Archive | Security,police,defence

Gigaba pushes for control of border posts

Treasury, Home Affairs at odds on customs issues

Parliament will be debating in the new session in August the Border Management Authority Bill.   What the Bill proposes is a single state entity known as the Border Management Authority (BMA) to oversee all aspects of the movement in the import/export of goods and to control movement of all persons either leaving or entering the country.

The idea is that all border law enforcement functions along South Africa’s fragmented 5,000 kilometres of border will be the responsibility of the BMA.   Read More……    Border Management Bill July 2018 PDF

Posted in Agriculture, Finance, economic, Security, Security,police,defence, Trade & Industry, Transport0 Comments

Fresh Cybercrimes and Cybersecurity Bill tackles Internet fraud

…  Revised Bill criminalises cybercrimes …

posted 5 Aug… A new Bill designed to give powers to the State Security, Defence, Police and Telecommunications Ministers to intervene in many aspects of South Africa’s key economic, financial and labour environments and zeroing in on cybercrimes and related offences, is in debate.  It also calls upon the financial sector to assist in tracking down fraudsters.

Offences include the circulation of messages that aim at economic harm to persons or entities; that contain pornography or could cause mental or psychological stress; the Bill calls upon the private financial and communications sector and, more specifically, electronic service providers to assist with its objectives. The Bill will also change much in the way how government and SOEs go about their business to reflect the current call for electronic security.

The revised Bill is re-write of that originally tabled in 2015 and rejected as too convoluted and wide ranging on issues that could cause unintended consequences.

Badly needed

Despite placing considerable onus upon the private sector to assist, the IT industry seems to be guardedly welcoming the debate which is about to commence. The original and rejected Cybercrimes and Cybersecurity Bill was tabled in Parliament last February.

The main comment circulating seems to be that this later version is more specific than its earlier counterpart, provides more clarity and has less weight placed upon tedious operational management factors in state structures designed to fight cybercrime.

The Bill is the product of the Department of Justice and Constitutional Affairs (DoJ) and from what has been said, Deputy Minister John Jeffreys seems to be the state official still running with the legislation. He said at a media briefing some months ago, “This Bill will give the State the tools to halt cybercrimes and trained teams to bring to book those who use data as a tool for their crime.”

Not meant

Originally, when the Bill was tabled in 2015 it caused a storm of controversy. Whilst its objectives to catch criminals and stop the growing invasion institutional attacks were understood, unintended consequences for the media were not foreseen. The new Bill acknowledges that journalists and whistle-blowers have protection under the Protected Disclosures Act.

However, the somewhat draconian powers of seizure of data granted to the authorities will still no doubt worry many service providers insofar as interlocking the proposals into the Protection of Personal Information (POPI) Act and the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) are concerned, it has been suggested in hearings.

However, the Minister and other ministerial portfolios concerned, appear to have weighted their decision upon the growing threat of international cybercrime and have continued to call for service providers to assist with the issue caused by a late start.

SA under limelight

Some IT forensic reports indicate that sub-Saharan Africa has the third highest exposure to incidents of cyber fraud in the world and according to those who published this fact, they also claim that incidences of cybercrimes and cybersecurity breaches are escalating globally at 64%, with more security incidents reported in 2015 than 2014 for South Africa.

South Africa is known to be a specific target for cybercrime involving unlawful acquisition of sensitive data relating to clients and/or business operations due to a very high reliance on internet connections by commerce. Large data storage packages proliferate in SA, it is suggested, ranging from the JSE to the banking sector.

ATMs, bank transfers

In the case again of South Africa as part of sub-Sahara Africa, wire transfer fraud accounts for 26 percent of cybercrimes, far ahead of the global average of 14 percent, South Africans being defrauded of more than R2.2bn each year it is estimated.

Banking and financial institutions in South Africa, it is noted in the preamble to the Bill, are particularly exposed, the Reserve Bank having stated back in 2016, “It would be remiss of us in our duty if we ignored the growing risks emerging from the financial services sector’s increasing reliance on cyberspace and the Internet.”

Definitions

The Bill now before Parliament criminalises unlawful and intentional conduct regarding data, data messages, computer systems and programs, networks and passwords and creates as crimes “cyber fraud, cyber forgery and cyber uttering”.

It criminalises malicious communications – namely messages that result in harm to person or property, such as revenge porn or cyber bullying. The police are given extensive investigation, search and seizure powers in the Bill and an array of penalties, including fines and imprisonment apply, including various prescribed in terms of the Criminal Procedure Act, 1977.

No FICA-type warrants.

It is notable that cyber-crime powers of search and arrest remain with SAPS and not any specific structure or system set up by the new Bill to monitor instances of cybercrime or detect suspicious data attacks.

There remain, however, quite onerous obligations on electronic communications service providers and financial institutions, not only to assist in investigations of cybercrimes but also to report instances of cybercrime. A “framework of mutual co-operation between foreign states” is established in respect international investigation and the prosecution of cybercrime.

Crime fighting structures

The Cybercrimes and Cybersecurity Bill also establishes a Computer Security Incident Response Team, as did its predecessor, to establish contact with the private sector alongside with the already functional Cyber Security Hub responsible to the Minister of Telecommunications and Postal Service.

Finally, on structures, the Minister of Defence is to establish and operate a Cyber Command and appoint a General Officer Commanding.

The Bill also provides for the declaration of what is termed as “critical information infrastructure possessed” by financial institutions – for example databases upon which an attack could possibly represent a national threat.    Debate will no doubt flow around who and who not should report and upon what exactly.

The crimes defined

For the technically minded, the Bill In terms of the Bill, the following activities are criminalised: unlawful securing of access to data, a computer programme, a computer data storage medium or a computer system; unlawful acquisition of data; unlawful acts in respect of software or hardware tools; unlawful interference with data or a computer programme; unlawful interference with a computer data storage medium or computer system; unlawful acquisition, possession, provision, receipt or use of password, access codes or similar data or devices.

