Tag Archive | parliament

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, Home Page Slider, Justice, constitutional, LinkedIn, Security,police,defence, Trade & Industry0 Comments

Parliament embroiled in state capture

State capture emerges as a fact  …

An impression might have been given recently that parliamentary meetings only occur as and when e-NCA cherry picks a meeting for the evening news on the subject of state capture.   Therefore, one might think, every parliamentary meeting is either about the SABC or Eskom, Transnet or Denel.   Nothing could further from the truth.

Although the perverse facts behind the carefully planned act of state capture, involving Bell Pottinger, the Gupta family, their friends and associates, the actual crime in parliamentary terms  is non-disclosure to Parliament committed by public servants in the name of the same “prominent” persons, plus lying and falsification in terms of an oath taken to serve the nation.

Parliament, as a structure, has remained untarnished as the second pillar of separated powers. It is the players who have broken faith.

Hundreds of meetings

This is not to say that truth has always been exercised in Parliament in the past nor to claim that from the President down to backbenchers, all have been unaware that fake news has been fielded in parliamentary meetings.  But what is heartening is that the parliamentary process has been an enormous hurdle for the crooked to overcome.

In any one of the four sessions a year, each roughly equating in timelines to the terms of a school calendar, there are some three to four hundred committee meetings in the National Assembly and National Council of Provinces.

The subject matters covered represent the activities of forty seven government departments, literally hundreds of SOEs and all legislation which is tabled for the Statute Book must be debated.   All this is conducted with two audiences. It is a daunting programme.

Standing out

But soon it was noticeable that it was the meetings on SOEs, particularly those with their own boards and where tender processes were involved, that there was  a common theme emerging.   In each case it was a matter of strategic decisions not being taken to Parliament for approval; balance sheets not squaring up to meet the requirements of the Auditor General and the sudden arrival of newly appointed board members with little or no experience of matters under discussion.

It all stood out like a sore thumb.   Meanwhile, investigative journalism was to become a major force in parliamentary affairs.

In fact it was the parliamentary system that began slowly to reject  the manipulative processes being fielded.  Many an MP started demanding investigative reports from Cabinet ministers with cross-party support;  parliamentary rules were enforced in order to restrain the passage of  mischievous legislation and the pointing of fingers and the use of the kind of language that is only allowed under  parliamentary privilege contributed to the wearing down of the cover-up machine.

To the rescue

Eventually, between the AmaBhungane team and the BDFM team and others such as City Press, investigative journalism saved the day.   It could then be seen in writing that many of the issues so slowly being uncovered in Parliament, where nobody could pierce the web of intrigue and see the picture in its entirety, the full story was beginning to  take shape.

The extent of the theft is still not known and still emerging are new players in the list of “prominent persons”.  There is also still no apparent follow up by either SAPS or the Hawks, nor matters acted upon by the National Prosecuting Authority.

Worse, many do not expect this to happen – so cynical has the taxpayer become and so deep are the criminal waters.  But, as the saying goes, “every dog has its day”.

In the engine room

Despite the bad publicity for Parliament and the institution itself being under fire as to whether or not Parliament is a reliable democratic tool, a good number of MPs, especially opposition members, have been slaving away.     This is despite the appointed Secretary to Parliament, Gengezi Mgidlana, going on “special leave” whilst allegations into his possible violations of the PMFA are investigated.

Mgidlana was appointed as “CEO” of Parliament by the Presidency.     His jaunts overseas accompanied by his wife are the subject of investigation and have been the cause of strike action by parliamentary staff for nearly a year, whilst their own pay packets are frozen.

This matter seems to have mirrored the very issues being debated in Parliament.   Fortunately and most responsibly, the strikes have been orchestrated so as to have little major effect on the parliamentary schedule

Top heavy

Meanwhile, despite the top guy being a passenger in his own system, notices are going out on time, the parliamentary schedule is available every morning and the regular staff are hard at it. Now is the time in the parliamentary diary when the April budget vote is activated; money is made available and departmental programmes initiated.    Hearings have been conducted on many important pieces of legislation.

There is an extraordinary team in Cape Town which runs Parliament, especially researchers and secretaries to committees.

Train smash

Added to this, if it was not enough, a normally busy schedule was further complicated by urgent meetings on poor governance; tribunal findings; briefings for new members of Cabinet and the fact that to match President Zuma’s ever-expanding Cabinet with appropriate government departments there were some fifty portfolio and select committees all being served by a reduced Parliamentary staff.

The extent to which corruption is embedded into government’s spending programme makes parliamentary oversight a difficult and lengthy task, especially when under performance or poor governance matters are involved.   It all reflects the times we live in. In one day alone there  is not enough parliamentary time for a whole range of public servants to be “in the dock” to answer questions on matters involving millions of rand.

No court of law

To be fair, it is often as difficult for the respondent to get around to answering as it is for parliamentarians to get to the truth.  When you know the boss is on the take, how does one answer?   Issues tend to go around in circles.

