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Repercussions of a bill that combats financial crime in South Africa

Updated on January 29, 2017

During the past week many citizens of South Africa found themselves hooked on a live broadcasting of debates between Parliament’s Committee on Finance and parties for and against a bill that is supposed to combat financial crime.

This bill, named the Financial Intelligence Centre (FIC) Amendment Bill, was passed by Parliament in May 2016 and expected to be signed into law by President Zuma before end June 2016. The bill is supposed to combat crimes like money laundering, tax evasion, financing of terrorism, and the illegal outflow of money, in line with international standards set by The Financial Action Task Force.

But now, after a delay of SIX MONTHS, it is back in Parliament, unsigned.

I have given consideration to the Bill in its entirety and certain submissions regarding the constitutionality of the Bill. 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.

"In terms of section 79 (1) of the Constitution I have therefore referred the Bill to the National Assembly for reconsideration for the reasons set out to the Speaker of the National Assembly.

— President Jacob Zuma

President Jacob Zuma


The new FIC Amendment Bill gives unconstitutional rights to Banks

Indeed, the new amendment bill exempts banks from the obligation to obtain a warrant before intruding on the privacy of an individual or institution. Another unjust clause stipulates that a senior bank official has to approve and constantly monitor the accounts of prominent influential persons, which includes Government officials from the president down to municipal managers. (The question is: Why did Parliament pass a bill like this?)

During the debates it became clear that this was not only a battle between Just and Unjust, or between Constitutional and Unconstitutional, but between Pro-Guptas and Anti-Guptas. (Refresh your memory of the Gupta Family, and SA’s Public Protector’s controversial report about this family’s grip on SA’s president, some ministers and CEO’s of parastatals). All of this is still hanging in the air, unresolved!

The Black Business Council and the Progressive Professionals Forum (Pro-Guptas) accused Parliament of ’Majoritarianism’ - a political agenda that allows a specific majority to make decisions that affect the society - while under a democratic majoritarian political structure, which SA is supposed to be, the majority would not exclude any minority. They threatened to prosecute President Zuma if he signs the bill into law.

G7 (The Group of Seven)

The Group of Seven (G7) is a group consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States - the seven major advanced economies as reported by the International Monetary Fund. The G7 countries represent more than 64% of the net global wealth ($263 trillion). The European Union is also represented within the G7.


South Africa does have legislation in place to combat financial crime such as money laundering, terrorist financing activities, tax evasion, etc.

The Financial Intelligence Centre Act (38 of 2001), also known as the FIC Act, came into effect on July 1st, 2003, which made the country the first in Africa to become a member of the inter-governmental Financial Action Task Force (FATF) that was established in 1989 during a G7 summit meeting.

South Africa has a well-structured Financial Intelligent Centre (FIC), with accountable institutions such as banks and many other businesses/institutions who are dealing with people, organisations, and their money. These bodies are obliged by law to identify and verify their clients, to keep records of their client’s identities and of all transactions entered into by them, and to submit reports to the FIC, who are obliged by law to report any discrepancies and possible illegalities to the local and international investigating authorities and supervising bodies who have, on their turn, more rights that will eventually bring the culprits to trial in a court of law.

However, the alleged capturing of South Africa by foreign businessmen since about 2008 has made amendments to the original bill a matter of urgency.

What is Money Laundering?

Money laundering is the process used by criminals to hide, conceal or disguise the nature, source, location, disposition or movement of unlawful activities or any interest which anyone has in such proceeds.

What is White-Collar Crime?

White-collar crime refers to financially motivated nonviolent crime committed by business and government professionals. Typical white-collar crimes include fraud, bribery, Ponzi schemes, insider trading, labor racketeering, embezzlement, cybercrime, copyright infringement, money laundering, identity theft and forgery.

A Money Laundering Offence has three core elements:

The act of money laundering, the presence (benefit) of proceeds of crime, and the knowledge of the fact that a money laundering transaction is happening or has taken place.


Opinion of an owfma-sa

The new FIC-bill not only transfers some of the rights of the FIC to banks in order to streamline the control of financial crime; it seems to be a thorough grip on all who happen to earn a significant amount of money. The new bill gives banks the right to clarify and verify each and every source of income, expense and investment.

However, South Africa is a democracy with a Constitution that established human rights that have to be considered on every level of society, from Parliament to Prisons.

Somehow I have missed the bill’s passing in Parliament – of course, this owfma-sa has more important things to do than checking the doings of Parliament, and therefore I rely on the media to rub interesting trends of events under my nose.

And so, the back-and-forth debating about this new bill during the past week mesmerized me.

Everybody - pro-Guptas as well as anti-Guptas - has a justifiable point, and this may send the bill down the drain, putting South Africa on a United Nations watch-list. The day might even come when the Guptas will sue each and everyone who has used their name in a negative way, says my Crystal ball!)

While the entire FIC-Act can be seen as an intrusion in people’s and organizations’ private affairs without a warrant, the new bill shamelessly authorizes banks to do warrant-less research. Some clauses in the amendment bill obviously need to be reviewed and reworded. But this was only suggested by Treasury, while the pro-Guptas suggested the bill should be scrapped, and the anti-Guptas suggested that it should be sent as it is back to President Zuma who has the right to use tax payer’s money to challenge it in the Constitutional Court.

