Those pressuring President Jacob Zuma to decline a bill that paves way for the bank accounts and trusts of politically exposed individuals to be scrutinised must watch-out: the banking community will do so anyway, FirstRand chairman Laurie Dippenaar warns.
“It’s very simple … if we suddenly had to pass a bill that the Receiver of Revenue has to audit the tax returns of high-net worth individuals and the high-net worth individuals started pulling strings to avoid it, does it make any difference?”
The South African Revenue Service (SARS) could so anyway, Dippenaar said. “So we [financial institutions] can audit politically exposed persons or delve into their domestic activities without any act … in fact, if they don’t pass the bill we’ll probably do it with renewed vigour and enthusiasm,” he added.
The president has come under fire from various groups for his alleged reluctance to approve an amendment to the Financial Intelligence Centre Act, which will strengthen capacity to fight money laundering, the financing of terrorism and corruption. The Financial Intelligence Centre Amendment Bill was passed by Parliament in May.
This week, the Council for the Advancement of the South African Constitution (Casac) threatened court action if Zuma stalled further.
Read also ; Council charges Pres. Zuma to sign Financial Intelligence Centre bill into law or face court action.
Enacting the bill would align SA with international standards to combat financial crime, and fulfil its obligations as a member of the Financial Action Task Force, which was established more than two decades ago.
SA has been a member for the past 13 years but it risked being kicked out if the bill was not signed, Dippenaar said. “[This] makes our relationship with other correspondents in other countries very, very difficult.” He said the upside of not passing the bill was “nil”.
Noncompliance could result in severing international trade and investment links, and heavy fines being imposed by overseas regulators on local financial institutions.
Politicians and business people who serve on the boards of state-owned companies are considered to be politically exposed.
A furious Dippenaar spoke his mind as a panelist in a debate hosted by the Gordon Institute of Business Science ethics and governance think tank. The discussion was themed Driving Trust — the new competitive differentiator for business, and also featured former finance minister Nhlanhla Nene, Woolworths SA CEO Zyda Rylands and Lynn Paine, a former Harvard Business School professor.
Dippenaar is the latest in a string of high-profile individuals including AngloGold Ashanti chairperson Sipho Pityana who have vented their frustration with the current administration. Another former finance minister, Trevor Manuel, has also accused Zuma of breaking his oath by not signing the bill.
Read also ; I will Mobilise Public if Zuma fails to step down – Sipho Pityana.