Sifting out the rhetoric when the truth is shrouded in political intrigue is no easy task in Parliament especially when people are frightened of losing their jobs.

As the millions of rand stolen turn into billions of rand during the early part of 2017 and parliamentary committees were introduced to new “acting” directors in charge of government funding, TV cameras popped up in all corners of the parliamentary precinct.    One was constantly tripping over metres and metres of black cable to caravan control rooms enabling the public to watch the latest saga.

Camera shy

At the same time, Parliament is clearly now being side-lined by members of the Cabinet or avoided by Directors General and this maybe because of this new found public form of entertainment of spotting the good guys and shaming the captured ones.

In the past, the abuse of parliamentary rules by the incumbent President used to be considered as country-boy innocence but now the position has changed.     As any election approaches, parliamentary rhetoric always descends into low grade babble in the National Assembly but this time it is very different.  there is a clear disconnect between Parliament and the President.

With the addition of the now infamous “white minority capital” campaign to the debate, orchestrated ostensibly as we now know from London (as probably was the over employed expression of “radical economic transformation”) most of the forty-seven ministers and deputy ministers hammered out the same slogans in their budget vote speeches 9r at any given opportunity to speak, as if orchestrated.

Looking back: 2nd session

Going back to the beginning of 2016/7, Parliament has ploughed through the Nkandla mess; the SABC crisis; the Eskom governance exposures; the troubles at SAA; the failures and manipulations at Denel; crookery at Transnet; the PRASA scandals and in the losses at PetroSA, the latter being just sheer bad management it seems driven by political desire.

All of this has involved a lot of committee time far better spent on enlightening issues to assist the economy and create jobs. The “blame game” simply led to a jungle of write offs with no explanations but, suddenly, an ill-timed series of cabinet re-shuffles rattled a hundred cages.

D-day

Friday, March 31, 2017 will always be remembered following a period of stun grenades and parliamentary brawling in the House as President Zuma announced yet another set of choices to make up his Cabinet.  In committee meetings, in no less than eight portfolios, new or changed Ministers and Deputy Ministers appeared at meetings with little background.

The second session of the 2017 Parliament had this extraordinary start and on it ending, the arrival of the Gupta emails has now confirmed and named many involved in the whole issue of truthful depositions before Parliament.  No doubt a lot more shocks are yet to come.

The next session of Parliament will represent one of the arenas where the gladiatorial challenge will be played out on state capture together with the battle to avoid fusion in the separation of powers.

It is to be hoped that spring at the end of the third session will herald more than just another summer.

 

Previous articles on category subject
Zuma vs Parliament – ParlyReportSA
Parliament awaits to hear from Cabinet – ParlyReportSA
Parliament goes into Easter recess – ParlyReportSA

Posted in cabinet, Cabinet,Presidential, Energy, Finance, economic, LinkedIn, Mining, beneficiation, Public utilities, Security,police,defence, Special Recent Posts, Trade & Industry0 Comments

Parliament may see delays on Mining Bill

Mining and petroleum bill to hit snags

Overwhelmingly evident is the cloud hanging over the Mineral and Petroleum Resources Development Amendment Bill (MPRDA), linked inextricably to a troubled Mining Charter, some movement on the MPRDA being necessary to restore stability to the mining industry in the form of legislative clarity.

Legislative clarity will also allow the petroleum and gas industry to hopefully go into a development phase.  Here the players need an equal playing field, the State in this case getting a free stake possibly at 20% but paying no development costs since the State now has ownership of the resources.

Free lunches

There is one further possible hurdle on the horizon.      Aside from issues surrounding the Charter, which is technically a non-parliamentary issue, the application of Parliamentary Rules regarding the great number of changes that are being made to the Bill raise procedural issues.

It is indeed a very different Bill to that which was voted through Parliament earlier and passed by the National Assembly.

For the moment, now that provincial opinion on the more recent changes to the MPRDA have been returned,  the provinces each having voted and recorded their nine mandates on the subject, the idea is that the Bill can then finally be returned to the Presidency, possibly via the NA Committee to lodge the changes.

First things first

There is a sense emerging that the offshore gas industry is a little happier with the free carry proposals but on the other side of negotiations it appears, from the media, that the Chamber of Mines is struggling to find common ground with Minister Zwane on the Mining Charter, referred to in the MPRDA but not legislatively part of it.

It is difficult to imagine any Mining and Petroleum Resources Development Act, as amended, being in force without an agreed and new Mining Charter in place. However,  developments in this area will have to be watched.

Last in queue

In the list of Bills before Parliament the MPRDA has been listed last (and therefore the longest under debate) for nearly three years, except for a short period when it went to the President.   This reflects the long tussle involved.