Also included are cyber fraud; cyber forgery and uttering; cyber extortion and certain aggravating offences; attempting, conspiring, aiding, abetting, inducing, inciting, instigating, instructing, commanding or procuring to commit an offence; theft of incorporeal properties; unlawful broadcast or distribution of data messages which incites damage to property or violence; unlawful broadcast or distribution of data messages which is harmful; unlawful broadcast or distribution of data messages of intimate image without consent.

The Bill imposes a list of penalties and allows for imprisonment for up to 15 years for cybercrimes and the maximum fine that may be levied for failing to timeously report an incident or failing to preserve information is now capped at R50,000, far less than the extraordinarily high penalties for non-disclosure levied in the initial version of the Bill.

Necessary actions

The search and seizure powers granted in terms of the new Bill “do not represent increasing the state’s surveillance powers”, Deputy Minister, John Jeffries said, “But if the State cannot seize evidential material to adduce as evidence, it will be impossible to prove the guilt of an accused person.”

Any hearings will obviously focus mainly upon the onuses and impositions imposed in the Bill upon electronic communications service providers and financial institutions, known by an acronym in the Bill as “ECSPs”. A date for further parliamentary briefings by DoJ has yet to be scheduled.
Previous articles on category subject
Cybercrime and Cybersecurity Bill invokes suspicion – ParlyReportSA
Draft Cybercrime Bill drafts industry – ParlyReportSA
Lack of skills hampering broadband rollout – ParlyReportSA

 

Posted in Communications, Justice, constitutional, LinkedIn, Security,police,defence, Trade & Industry0 Comments

Border Management Authority around the corner

SARS role at border posts being clarified ….

In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border posts, managed and administered by the envisaged agency and reporting to Department of Home Affairs (DHA), were to “facilitate” the collection of customs revenue and fines by SARS staff present.

However, on voting at the time of the meeting, Opposition members would not join in on the adoption of the Bill until the word “facilitate” was more clearly defined and the matter of how SARS would collect and staff a border post was resolved.

Haniff Hoosen, the DA’s Shadow Minister of Economic Development said that whilst they supported the Bill in general and its intentions, they also supported the view of National Treasury that the SARS value chain could not be put at risk until Treasury was satisfied on all points regarding their ability to collect duty on goods and how.

Keeping track

Most customs duty on goods arriving at border controls had already been paid in advance, parliamentarians were told; only 10% being physically collected at SA borders when goods were cleared.

However, with revenue targets very tight under current circumstances both SARS and Treasury have been adamant that it must be a SARS employee who collects any funds at border controls and the same to ensure that advance funds have indeed been paid into the SARS system.

The Bill, which enables the formation of the border authority itself, originally stated that it allowed for the “transfer, assignment and designation of law enforcement functions on the country’s borders and at points of entry to this agency.”

Long road

It was the broad nature of transferring the responsibility customs of collection from SARS to the agency that caused Treasury to block any further progress of the Bill through Parliament, much to the frustration of past Home Affairs Minister, Malusi Gigaba.   It has been two years since the Bill was first published for comment.

DHA have maintained throughout that their objective is to gain tighter control on immigration and improve trading and movement of goods internationally but Treasury has constantly insisted that customs monies and payments fall under their aegis. The relationships between custom duty paid on goods before arrival at a border to Reserve Bank and that which must be paid in passage, or from a bonded warehouse was not a typical DHA task, they said.

Breakthrough

It was eventually agreed by DHA that SARS officials must be taken aboard into the proposed structure and any duties or fines would go direct to SARS and not via the new agency to be created or DHA.

This was considered a major concession on the part of DHA in the light of their 5-year plan to create “one stop” border posts with common warehouses shared by any two countries at control points and run by one single agency. More efficient immigration and better policing at borders with improving passage of goods was their stated aim.

Already one pilot “one stop border post”, or OSBP, has been established by DHA at the main Mozambique border post by mixing SAPS, DHA and SARS functions, as previously reported.

To enable the current Bill, an MOU has been established with SAPS has allowed for the agency to run policing of SA borders in the future but Treasury subsequently baulked at the idea of a similar MOU with SARS regarding collection of customs dues and the ability to levy fines.
Bill adopted

At the last meeting of the relevant committee, Chairperson of the PC Committee on Home Affairs, Lemias Mashile (ANC) noted that in adopting the Bill by majority vote and not by total consensus, this meant the issue could be raised again in the National Council of Provinces when the Bill went for consensus by the NCOP.

Objectives

The Agency’s objectives stated in the Bill include the management of the movement of people crossing South African borders and putting in place “an enabling environment to boost legitimate trade.”

The Agency would also be empowered to co-ordinate activities with other relevant state bodies and will also set up an inter-ministerial committee to handle departmental cross-cutting issues, a border technical committee and an advisory committee, it was said.

Mozambique border

As far as the OSBP established at the Mozambique border was concerned, an original document of intention was signed in September 2007 by both countries. Consensus on all issues was reached between the two covering all the departments affected by cross-border matters.

Parliament was told at the time that the benefit of an OSBP was that goods would be inspected and cleared by the authorities of both countries with only one stop, which would encourage trade. In any country, he explained, there had to be two warehouses established, both bonded and state warehouses.

Bonded and State warehouses

Bonded warehouses which were privately managed and licensed subject to certain conditions, were to allow imported goods to be stored temporarily to defer the payment of customs duties.

Duties and taxes were suspended for an approved period – generally two years but these had to be paid before the goods entered the market or were exported, MPs were told. The licensee bore full responsibility for the duty and taxes payable on the goods.

State warehouses on the other hand, SARS said at the time, were managed by SARS for the safekeeping of uncleared, seized or abandoned goods. They provided a secure environment for the storage of goods in which the State had an interest. Counterfeit and dangerous or hazardous goods were moved to specialised warehouses.

Slow process

MPs noted that it had taken over six years for the Mozambique OSBP to be finalised. SARS said there were many ramifications at international law but added two discussions with Zimbabwe for the same idea had now taken place. It was hoped it would take less time to reach an agreement as lessons had been learnt with the Mozambican experience.

