The National Council of Provinces (NCOP) has passed two bills aimed at preventing South Africa from being grey-listed by the Financial Action Task Force (FATF) in February next year.
The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill and the Protection of Constitutional Democracy Against Terrorist and Related Activities Amendment Bill (Pocdatara) were passed by the NCOP on 13 December, at its last virtual plenary sitting of 2022.
The two bills were passed by the National Assembly last month. Now that they have been passed by the NCOP, they can be sent to President Cyril Ramaphosa for assent.
MPs of both Houses were scheduled to attend to constituency work on 14 and 15 December before going on leave from 19 December.
Together, the General Laws Amendment Bill and Pocdatara are designed to address 16 of 20 deficiencies in South Africa’s anti-money laundering/counter-terrorism financing laws. The “technical non-compliance” was identified by the FATF, the global regulator of anti-money laundering and counter-terrorism financing, in an evaluation report in October 2021.
Read: Omnibus anti-money laundering bill almost there
Another legislative measure aimed at avoiding grey-listing were the amendments to the schedules to the Financial Intelligence Centre Act. The amendments, which expand the list of accountable institutions, take effect on 19 December.
Read: Will your business be an accountable institution from 19 December?
However, amending legislation will not be enough to avoid grey-listing, because South Africa must also demonstrate effectiveness in implementation. The country essentially failed all 11 measures used by the FATF to assess effective implementation.
Effective implementation requires robust systems and adequately resourced institutions that have enough competent staff. State capture significantly eroded the willingness and capacity of institutions and agencies designed to detect and combat financial crimes. Despite the government’s efforts, it seems unlikely that South Africa will be in a position to demonstrate that it is meeting the FATF’s standards on combating money laundering and related crimes.
Concerns about Pocdatara
Pocdatara aims to bring South Africa’s counterterrorism law in line with internationally adopted standards on offences related to terrorist training and joining and establishing terrorist organisations.
The bill expands the definition of terrorism, criminalises the publication of terrorism-related content and introduces stiffer penalties for transgressors. It also empowers the Director of Public Prosecutions to issue search warrants for vehicles, persons and premises suspected of acts of terrorism.
During the public participation process, some organisations called for Pocdatara to be reworded, saying its provisions could be used to prohibit legitimate criticism of and protest against government policies.
For example, Dear South Africa, which seeks to promote transparent governance, said the bill conflicted with several clauses in the Constitution, mainly those relating to freedom of expression and freedom of association.
“It has very loose definitions around who a terrorist is or what terrorist activity is. So, if you are outspoken about something that the state has introduced, or its legislation or a comment that the president has made, contradicting them, then they could see you as a terrorist trying to undermine democracy,” Rob Hutchinson, Dear SA’s managing director, said.
The civilian secretariat for police, which serves as a technical adviser to the Minister of Police, said there was no intention to criminalise those opposing government policies.
The secretariat said recommendations by civil society to narrow the definition of “terrorist activity” were not advisable.
“Substantive amendments to the definition that would seek to diminish the definition, and that are amendments other than those proposed in the bill, will most likely compromise the legislative measures that are currently in place in the law to prevent and combat terrorism in the country.”