According to the Portfolio Committee chair, Yunus Carrim, whatever the committee decides, someone is going to take this bill to the Constitutional Court.

The Committee’s final decision is still to be made.

Justice will reign, says this owfma-sa in my capacity as ordinary white female middle-aged South African.

In the meanwhile another issue about money that was stolen by the previous Apartheid Government is busy developing into a crisis, but this is a story for another week.

Music says it all!


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    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      20 months ago from South Africa

      Anita Hasch – I am so glad to meet another South African in HubPages, but at the same time so sorry to hear about your ordeal with Metal Industries and , worse of all, the loss of your hubby. Insurance companies are so well known for their successful duck and diving of responsibilities. So sad! I worked for Metal Industries in 1980-1981 as an assessor, however, I can’t remember their policies and rules. Did your husband pay monthly installments after he was ‘retrenched’ at 60? If so, they have to refund you if they’re not willing to pay your medical accounts.

    • Anita Hasch profile image

      Anita Hasch 

      20 months ago from Port Elizabeth

      Hi Martie, I agree with a change in legislation to prevent white collar crime. It the insurance companies and major banks cannot make sure that the right beneficiaries get their money, then Government intervention is long over due. I have been the victim of this. My husband died 12 years ago, he was in hospital where they diagnosed him with cancer. He was declared terminally ill and was then send to hospice. After coming home, he insisted on going back to work. I could not stop him as he was very determined and would listen to nobody. He returned to work in July. End of October

      he turned 65 and had to leave because he could no longer work full day. Dec they asked him to come in and supervise his replacement.

      I used to take him to work and fetch him at 12am. He worked for about a week. He died the following March. After his death I was told that he had been retrenched. Can you believe that. Also that he had no longer been covered by the Metal Industries as they had been taken of after they turned 60. That is true as I recall my husband told my when he was 63 that he had been asked to sign a form, but that he had then been insured by a policy that gave medical cover and disability cover. He should therefore have been covered by this insurance, which he was as he had told me that I would receive monthly payments when he died. I have received nothing. When he died I had a daughter that had just started matriek and was left stranded.

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      MarleneB – I believe all humans are born with the tendency to be corrupt and greedy – tendencies that has to be tamed and conquered with positive abilities and characteristics developed in us by parents, teachers, and self. And still, power (and money) are able to corrupt even the well-bred. I have seen with my own eyes how people change after being appointed in a position of power. Suddenly they did exactly what those corrupt, selfish, mellomanic, powerful people they used to criticize have done. Power and money are twins; with power comes money, with money comes power. I am convinced that no living person will ever see the end of corruption.

    • MarleneB profile image

      Marlene Bertrand 

      21 months ago from USA

      I have always heard that money is the root of all evil. After reading your article, I am thoroughly convinced of that statement. Not saying it is worse in Africa, because goodness knows we have a huge share of financially-based corruption here in America. I hope the day arrives when we will not have to endure such deep corruption in our countries.

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      mckbirdbks – Banks is surely the most powerful ‘being’ in this world, the single medium that enables us mortal beings to receive what we are compelled to give away in order to live and survive. I think the only people able to live without a bank account are the unemployed, beggars, prostitutes and criminals. Oh, wait, not the unemployed as they need a bank account and card in order to withdraw and spend government grants. Alas, the days of exchanging cash from hand to hand and hiding it from time to time under a mattress are forever over.

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      Nell Rose – I believe that doing stuff for one’s own benefit is normal human behavior, and therefore legal directions have to be in place that prevent each and every one from benefiting at the cost of others. Let fairness and justice reign instead of human’s selfish tendencies. However, who will watch the watchmen?

      Thanks for the encouragement, dear Nell!

    • mckbirdbks profile image


      21 months ago from Emerald Wells, Just off the crossroads,Texas

      What there is crime? There is a reason that banks are losing their reputations. Between the banks and the politicians, there seems no escape for the common citizen. People here in the U.S. should have learned their lessons regarding banks from the closures of the Great Depression and great recession. Many account holder's money vanished.

    • Nell Rose profile image

      Nell Rose 

      21 months ago from England

      Hi Martie, it seems wherever you live someone is always going to be doing stuff for their own gain. your series is really interesting, and shows me a different part of the world that I won't ever visit, great stuff.

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      FlourishAnyway – There are many theories and myths regarding the existence of evil. But I honestly wish we could find the true, real, scientific cause. What if it is only a single chromosome or gene that could be removed at, or before, birth?

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      always exploring – Thank you, Ruby! Love you lots!

    • FlourishAnyway profile image


      21 months ago from USA

      The evil and greed that continues to grip this modern world astound me. We are living in treacherous and unethical times and it is important to keep shining light on bad acts. I just cannot believe we are where we are. Dangerous times.