On evasion of and tax, SARS said in answer to a question that losses obviously occurred through customs avoidance and evasion, so it was consequently it was difficult to provide an overall figure on customs duty not being paid, as evasion was evasion. Smuggling of goods such as narcotics, or copper, which could only be quantified based on what had been seized.

The same applied to the Beit Bridge border with Zimbabwe where cigarette smuggling was of serious concern and through Botswana.

In general, it now seems that Home Affairs is to adopt an overall principle of what was referred to as having one set of common warehouses for one-stop declaration, search, VAT payment and vehicle movement with a SARS presence involving one common process for both countries subject to a final wording on the SARS issue before the Bill is submitted for signature.

Previous articles on category subject
Border Authority to get grip on immigration – ParlyReportSA
Mozambique One Stop Border Post almost there – ParlyReportSA

Posted in Finance, economic, Fuel,oil,renewables, Justice, constitutional, Mining, beneficiation, Public utilities, Security,police,defence, Trade & Industry, Transport0 Comments

FICA Bill could meet new task force deadline

OECD money task force waiting for SA  

….sent to clients Feb 7…. Chairperson of the Standing Committee on Finance, Yunus Carrim, made it quite clear in terms of parliamentary rules that further debate on the FICA Bill aligning SA to global money laundering task force requirements are confined to the President’s reservations about the Bill’s constitutionality on the issue of warrantless searches. Nothing else was to be debated or considered despite attempts, he said.

After a “suspicious delay”, to quote the Democratic Alliance, of over five months during which the President unexpectedly failed to sign the Bill into law, it was suddenly returned to Parliament with the query a few days before closure for the Christmas recess.

Playing for time

It is suspected that the President’s office might have been making a pitch for more debating time on the Bill in 2017 and to allow the Bill to be re-scrutinised thereby causing further delay or even allowing for an ANC motion to reject the Bill.  This is according to one Opposition member on the Committee.

Following this, in a meeting hastily convened before Parliament closed, parliamentary orders were changed and Chair Carrim re-scheduled the Committee’s last meeting which was to be held on the Insurance Bill.  He instead scheduled an urgent meeting to debate the President’s move, calling for both legal opinion from the State Law Advisor and the attendance of National Treasury to learn of implications caused by the delay.

Next move

As of the result of this last-minute meeting, Parliament and Carrim have to some extent countered what seemed the purposeful delaying tactic.    The Committee agreed to call for written submissions only, preferably containing legal opinion, on only the constitutionality of Clause 32, section 45B (1C) on warrantless searches, saying only such will be allowed and no generalised observations on any other clauses or the rationale behind the Bill will be heard.

In the meeting, MPs expressed anger at the waste of public money and even Chair Carrim expressed his frustration of having to go back to the drawing board on a Bill that had already been passed. “I am getting too old for these kind of games”, he said.

Carrim concluded, “This Bill was approved by Parliament in its entirety and by a majority vote after many months of debate. Legal opinion was called for on many aspects and its signature into law was urgently required to meet international deadlines. In terms of the Joint Parliamentary Rules therefore, only the one aspect that the President has queried could be considered and the Bill was to be returned with the opinion of this Committeeafter a vote in the NA.

Advice sought

It was agreed by the Committee that legal counsel specifically would be sought on the constitutional aspects raised and this would be returned together with the Bill as it stood for signature in an attempt to convince the President not to refer the matter to the Constitutional Court and further delay implementation of a law approved by Parliament.

Adv. Jenkins, State Law Advisor, told Yunus Carrim that he could see no grounds for the contention that the circumstances of warrantless searches were not properly circumscribed in the Bill and were thus legal. It was established that FICA had already conducted some 380 warrantless searches.

Adv. Jenkins pointed out that in terms of the Constitution and Parliamentary rules the President could only return a Bill once to Parliament, whatever the specific subject or subjects.  Thus, this was the only issue that should be debated and considered by Parliament.

It would also be preferable, he said, to return also legal opinion based on supporting input from public hearings, but he advised that once again this should be confined to the subject matter, i.e. warrantless searches.

Country exposed

Meanwhile, President Zuma’s obviously purposeful delays have exposed South Africa to further detrimental opinion from the Financial Action Task Force (FATF) who are holding a plenary meeting of the OECD in Paris in February, Treasury deputy director-general Ismail Momoniat told Chair Yunus Carrim.

South Africa could well be slapped with a warning letter or even a fine at taxpayer’s expense for failing to sign into law amendments to the Financial Intelligence Centre Act, he said, and added that this would not be helpful at the time of a Standard and Poor financial rating exercise to be carried out in the New Year.

Local banks at risk

Even a mild rebuke from the Task Force could have significant consequences for SA, DG Momoniat said, since it would raise concern among foreign regulators and banks about SA’s commitment to vigilant financial regulation.     This in turn would have a ripple effect throughout the economy since correspondent relationships between the global network of banks are vital to effect payment for South Africa exports and imports.

Carrim responded that of the two bad options resulting from the President’s actions, the least damaging was to ignore OEDC opinion for the moment, take proper legal counsel on the issue and await the opening of a new session in late January/early February 2017 for a water-tight case to go back to the President’s office. DG Momoniat acknowledged that Treasury noted the course that was being adopted.

Jeremy Gauntlett S.C. was to be contacted and the question of warrantless searches be considered by him, the wording revised if necessary according to counsel given and the Bill returned to the National Assembly for adoption based on any revisions, if made.

Rules for submissions

The final position was therefore that all submissions to Parliament had to only deal with the constitutionality of section 45B (1C) dealing with warrantless searches in clause 32 of the Bill and those making submissions were requested to provide legal opinions for their arguments .

It was suspected that Black Business Forum and other groupings would make a determined effort widen the scope of the deliberations.

