South Africa seeks new laws to fight terror financing
CAPE TOWN (Reuters) - South Africa's fight against money laundering and terrorism financing needs tough new laws to close regulatory loopholes and give authorities more power to crack down on crime, a top financial official said on Tuesday.
Murray Michell, the head of South Africa's Financial Intelligence Centre (FIC), said draft laws being debated by parliament would also help unclog an overburdened judicial system and streamline oversight.
"What the bill seeks to do is establish an administrative enforcement framework which will enhance supervision and enhance compliance," Michell said.
Laws to combat money laundering and terrorism financing have come under the spotlight since the Sept 11, 2001 attacks on New York and Washington, as investigators try to keep militants from abusing the international financial system to finance attacks, training and communication networks.
Michell said South African authorities had noticed that the existing Financial Intelligence Centre Act had gaps which were compromising these efforts -- especially when it came to acting quickly against violations.
"(This absence has had) a negative effect on the ability to develop the anti-money laundering/terror financing regime as a whole and the key area ... is that of compliance enforcement," Michell said.
He said the new laws would allow the FIC and other supervisory bodies to make inspections, issue directives, impose administrative sanctions and apply for court orders to ban certain suspicious activities.
The laws also propose a range of sanctions including fines of up to 10 million rand ($1.33 million) for individuals and 50 million rand for companies contravening FICA.
Michell said FICA's current provisions made the process of criminal sanctions too lengthy and complex to be effective.
Some critics have expressed concern that the new laws would create regulatory overlaps between the FIC and other supervisory bodies and could give the FIC too much power. The treasury has dismissed the concerns as "misconceptions".
(Reporting by Wendell Roelf; Editing by Caroline Drees)
