Gordhan blamed for Fica shortcomings

NPA boss says fight against money-laundering has been hampered

NATIONAL Director of Public Prosecutions Shaun Abrahams has indirectly accused former finance minister Pravin Gordhan of hampering the fight against money laundering by failing to establish a special advisory council provided for in the previous version of the Financial Intelligence Centre Act (Fica).

At a media briefing by Justice Minister Michael Masutha, ahead of his department’s budget vote, both the minister and Abrahams said prosecution of financial crimes had suffered because successive finance ministers never set up the council.

Masutha said the body was critical to ensure that illicit financial dealings were not merely identified, but actually referred to law enforcement bodies for investigation. It was of concern that the amended version of the act did away with the council, he added, and suggested that it should be reintroduced via regulations. “Since the council was envisioned in 2002 in legislation, it has not come to life, and that was a fundamental mistake. The onus was on the ministers of finance during the entire period of 15 years while Fica existed for the council to come to life because they were responsible for the administration.”

Abrahams said: “The challenges that we face today as a country in our ability to combat money laundering, illicit financial flows and terror financing is as a direct result – and I say this respectfully – of various finance ministers failing to constitute or have constituted the Counter Money-Laundering Advisory Council.”

He said Fica had placed a strict responsibility on the finance minister to appoint a chairperson to the council, so that the chairperson could formally constitute the council. The council was meant to include the directors-general of finance and justice, the commissioner of Sars and the governor of the Reserve Bank.

The briefing went to other subjects, but Abrahams interrupted Masutha to say Gordhan was responsible for the fact that a bid to hold the council’s inaugural meeting in January had failed because he did not abide by the regulations governing it. These determined that the meeting needed to be chaired by one of the members, but Gordhan had asked the then deputy minister of finance, Mcebisi Jonas, to chair.

Masutha said he had brought up the subject with Gordhan’s successor Malusi Gigaba. “We had a conversation with the new minister of finance to try to improve co-operation in this regard. We will be approaching the cabinet, possibly collectively, with proposals to remedy the weaknesses that have bedevilled the functioning of the Fica system.”

Abrahams added: “Every effort must be made to retain this council, otherwise we are going to continue to face the challenges that we have been facing.”

PROSECUTION OF FINANCIAL CRIMES SUFFERED BECAUSE A COUNCIL WAS NEVER SET UP