Madam Speaker, hon members, in 2001 Parliament passed the Financial Intelligence Centre Act. This Act is meant to assist the law enforcement agencies in their fight against organised crime and protect our financial system from being contaminated with the proceeds of crime. This was a very important decision indeed, as it made it difficult for criminals to launder their dirty money through our financial system.
Accountable institutions like banks are required by the law to report suspicious transactions to the Financial Intelligence Centre. The law enforcement agencies are then expected to use that information to undertake further investigations on those suspicious transactions.
However, we need to point out that this framework had its own shortcomings. Part of the problem was that the enforcement measures were inadequate and inappropriate in certain circumstances. The Financial Action Task Force on Money-laundering, an international body, commented on the supervision of compliance regarding the principal Act during an evaluation of South Africa in 2003.
It recommended that South Africa should give adequate powers to a supervisory body to enable them to enforce the provisions of the principal Act. The problem with the principal Act was that it provided for enforcement through criminal sanctions only. That posed serious challenges because some of the offences were merely of a regulatory nature.
The Financial Intelligence Centre could not enforce compliance through administrative penalties or sanctions as the principal Act had not conferred such powers on the centre. An effective regulator must possess the power to enforce compliance through administrative sanctions. This is an established international practice. Hence the Financial Action Task Force on Money-laundering recommended that South Africa should pay attention to this matter.
The Financial Intelligence Centre must have powers to undertake inspections, issue directives, request information, impose administrative sanctions and institute proceedings in the High court. This Bill addresses these shortcomings.
The Financial Intelligence Centre can approach the High Court to compel an accountable institution to comply with any provisions of the principal Act or stop contravening the Act. The centre can also restrain an accountable institution from conducting business pending an application in court.
There are certain interested parties who perceived the powers conferred on the centre as unconstitutional, especially those dealing with administrative sanctions. We sought legal advice on this matter when we were dealing with the Pension Fund Amendment Bill in 2007. There is no substance in this argument. It is an established international practice to confer such powers to a supervisory body. The hon Sibidla will elaborate on the enforcement provisions contained in the Bill in greater detail.
There are those who contest that certain provisions of the Bill are not consistent with the Promotion of Administrative Justice Act. There is no substance to this argument also. The provisions in this Bill regarding the appeal processes are fair and just.
Firstly, an institution or person may appeal against a decision of the centre to the appeal board. Secondly, the decision of the appeal board may be taken on appeal to the High Court as if it were a decision of a magistrate in a civil matter.
Let me turn to another matter that sparked heated debates, that is the consultation process. There are some interested parties who are of the view that there was not sufficient consultation on this Bill. The information presented to us by the National Treasury clearly indicates that there was sufficient consultation.
A consultation document was circulated for comment in November 2006 to all supervisory bodies and representatives serving on the Money-laundering Advisory Council for comment.
The document was also placed on the Financial Intelligence Centre's website inviting interested parties to comment by 26 January 2007. The submissions were considered and incorporated into the draft Bill. We are satisfied that there was adequate consultation during the drafting of this Bill given the evidence presented before us.
This Bill enhances the sharing of information and co-operation between the centre, supervisory bodies and law enforcement agencies. The sharing of information and co-operation are critical to the successful implementation of this Bill, and ultimately, the prosecution of criminals.
We need to deal a fatal blow to organised crime. Therefore, we appeal to our law enforcement agencies to build investigation and analytical capacity among their members. The ANC supports the Bill. [Applause.]