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Legal minds found Financial Intelligence Centre bill to be constitutional, MPs hear

Legal minds found Financial Intelligence Centre bill to be constitutional, MPs hear
Photo by Bloomberg

7th December 2016

By: African News Agency


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Parliamentary and state legal advisors had found the provision in the Financial Intelligence Centre (FIC) Amendment Bill to which President Jacob Zuma has objected to be constitutional, the legislature’s standing committee on finance heard on Wednesday.

Zuma declined to sign the bill for five months after it was approved and last week sent it back to the committee for fear that section 45 of the bill flouts the Constitution by allowing for warrantless searches in certain circumstances.


Senior parliamentary law advisor Frank Jenkins cited several cases in which the Constitutional Court had accepted the principle of warrantless searches, provided certain conditions were met.

“Whether you can have warrantless searches was answered by the Constitutional Court, it says yes, under certain circumstances.”


Crucial in this case was that FIC supervisors could not use anything found during a search for criminal prosecution, but could only report such to the police.

National Treasury’s deputy director-general for tax and financial sector policy Ismail Momoniat told the committee that state law advisors and Cabinet ministers had scrutinised and approved the provision in its current form.

He said that National Treasury had sought further legal advice following Zuma’s objection, and added that it was imperative that finality be achieved as South Africa had been given until February next year by the Financial Action Task Force to report on the implementation of the amendment bill.

Momoniat reminded the committee that the bill sought to prevent corruption and that foreign financial transactions would become more expensive if South Africa failed to comply with the guidelines. He noted that not doing so did not absolve South Africans from international standards.

“It is like Brexit, you can leave but your commitment to Europe stays,” he said.

Momoniat went on to liken the FATF’s close monitoring of the situation as similar to credit ratings scrutiny of the local economy, noting that National Treasury was trying to avoid the organisation issuing a public statement in which it named South Africa as a non-compliant jurisdiction.

Zuma’s refusal to sign the bill has meant that the country will miss an earlier deadline of February to impose tighter controls on financial transactions.

The committee resolved that it would seek the independent opinion of a senior lawyer on the provision in question, and would also invite public submissions.

However, committee chairperson Yunus Carrim said it would be impossible to achieve before the end of the current parliamentary year and dismissed Monomiat’s concern over the February report back date, suggesting the process could stretch until late March 2017.

Carrim reiterated the strong assurances he gave in the National Assembly on Tuesday that Parliament would not meekly accept the view expressed by Zuma’s legal advisors.

“We cannot as Parliament be suppine. We will not tremble before any president.”

Carrim questioned how such a substantial objection could have arisen after the bill underwent a rigorous process and warned political parties that the principle was not up for review, but merely whether the conditions set for searches without a warrant had been satisfied.

“What has happened since May? The policy issue is clear. Warrantless searches are warranted. The purpose of parliaments around the world is to prescribe under which circumstances.”


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