Any submissions on other provisions of the Bill, not the subject of the hearings, had to be made separately in more public hearings to be held on “Progress on Transformation of the Financial Sector”, tentatively set for 14 March 2017. Those additional hearings will be advertised separately, said Carrim’s parliamentary notice when published.

Previous articles on category subject

FICA Bill : Hearings on legal point – ParlyReportSA

FIC Bill hold up goes to roots of corruption – ParlyReportSA

Red tape worries with FIC Bill – ParlyReportSA

Posted in Energy, Finance, economic, Justice, constitutional, Security,police,defence, Trade & Industry0 Comments

Cybercrime and Cybersecurity Bill invokes suspicion

Cybercrime Bill stated as invasive

…sent to clients 28 Jan…   A new law to assist in enforcing South Africa’s fight against cybercrime, hacking and unlawful interception of data is about to be tabled in Parliament. As expected, the proposals are not without considerable misgivings in the private sector and involve claims that the state may have designs upon the control of free speech and/or are intent upon the control or manipulation of cyberspace.

The draft Cybercrime and Cybersecurity Bill (C&C Bill) has now been approved by Cabinet, the draft having been published for comment as far back as September 2015.  Industry players are deeply involved and the next platform for their involvement moves to the actual wording of the document that will form the basis for regulations.

Agents for the state

The legislation states that the proposals are designed to give powers to the State Security, Defence, Police and Telecommunications Ministers, which powers will not only extend into many aspects of South Africa’s key economic, financial and labour environments but will impose responsibilities on service providers.

The Bill clearly states it will call upon the private sector for compliance into order to meet its objectives and will also change the way the public service goes about its business to reflect the call for security.  Cross hairs are to zero in on the criminalisation of cyber-facilitated offenses including circulation of messages aimed at economic harm, contain pornography or could cause mental or psychological harm.

Parliamentary stage

The next stage of public sector involvement will be extensive parliamentary hearings, no doubt involving joint portfolio committees, to cover the many aspects involved.  Also to allow for further submissions on deep concerns in the private sector regarding compliance and intrusion of free speech rights.

The long and quite complicated process of drafting such legislation has been undertaken by the Department of Justice and Constitutional Development.  It is stated that the proposals are of an umbrella approach towards legislation already in the ambit of the new Bill, the objective of which is to extend any new regulations over a wide range of business endeavours and activities “in the public interest”.

Long history

The process started at a point in the cybercrime history log which seems a century ago.  A government gazette articulated what was necessary. “I, Mbangiseni David Mahlobo, Minister of State Security, hereby publish the National Cybersecurity Policy Framework as approved by Cabinet in March 2012 for public information.”

The long journey has finally resulted in a 130-page draft which firstly creates offences, prescribes penalties and regulates for powers to investigate, gain access, search and seize items. It gives such powers to the South African Police Service (SAPS) and the State Security Agency (SSA).

Future structures

The Bill then proposes that structurally the Minister of Police establish both a National Cybercrime Centre and appoint a director in charge – a person currently serving with the SSA – and similarly appoint such a director in charge for a “point of contact centre” for cybercrime activity, outreach and contact.

Monitoring all structures will be a Cyber Response Committee (CRC) made up of 13 experienced persons chaired by the DG, Dept. of State Security.

Any interventions at this level will be, by nature of the vastly changing business environment and the global challenge of the subject matter of the Bill, “which will form the critical point of balance between the forces of state control and public endeavour”.

Ground troops

Initially, the Minister of State Security is to appoint a director in charge of a proposed Cyber Security Centre, such person also serving with SSA and for the Minister to establish Government Security Incident Response teams, also appointing a person from the State Security Agency as the head of each specialised investigating team.

Finally, on structures, the Minister of Defence is to establish and operate a Cyber Command and appoint a General Officer Commanding.

Furthermore, provision in the Bill is made for the Minister of Telecommunications and Postal Services to establish and operate a Cyber Security Hub and appoint a director of same. It is in this area that assumedly the main interface between private and public sectors will take place.

Key points

An example of a database to be protected is given in the Bill as the Home Affairs database and the mandate for dealing with cybercrime clearly includes the fact that foreign states and South Africa will be co-operating to investigate possible offences.

Also, powers are granted to the President who may enter agreements with foreign states to promote cybersecurity. The proposals make it quite clear that international crime fighting and the local protection of cyberspace are to be woven together. This will involve changes to the anchor Electronic Communications and Transactions Act, particularly where the Act deals with attempts to deal with abuse of information systems.

The nitty gritty

Where the C&C Bill ventures into the private sector there will no doubt be, and certainly has been to date, plenty of debate.  The Bill as proposed, broadly and perhaps too grandly, allows for the imposition of obligations on electronic communications service providers (ECSPs) and financial institutions in respect of aspects “which may impact on cybersecurity”.

The difference between obligations and compliance seems a fine line but already the Dept. of Telecommunications has set up a website on https://www.cybersecurityhub.gov.za/ to try and clarify issues.

At what point?

The general obligations of ECSPs are a set out in the draft bill but an obligation is proposed that as soon as a ECSP “becomes aware of an offence being committed on its network”, the matter must be declared to the National Cybercrime Centre.

The offences are enumerated in the Bill but it is possible that clarity is required, according to stakeholders who have voiced opinions so far, as to who decides at and at what level the retention of a suspicion becomes an offence or to restate the problem, at what point does a suspicion become a reportable fact.

Proposed offences include unlawful interception of data; unlawful access, personal information and financial information-related offences; unlawful acts in respect of software or hardware tools; unlawful acts in respect of malware; unlawful acquisition, possession, provision, receipt or use of passwords, access codes or similar data or devices; computer-related fraud and computer-related extortion.

Extensive powers

Most focus on the fact that the Bill’s clause 58 gives the State Security Minister powers to determine what should be included in a “national critical information infrastructure”.

The Bill goes on to state that should it “appear” to the Minister that any information presented is of such “strategic nature” that any interferences, loss, damage, immobilisation or disruption which may result in prejudice to the “security, defence, law enforcement or international relations of South Africa; or prejudice the health and safety of the public; interfere or disrupt any essential service’, then the Minister may implement the powers granted by the Bill.

