent authorities including law enforcement and prosecutorial authorities for them to use in their investigations and applications for forfeiture of criminal assets.
The FIC does not itself conduct investigations nor does it prosecute matters in a court of law.
The FIC is located outside the public service but within the public administration as envisaged in section 195 of the South African Constitution. In terms of the Public Finance Management Act, 1999 (Act 1 of 1999), the FIC is a Schedule 3A public entity, which reports to the Minister of Finance and to Parliament.
FIC Act Amendments
Since 2003, the FIC Act has twice undergone amendments. Legislative changes implemented in 2010 saw the enactment of the requirement for accountable and reporting institutions to submit cash threshold reports. Also, implemented was the authorisation of supervisory bodies to conduct inspections and apply sanctions, where they found non-compliance with the FIC Act. Simultaneously, also established, was a board to hear appeals against the decisions of the FIC or supervisory bodies. Financial Intelligence Centre Amendment Act, 2008 .
In 2017 the second tranche of amendments to the FIC Act, which further entrenched transparency, traceability and accountability in the financial system. Among the changes to the regulations were:
Implementation of a risk-based approach to customer due diligence, which relied on institutions determining the risks that the customer posed to the institution and its products in terms of money laundering and terrorist financing. Based on this the institutions are able to apply lighter or heavier touch customer verification and identification measures
Implementation of resolutions of the United Nations Security Council
Financial Intelligence Centre Amendment Act, 2017.