    • always exploring profile image

      Ruby Jean Richert 

      21 months ago from Southern Illinois

      Martie, you should never doubt the value of your newsworthy hubs. We want and need to know what is going on around the world. We are inner linked with the technology we have today. We would never know about the political problems in SA if we didn't read your hubs. I listen to the world news nightly and SA is never mentioned, so please continue. The important aspect is to not let it get you downhearted. Take care and stay safe. Hugs...

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      always exploring – Between you and me, I am asking myself every week if this series have any value in Hubpages. Should I not rather write about healthy plants, or how to take care of your pet, or how to knit a sweater? What do we learn/score from politics? Only when it becomes history, it obtains value.

      The writing of these articles is not at all good for my health - a story for another day! I will do myself a favor when I only focus on my traveling hubs. Go figure!

      Do you really think I should keep on with this reporting of noteworthy trend of events in SA?

      Presently I have only ONE encouraging thought: I would like to know what’s going on in other countries. Not everything - only the highlights. Just to give me an idea – even half an idea - what the people of other countries are compelled to deal with. I don’t have time to read all the newspapers in the world. So, I would appreciate articles like this.

      So, here I am, beset by doubts :)

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      21 months ago from South Africa

      PegCole17 – Banks may close accounts that reveal possible corruption. They MUST, however, send reports to the FIC, who will take the matter further. In the meanwhile, while the owner cannot prove his innocence to the bank, and therefor obliged to wait for an official arrest, which will give him the opportunity to prove his innocence in a court – 2-3 years procedures – he cannot do any business. The chance that another bank will come to his rescue is zero, as he is already blacklisted. This is a disastrous situation for any business. Go figure! I am afraid, IF the Gupta-family manages to prove that they are not guilty of financial crime, they’re going to sue the 4 banks who had closed their accounts from here up to Cairo. And who’s going to be the real victims? The man on the street! At the end of the day the man on the street is always the victim.

      My only consolation is the fact that questionable things are happening all over the world.

    • always exploring profile image

      Ruby Jean Richert 

      22 months ago from Southern Illinois

      Martie, it seems the entire world is headed for crimes committed by people in power. The constitution is being disregarded and replaced by greedy politicians. People power should rule. The voting booth is more important than ever before. Your presentation is important and well reported. Thank you..

    • PegCole17 profile image

      Peg Cole 

      22 months ago from Dallas, Texas

      From what you've said, it does sound as if the banks are being awarded too much power to scrutinize the accounts of the wealthy. That might be a good thing if it weren't a violation of rights and privacy issues. Sounds like there are a lot of questionable things going on over there politically, financially and economically. You've done a great job recapping and presenting it.

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      22 months ago from South Africa

      kallini2010 – I couldn’t put it better. I have experienced exactly this is my little universe – passing rules and regulations in order to achieve our personal goal(s). It is just another way of hacking a road through a dense jungle while searching for the Promise Land. Can’t allow others to make their own road; they have to follow us, as we want to discover that land first.

    • kallini2010 profile image


      22 months ago from Toronto, Canada

      Hi, Martie,

      I have limited knowledge about politics, economics and especially all this legal talk, what I know is "white collar crime is a crime of opportunity".

      If you can steal, why won't you?

      I don't know if you saw the film "The Big Short", if you didn't - I highly recommend it.

      It's usually white collars that regulate everything - they pass the billls, they ignore them, they revise them, they manipulate them - somehow always to their own advantage.

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      22 months ago from South Africa

      billybuc – I wonder if there was ever a time in history when people were able to spend their entire ±70 years on earth without seeing any form of disaster? Thanks to television and the Internet we are (finally) able to know what goes on in every corner of this world – well almost – and also up there in the universe, so, perhaps what we see today has been happening since the beginning. The fall of Babylon just crossed my mind for the second time tonight! You know, I wonder if there was only one male and one female created in the beginning? If you ask me, humans appeared (attacked Earth) like an outbreak of measles – another topic for another day. Lol!

    • MartieCoetser profile imageAUTHOR

      Martie Coetser 

      22 months ago from South Africa

      marcoujor – Of course, crime should be fought as if it is a devastating disease. But perhaps we should stop hoping that it will disappear from the face of the earth like pox and leprosy. (Although I understand the latter is not yet 100% eliminated.)

      I wish I could find (and add to this hub) some videos that contain only the highlights of the debates, but I have searched and spent data in vain! Unfortunately data that enables us to use the Internet and all its wonderful facilities is way too expensive in SA. And so unnecessary when one considers the annual profits of the companies that sell data and/or airtime. Of course, this is a topic for another day.

      Love you lots, dear Mar!

    • billybuc profile image

      Bill Holland 

      22 months ago from Olympia, WA

      You know, growing up during the 60s, I thought that was the greatest decade of unrest in the world. I may have to change that to our current decade. I've never seen anything like what is going on around the world. Thank you for sharing your thoughts on South Africa.

    • marcoujor profile image

      Maria Jordan 

      22 months ago from Jeffersonville PA

      Looks like you will never run out of Noteworthy News - sounds quite familiar actually.

      To me, white collar crime is the equivalent of verbal / emotional abuse - it's impact can be as / even more hurtful than blue collar crime ( = physical abuse).

      Thanks for your reporting and your views, dear Martie - both ever so valuable. Love and hugs, mar


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