The “Apple” problem

Broadly speaking, also included is any malevolent act which “causes any major economic loss, destabilises the economy of South Africa or creates any form of public emergency’’ with the proviso that the organisation must “at its own cost take steps to the satisfaction of the Cabinet minister” to comply with a state request.

Any “affected organisation may be given the right to be afforded an opportunity to make representation” but, to repeat, players in the industry note that a great amount of responsibility has been delegated without clear definitions of what is reportable.

The background

The seriousness of the Bill and the recognition that cybercrime must be dealt with firmly is measured by the background given to the Bill.    It is estimated that cyber-related offences currently exceed a value of more than R1bn annually. This is escalating at speed, the Department of Justice states.

In general terms, one of the tasks of the Cybercrime Centre is stated in the revised draft as informing all of cybercrime trends and creating an environment which enables parties to report cybercrime without being suspected of whistle-blowing with the accompanying commercial disadvantages.

In other words, the fear with the original draft expressed by the Right2Know campaign that the draconian powers of seizure worried many in the IT industry and that lack of protection for whistle blowers was out of kilter with free speech requirements, may have to some extent been responded to.

Heavy hand of the law

Still, fines of up to R10m and/or 10 years’ imprisonment are involved following a guilty verdict for unlawfully accessing or intercepting “a national critical information infrastructure” involving “critical data”, which makes for a tricky scenario for ECSPs handling traffic and journalists handling information.

This is in the light that an ECSP could be liable on conviction to a fine of R10 000 for each day on which such failure to comply with disclosure requirements continues, it was noted.    To be specific, some fifty offences are detailed in the areas of data, messages, computers, and networks.

This is serious talk.   Whilst national cybersecurity needs are recognised as paramount, as the latest draft explains, the extent of state powers in the hands of uncontrolled and misdirected state effort gives concern to many in the ECSP business community, particularly in the light of the public nature of the internet.

No warrantless searches

On the other hand, whilst the C&C Bill gives SAPS and SSA extensive powers to investigate, search, access and seize assets wherever they might be located, the search powers granted are not emanating from the proposed Bill.

Search powers are only possible provided the search entity has a search warrant granted in the normal way, the department says.  SSA will be purely looking, they say, for data that has a feature of malevolence and commits crime in terms of the need to protect the State and its citizens.

At a briefing for the media, the Justice and Constitutional Development Department in Pretoria Deputy Minister of Justice and Constitutional Development, John Jeffery, gave a further assurance that what is about to arrive in Cape Town “will not give any powers to the State Security Agency (SSA) to control the internet or spy on local users”.

Criminal data

The search and seizure powers granted in terms of the latest draft of the C&C Bill around the interception of data “do not represent increasing the state’s surveillance powers”, the Minister said.

“As part of the final draft of the bill, it says that to prove an offence in a court of law, data must be seized as evidential material.  If the State cannot seize evidential material to adduce as evidence, it is impossible to prove the guilt of an accused person. “

The criminal procedure act is currently used to investigate cybercrimes, Minister Jeffery said, and to this end the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) “are already in the tool box”.

Anchor still RICA

The C&C Bill is merely extending the RICA from that aspect, he said, which already has basic general principles in place to protect persons against unlawful interception of communications. “There is thus no extension of the so-called ‘surveillance powers’ of the State”, he added.

He confirmed that previous versions of the Bill, whilst stating a person who fell foul on the issue of state information that was classified as secret could go to jail for 10 years without the possibility of a fine, now, the final draft of the Bill acknowledges that journalists and whistle-blowers have protection under the Protected Disclosures Act.

Minister Jeffrey said was satisfied that the C&C Bill, now headed towards its final shape, gives the State the tools to halt crime and bring those who used data as a tool of crime to book.

 Defining data

He concluded, “Data is merely a means to commit offences such as fraud, damage of programmes and computer systems, extortion, forgery and uttering. It can also be used to commit murder by remotely switching of a respiratory system or terrorism by overloading the centrifuges of a nuclear station or remotely opening the sluices of a dam which causes large scale flooding.”

Much of what will come up in the parliamentary hearings of submissions will most likely involve the space occupied by the ECSPs and their responsibilities as perceived by the State. Furthermore, the role to be played by any business institution using large amounts of data needs to be clarified as far as areas of compliance are concerned.

Previous articles on category subject

Draft Cybercrime Bill drafts industry – ParlyReportSA

South Africa on international cybersecurity – ParlyReportSA

Broadband allocation could involve SABC – ParlyReportSA

Posted in Communications, LinkedIn, Security,police,defence, Trade & Industry0 Comments

Liquor licensing may have impractible conditions

DTI gets tough with age limits

...sent to clients 17 Oct…..   In what will be a tough ask, Minister of Trade and Industry, Robliqour-store Davies has proposed a number of changes to the National Liquor Act, the most contentious being to raise the legal minimum age for purchasing liquor from 18 to 21 years of age. The call for public comment on the draft National Liquor Amendment Bill as gazetted closed on 30 October.

The Department and Trade and Industry (DTI), who deal with liquor licensing at a national level, state that South Africa has globally the worst figures for alcohol related accidents and anti-social incidents involving liquor abuse.

Drastic steps had to be taken to gain control of alcohol related injuries, illnesses and abusive behaviour that were costing the state some R40bn a year, the Minister said.

Younger age groups

The Bill focuses specifically on youth since DTI maintains that alcohol abuse specifically damages the development of the brain making youth vulnerable. Liquor advertising aimed specifically at young persons will be prohibited under the Act and revised rules set down on broadcast times and content. Advertising billboards aimed at youth will be banned from high density urban areas.

Minister Davies called for “robust public engagement on the issues raised in the Bill” as it dealt with matters “that are of significance to South African society.” He noted that South Africans consume alcohol related products at double the world average rate.

