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The bill has been sitting on the president’s desk for several months despite its importance in ensuring that South Africa’s system of financial regulation complies with its international obligations.
The bill will impose more onerous obligations on banks to know their clients and in particular politically exposed persons such as politicians‚ government officials and directors of companies contracting with government.
“I have given consideration to the bill in its entirety and certain submissions regarding the constitutionality of the bill‚” Zuma said in a statement on Tuesday.
“After consideration of the bill and having applied my mind to it‚ I am of the view that certain provisions of the bill do not pass constitutional muster.”
Critics of Zuma’s long delay in promulgating the law have claimed he is trying to protect those benefiting from corruption‚ such as the Guptas.
The Financial Intelligence Centre Act was the instrument behind the decision of four major banks to terminate their banking relationships with Gupta-owned companies.
The Presidency said Zuma was aware the purpose to be served by the bill was important and pressing but provisions needed to be in line with the Constitution.
Zuma had raised concerns about provisions in the bill relating to “warrantless searches”‚ which according to him “fell short of the constitutional standard required for the provision not to unjustifiably limit the right to privacy”.
The Council for the Advancement of the South African Constitution wrote to Zuma warning him to sign the amendment bill‚ failing which he risked court action.
Casac launched its legal action earlier this month.
Zuma has been accused of breaking his oath of office by not signing the FIC Amendment Bill.
Parliament passed the bill in May‚ but it is now waiting for Zuma’s signature.
The bill requires banks to perform enhanced due diligence on the “politically exposed”‚ in line with international obligations.
But it has aroused ire in some ANC quarters and the Presidency said earlier in August that the delay in signing the bill was because the Progressive Professionals Forum (PPF)‚ a lobby group established by former government spokesman Mzwanele (Jimmy) Manyi‚ had lodged an objection over its constitutionality.
- TMG Digital/BusinessLive