Deciphering the delay on Fica bill

Precedent and politics come into play, and yet ...

FIVE months after receiving the Financial Intelligence Centre Amendment Bill, President Jacob Zuma has told the nation that after “applying his mind” he has decided to send it back to the National Assembly for reconsideration.

The bill seeks to strengthen regulations that deal with money laundering and illicit financial transactions, bringing the country into line with standards set by the global Financial Action Task Force, of which South Africa is a member.

The FATF is a policymaking body that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

So, as a member, South Africa would be expected to align its own regulations with its objectives and recommendations. This is what the Fica bill is attempting to do.

This reminds me of the saga of the International Criminal Court and President Omar al-Bashir, when South Africa allowed the Sudanese president to slip out of the country and contravened an order from the ICC to arrest him on charges of orchestrating genocide and war crimes in his home country.

Once again, it is worth noting that we are members of the ICC, and joining the body is voluntary. Last month Justice Minister Michael Masutha presented a bill in parliament to repeal South Africa’s membership of the ICC. Bar some kind of miracle, the country will walk away from the ICC.

Membership of the FATF is also voluntary. If the new Fica bill materially deviates from the recommendations of the task force, this could lead to tough questions being asked about our political will and commitment to combating money laundering.

It is worth noting that the president’s decision to send the bill back to parliament follows representations from the Reserve Bank and the National Treasury, and approvals from the National Council of Provinces and the National Assembly.

It is also important to note Zuma’s reasons for sending the bill back to the National Assembly.

He raised concerns about the provisions of the bill relating to warrantless searches, which, according to him, fall short of the constitutional requirement not to unjustifiably limit the right to privacy.

An issue raised by the Progressive Professionals Forum related to “politically exposed persons”. The concern was that people employed by the government, as well as prominent or influential persons, would immediately be rendered “suspects” in the bill, and that would violate their constitutional rights.

By omission, then, it seems the president has accepted the concept of politically exposed persons, given that he has not raised it as a concern. Ironically, the president of the republic tops the list in the bill’s definition of the term.

Does Zuma have a valid concern on the issue of warrantless arrests, though? According to constitutional law expert Professor Shadrack Gutto, he does.

“The Financial Intelligence Centre is a very important institution and the bill is a critical piece of legislation that enables it to carry out its mandate of combating money laundering and illicit financial flows and therefore needs adequate scrutiny.

“The president is empowered by the constitution to consider the bill and if he has any concerns, he is to outline what these are and send it back to the National Assembly for panel-beating, and if he is not satisfied with parliament’s revert, he can refer it to the Constitutional Court for a ruling on whether the bill is compliant with the constitution.”

Asked why the Financial Intelligence Centre would want the right to carry out warrantless searches, Gutto said: “The Financial Intelligence Centre may be concerned that in certain cases getting a warrant may take too long, or the suspected criminals may be informed of the imminent arrest and perhaps destroy whatever evidence they have.

“But that’s not a good enough reason. People have the right to privacy, and our law has clear guidelines on how such searches need to be carried out.

“The police have a responsibility under section 205 [of the constitution] in dealing with questions of preventing, combating and investigation crime and they are required to get a warrant. So we cannot have a body that can do whatever it likes because then we will be opening ourselves up for a lot of abuse of such powers.”

It seems Zuma has followed the constitution in terms of procedure, and it appears that his basis for doing so is plausible — debating the right balance between fighting organised crime and the right to privacy of suspected criminals, in the context of being innocent until proven guilty.

Bar the amount of time it has taken him to “apply his mind” and the inevitable links drawn between this bill and the adventures of the Gupta family, perhaps the president actually has a point here.

Khumalo is the chief investment officer of MSG Afrika Group and presents “Power Business” on Power 98.7 at 5pm, Monday to Thursday

It is important to note the reasons for sending the bill back to parliament