On the question of the age threshold proposed in the draft Bill is a minimum purchasing age, not as has been widely reported a “minimum drinking age”. The onus of establishing age will fall upon the supplier who must take “reasonable steps to establish age” when dealing with a young purchaser.

Pressure point

A civil liability will now fall upon the manufacturers and suppliers as well who knowingly breach the new regulations, Minister Davies said, believing that this was the only way to get the problem understood and the new rules adhered to.

sab-youth-beer-adThe draft Bill states that responsibility will also fall upon the seller not only not to supply liquor to a person visibly under the influence of alcohol but that the seller could be in addition asked to show reason why they should not bear costs for damage incurred as a result of a subsequent accident involving that person who made the purchase.

On the problem of community issues, such as tackling foetal alcohol syndrome which is considerably worse in South Africa than elsewhere in the world and alcohol related crime, the onus of proof will shift not only to a supplier but also to manufacturers to show that reasonable steps were taken to ensure that liquor is not sold to illegal or unlicensed outlets. Which brings up the issue of liquor licences.

Distance from community

Licensing is a provincial matter and there are a number of changes that the amending Bill police-raidwill make to the anchor Act which will have to be abided by. Particularly notable is the proposal that licences cannot be granted to an outlet less than 500 metres from any school, recreation facilities and places of worship.

Provinces are stated as “having an obligation” to be far stricter in granting licences in highly urbanised areas, giving due regard for the need for stricter business hours and for the need to deal with noise pollution in stressful living conditions.

Previous articles on category subject
New health regulations in place soon: DoH – ParlyReportSA
Licensing of Businesses Bill re-emerges – ParlyReportSA
Medicines Bill : focus on foodstuffs – ParlyReportSA

Posted in Justice, constitutional, Security,police,defence, Special Recent Posts, Trade & Industry, Transport0 Comments

FIC Bill hold up goes to roots of corruption

Bill originally approved by Cabinet

.….. sent to clients 20 Aug…..Going to the heart of the issues facing National Treasury on money launderingzuma9 and financial crime, or in this specific case the Financial Intelligence Centre Amendment Bill (FIC Bill), is the failure of President Zuma to give assent to the Bill and to sign it into law.

The delay in adding his signature gives yet another signal that there is lack of interface in constitutional terms between the Presidency, the Cabinet, National Treasury and Parliament and all of this adds more uncertainty in the economic sphere.

fic-logo-2The main objective of the FIC Bill is to conform with international pressure placed upon South Africa to update its governance ability to monitor international financial crime. During the passage of the Bill, however, it became quite evident to interested parties that the Bill could expose a lot more about South Africa’s own internal money laundering, inflows and outflows, than simply making a contribution to the global money laundering problem.

This, of course, was the original point made by international agencies when calling upon countries to agree to such legislation.    Countries have to clean up their own affairs in the process.

Crime busting

Africa MoneyThe Bill intends enhancing South Africa’s anti-money laundering (AML) processes to combat more effectively the crime of financing of terrorism to be achieved by amending the anchor Financial Intelligence Centre Act “so as to define certain expressions”.

However, in exposing monies destined for terrorism, a lot more than just terrorism could become evident in the category to be classed as “prominent persons”, a fact which has been endlessly debated in Parliament and why the Bill has come to the fore in the media.

More entrants

The fact that some in the Cabinet may not like the preamble to the Bill is evident, particularly expressed byzwane Minister Zwane in his ridiculous call for a judicial investigation to investigate the motives for calling the banking sector to report to Treasury on individual groupings and persons and for an investigation into the banks themselves for closing the accounts of certain “prominent persons”.

The target of Minister Zwane’s diatribe, the major banks, are a grouping simply preparing for the FIC Bill to become law since they know it was tabled by the Minister of Finance, having been approved by the Cabinet in the first place and having made considerable input to the parliamentary process. Also they must realize that the Bill in turn will make considerable demands upon them in terms of time and money and will be a test of integrity for all.

Split in the ranks

ramaphosaThe delay, even if for a moment, is one of many factors giving rise to the belief that the Cabinet is “at war with itself”, a fact which Deputy President Cyril Ramaphosa admits. President Zuma attempted dismally at first to distance himself from Minister Zwane’s attack on the banks, then seemingly relented but suspiciously will not let the banks proceed with the FIC Bill by making it law to set up the paper trails.

Commentators say the President is effectively involved in a web of issues involving alleged “state capture” and perhaps therefore instructions to hold up the Bill maybe upon advice from elsewhere from parties involved in the bigger picture.

No stroke of the pen

However, the very act of signing or not will eventually show if it is the President is alone in this matter since a cabinet statement in 2015 stated that the Cabinet had approved for the Bill for tabling.Parliament awaits, holding its breath, for clarification from the Presidency.  President Zuma is now, of course, embroiled on issues over the Public Protector’s report on “stature capture” by the Gupta family and, like so many other important state issues, the FIC Bill has gone on to the back burner.

In the meanwhile others, including actors who would definitely be defined as “prominent persons” as defined by the new Bill, are now crowding the stage and expressing their views, so the FIC Bill must be touching a raw nerve somewhere.

The old argument

jimmy-manyiDespite the Bill being passed by State Law Advisors, now one Jimmy Manyi, previously a corporate public affairs head, a DG in the Department of Labour and previously a Cabinet spokesperson and recently President of the Progressive Professionals Forum – all in a short period of time – has lodged a constitutional challenge to the Bill, presumably on the basis of invasion of rights regarding pr1vacy. 

MPs have complained that the Bill in question has been debated at length over one year at portfolio committee level; hearings were conducted with public expression therefore being accounted for and finally the Bill was passed by a unanimous vote in the National Assembly.  Whether nefarious or not, one must assume that any delay by the President is for good financial reason and bearing in mind the call is in fact an international call to upgrade the SA money laundering watch, the stakes are high.

At this stage nothing is stated as fact and rumours abound.     An exasperated Minister of Finance Gordon Pravin stated in an interview run by E-NCA, “Well if I can’t get the Bill through then we must just try something else.” He added, “They had just better come and arrest me. What have I done?”, he asked.

The aim

pravingordhanIndeed, the parliamentary record shows quite clearly what Minister Pravin has done.    By introducing this Bill and having had it agreed to in the National Assembly, a paper trail  is to be established in conjunction with banks on any suspicious movement of money involving “prominent persons”.   Locked cupboards will be looked into therefore and it seems as if someone or a section in the Cabinet  has had second thoughts about the Bill.

Hopefully, the stall is only temporary and the Public Protector’s report is released

Aims of Bill

Treasury originally said in their briefing to Parliament that the four principal objects of the Bill were to align the country with international standards on AML and to counter terrorist bodies; to enhance customer due diligence within financial institutions; to provide for the implementation of the UN security council resolutions relating tomoney laundering the freezing of assets of persons suspected of financial crimes; and for the FIC to introduce a risk-based approach by financial entities to the current aspects international financial crime.

Treasury countered any argument that dis-investment would be encouraged by the Bill with the answer that a lack of compliance with international rules by South would be worse but now the silence on the FIC Bill seems to have taken a back seat in National Assembly questioning in the face of rows over state funding, “state capture” and individual financial investigative probes.

Prominent persons

yunus carrimMuch debate, took place at the time within the Standing Committee on Finance when the Bill was originally debated over the definition of “prominent persons both domestic and foreign”. These were the persons who were to be monitored as part of the Treasury’s appeal to banks “to know their clients better”. The meetings were chaired by the obdurate, diligent and politically respected Yunus Carrim (SACP) and finally recommended to the House.

Treasury’s Ismail Momoniat was at pains to state to Parliament at the time that “there was no implication or presumption that prominent persons being investigated were presumed to be involved in any financial crime.”

Getting to know you

Probably the provisions most likely to affect entities operating in South Africa are the clauses affecting due diligence. Those that are accountable in terms of the Act will be required to undertake ongoing customer due diligence overviews in order to establish the identity of “the beneficial owner” and a customer’s full identity and whereabouts.

This might be where the problem lies for Cabinet, not necessarily just about the “G people”, as referred to indavid maynier Parliament by David Maynier, Shadow Finance Minister (DA), but which might involve issues of party funding – the sources of which at the moment do not have to be declared to Parliament.

Objective views

As put by Roger Southall, Professor of Sociology, University of Johannesburg and quoted in précis form by Creamer Polity, “The ANC is appropriately anti-corruption in its official stance, and indeed has put in place important legislation and mechanisms to control malfeasance. Equally, however, it has proved reluctant to undertake enquiries which could prove embarrassing.” Parastatals still account for around 15% of GDP, Southhall notes.

Whilst Minister Lynne Brown said she was determined to overhaul all state entities, nobody its seems was ready for President Zuma to assume the chair of the new idea of a State Owned Enterprises Council, meaning that he is in charge of para-state strategy – the policy of which was announced many months ago in that government wants a greater slice of the R500m spend on goods and services to go to emergent suppliers.

President Zuma said in Parliament on that issue that the reason for the consolidation was to bring about cross-cutting coordination as a policy within state utilities.

Getting control

Southall continues in his article in similar vein, “The ANC continues to regard the parastatals as ‘sites of transformation’ with certain corporations distributing financial largesse to secure contracts and favour from government. However, their success in so doing is hard to prove given the secrecy of party funding. Secondly, ANC politicians at all levels of government have sought to influence the tender process in their favour.”

On the good side, the Department of Public Service and Administration has, for instance, a draft a Bill underway for Parliament that will require all government departments to put in place measures to prohibit employees and those in special consultancy positions from “directly or indirectly” doing business with government.

Furthermore, the Public Finance Management Act, signed by President Zuma, has proven to be a well-tuned tool to control misdirected state expenditure. The FIC Bill will be the anchor legislation needed to dig deeper into AML money movements.

Who blinks first

fic-bookWith the FIC Bill, the next move then must come from the Presidency, if he remains in  office, to give good reason to send the Bill back to the Parliament despite the agreement of the South African banking system to comply with Treasury requirements to report. This is a day-to-day developing issue.

Quite clearly, some banks have forestalled their problems by refusing to handle certain business banking accounts of “prominent persons”, perhaps pre-empting that the Bill would receive Presidential assent and thus earning the ire of Minister Zwane “in his personal capacity”.

Whether the FIC Bill might get further to the very roots of the party funding system is another matter but for the moment the focus was on “prominent persons” and the necessity to get the banks into action in terms of the law.

Meanwhile, the Portfolio Committee on Trade and Industry will continue to debate the “Twin Peaks” legislation which will again tighten up on banking and financial procedures on both regulatory and prudential aspects. But here again, there might be delays.

Previous articles on category subject
Red tape worries with FIC Bill – ParlyReportSA
Parliament, ConCourt and Business – ParlyReportSA
PIC comes under pressure to disclose – ParlyReportSA

Posted in cabinet, Finance, economic, LinkedIn, Security,police,defence, Trade & Industry0 Comments

Justice changing face of small claims courts

Small claims courts doubled…..

legalDeputy Minister of Justice and Constitutional Development, Mr Andries Nel, in his budget vote speech, gave an update on small claims courts in the country, stating that there were now 277 such courts as distinct from 120 in 1994 mostly in white and urban areas.

He told parliamentarians in the portfolio committee on justice that this meant his department was now more than half way in achieving the objective of having one in each of South Africa’s 393 magisterial districts countrywide.

These courts, he said, eliminate time-consuming adversarial procedures before and during the trial thereby providing speedy and cost effective justice, especially for the poor, he said, and a further nine had been established in June 2013.

Judgements made vastly increased

The number of people enjoying the benefits of access to justice through small claims courts “has increased steadily from a period in 2008 when 95,569 new cases were registered, 47,168 summons were issued resulting in 38,257 trials and 22,397 judgments and 9,405 out of court settlements”, he said.

“Meanwhile, the number of summons issued has increased by more than 21,137 to 68,305 and the number of trials also increased by more than 11,788 to 50,045.  Most significantly, the number of judgments jumped by 62,3% to 36,368 and the number of out of court settlements by 102,9% to 19,087.”

What is also notable, said deputy minister Nel, is the number of commissioners presiding over small claims courts and these have almost doubled in the past four years from 811 in 2009 to 1,546 currently. “However, this comprises 1,314 men and 232 women” and he added that serious attention is being given to the gender imbalance.

Equality court system running well

He also mentioned equality courts dealing with racism, sexism, xenophobia and related intolerance under the Promotion of Equality and Prevention of Unfair Discrimination Act, every high Court and magistrates court being designated as an equality court, 619 matters being dealt with for the 2012/13 financial year.

Deputy minister Nel also noted a “dramatic story of transformation” in the sheriff’s profession. In 1994 there were 475 sheriffs. An overwhelming majority of 400 were white men and there were only 40 African men who were located mainly in the so-called homelands

“In 2012 this picture started to change significantly with the appointment of 124 new sheriffs, 64 who were African. A further 120 vacant sheriffs posts will be filled by the end of June this year”, he said.    He thanked the South African Board for Sheriffs under the leadership of Mrs Charmaine Mabuza “for their good work”.

Posted in BEE, Justice, constitutional, Public utilities, Security,police,defence0 Comments

All not well in the trucking industry

Call that corruption exists

trucksIn answer to a call made by the portfolio committee on transport on the state of the trucking industry in South Africa, it became evident from responses by the department of transport (DoT); from the Road Freight Association (RFA) and examples given by an independent small operator, that large truckers dominated in an industry in an unfair manner that was rife with corruption.

Mawethu Vilana, deputy director-general DoT, said that going back to 2002/3, the department had begun an exercise to look at how to provide opportunities and also broaden the space for participation by smaller operators in the road freight sector. It became clear that smaller entrants lacked finance; that an “unscrupulous broking sector was part of the industry” and generally there was a lack of skills and know-how in the trucking industry generally due to poor provision of training facilities and an industry which was undercapitalised except but a few large operators.

DOT not playing proper role

Vilana admitted that when it came to black empowerment opportunities, the main player was the department of trade and industrydot logo (DTI) and not DoT, DTI having the BEE verification control system in their court, DoT playing virtually no part in either reform of the industry or the development of SMME’s.

On the subject of crime, little could be done about bribery and corruption, Vilana admitted under questioning by parliamentarians, unless legislation was beefed up with proper powers and a full, properly constituted investigation carried out into the industry.

Road users must pay

roadsHe also admitted that permit fees were high because of the principle of “user pays” which had been adopted by government “since road truckers caused great damage to the road system.”

Gavin Kelly, RFA said his association had 385 members, with 109 affiliates and 40 associates representing different levels of possible enforcement and ability to develop skills and training but complained of massive permit fees (the last being 412%); large levels of corruption amongst government officers and no value being added by the government’s road agency to the industry in general.

RFA also stated that there appeared to be no proper government road freight strategy and single government officials determined policy without ministerial approval.    Kelly said “no real consultation exists between the state road agency and the industry” and it was the RFA view that DoT “was just going through the motions.”

Trucking group says market closed

One medium sized operator, Tramarco, said that despite heavy investment in trucks and bearing in mind the “ever rising price of

tramarco site

tramarco site

fuel”, it was almost impossible to break into the transport business to obtain long-term “tangible” contracts from major mining groups and state utilities.   They appeared to feel “safer” using old contacts and larger companies and quite clearly favours were being granted, they said.

Their spokesman said that the entire industry was dominated by a number of large trucking groups and smaller entrants were effectively “locked out” of the industry because the industry was either not regulated properly.

AARTO somewhat dubious

They also said the licensing AARTO system was not working properly; there was a lack of legislative enforcement; too many corrupt officials had too much power and there appeared a lack of interest by large companies generally to uplift smaller operators, little interest in encouraging training and building the trucking job market.

Tramarco said that no favours or finance was called for by the medium and small sized companies but merely a fair chance to compete for tenders.   They called on government to provide leverage within its own government departments, state utilities and with industry to break up monopolistic habits and encourage more black empowerment opportunities.

“Large groups and utilities make lots of statements on freeing up the market but nothing happens”, Tramarco said.

MPs demand better skills development

MPs demanded of DoT that concrete steps be taken to assist small entrepreneurs and to provide proof of a record in the area of skills development. “It was clear that little had been done by the DoT in this area”, said one ANC member.

Opposition members said they were convinced that DoT “had no meaningful understanding of what the situation was on the ground.” One MP said the City of Cape Town had provided a solution by cutting the bigger contracts into smaller parts, supplying smaller quantities and increasing the number of entrants slowly. He called on DoT to start thinking of similar solutions on a national scale.

Roads to nowhere

Ruth BhenguChairperson Ruth Bhengu told DoT that the meeting had been called because an examples had been given to parliamentarians whereby “large companies gave small companies short-term contracts and rates that would not take them anywhere and businesses that were desperate could not only pay for their trucks but could not maintain them, the business going ‘broke’ as a result”.

There was also an immoral business broking sector emerging, she felt.

Vilana of DoT said there was nothing government could do to protect such entrepreneurs and that this was the nature of the industry which was high capital risk with a road system that was deteriorating.

The committee found this all very unsatisfactory and called for further meetings with DoT stating that these matters had to be resolved and that the challenges facing the trucking industry were to be investigated further. Also cross-parliamentary meetings with public enterprises and trade and industry committees were to be called. DoT was told it would be re-called for further reports.

Further archived references

http://parlyreportsa.co.za//public-utilities/aarto-amendment-bill-gives-back-up-to-road-law/

http://parlyreportsa.co.za//finance-economic/transport-laws-bill-on-e-tolling-amended/

Posted in Finance, economic, Mining, beneficiation, Public utilities, Security,police,defence, Transport0 Comments


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