The four major hindrances were the extended negotiations with the offshore petroleum industry on the free carry issue; the fact that President Zuma returned the Bill approved unsigned insisting that it be considered by all nine provinces; issues surrounding what the Minister has defined as “strategic minerals”; the thorny question of mineral beneficiation and the completion of the mining charter, to which the MPRDA refers but remains not incorporated.

Next process

Many more issues have still to be debated, whilst the basic parameters will have to come to a head on the parliamentary “rules of the game” regarding the passage of the legislation itself.    Meanwhile, NCOP hearings on the Bill have been scheduled for the last two weeks of June 2017.

Throughout, the “elephant in the room” for the mining industry has remained the Charter itself which Minister Zwane has stated will be “the most revolutionary Charter ever produced.”

Possible slow down

Meanwhile on the MPRDA, Opposition members will no doubt study closely the Rules of Parliament which state, as was the case with the FICA Bill, that if a Bill is returned unsigned then only the issues for which the Bill was returned may be altered and then only once.

However, unlike the FICA Bill which was returned on the basis of one issue, that of unwarranted searches the MPRDA Bill was returned on the basis of lack of consultation with the provinces.

To amplify, if the President only returned the Bill on the basis that the NCOP and National House of Traditional Leaders had not been consulted, it may be a contested issue as to whether the Bill will be challenged under these Rules. This is a legal issue.

The Legal Resources Centre is quoted as being interested in such a challenge.

Looking ahead

For years, it has been the view of many that both industries that each should have its own “MPRDA”, especially in the light of the fact that both have their own specific and very different Charters.

Whilst crude oil, subsequently refined to petroleum and gas, are certainly natural resources now owned by the State, theoretically the only resources that are ‘mineral’ are those which have a crystalline molecular structure and are “mined”.     This would naturally exclude extracted crude oil and gas.

Two is not one

Consequently, both industries, which fall under two government departments and which are distinctively different from one another, have historically been under one piece of legislation governing all geological resources.

This difference between the two industries is expressed in many ways.   The petroleum industry is centred around its refineries, very much technical industries with ‘upstream’ components in importation and exploration and ‘downstream’ interests  involving distribution, retailing and property interests. Their product is very directly linked to the cost of doing business and the cost of living.

Meanwhile, the mining industry is essentially involved in extraction with massive labour factors, high capital costs, sophisticated export involvements and beneficiation.  Its product is closely linked to the survival of industry in general and is directly linked to GDP.

Legislatively, therefore, one garment certainly does not fit all  –  despite each industry having its own charter.  Inevitably separate legislation will have to be developed but such changes are seen as being down down the road for the moment.

Damaging delays 

Whatever route the Bill now takes in Parliament, any challenge to its progress will be particularly frustrating for investors if there are more delays.    Those issues mainly arise in the mining sector where far more is at stake and consequently rating agencies are flagging Minister Zwane’s actions.  The gas exploration industry is clearly tired of waiting.

The results of three days of parliamentary hearings on the Bill, which have included some side issues such as Shell SA on the future of shale gas and any demands from the House of Traditional Leaders, should prove interesting.

The major issue remains as to what is government policy is on the whole particularly regarding labour  as distinct from just Cabinet ambitions for BEE participation percentages.

Next stages

Most attention will now fall upon the complementary non-legislative document, the Mining Charter, despite the unclear parliamentary situation.   Following the public hearings, the NCOP Select Committee will summate these meetings and the relevant departments will respond over the following days.

Possibly, at some stage, Minister Zwane will address Parliament on the issue to clarify the situation of government’s view and relevant comment on the Bill will also no doubt arise from media briefings by the Ministry on both subjects. For the moment, much of the issue will be dictated by events outside of Parliament.

Previous articles on category subject
MPRDA Bill returned to National House of Leaders – ParlyReportSA
MPRDA Bill to be amended urgently – ParlyReportSA
MPRDA Bill brings changes in BEE and exploration rights – ParlyReportSA
Mineral and Petroleum Resources Bill halted perhaps – ParlyReportSA

Posted in BEE, Finance, economic, Fuel,oil,renewables, Labour, LinkedIn, Mining, beneficiation, Special Recent Posts, Trade & Industry0 Comments

AARTO traffic offences bill on its way

AARTO licence demerit system studied 

…. In what has been a legislative marathon, the update of the Administrative Adjudication of Road Traffic Offences Act (AARTO) has now reached a stage where Parliament has called for yet further consultation with the public. It requires on report on the situation with the e-Natis system, with provider Tasima and to hear from bus fleet owners.

The first draft of the Bill was tabled before the Portfolio Committee of Transport as far back as 2015. Now a stage has been reached where the principle has been agreed to but whether it is practical or possible within existing structures is now the issue.  The next meeting is May 28

Owners & drivers

At the last round of hearings on the Bill after tabling, it was car hire owners and the South African National Taxi Owners Council (SANTACO) who had the most to say. The car hire association told MPs that developments in the pilot areas had reached a stage where hirers had made several vehicles “unlicenceable” because of a build-up of demerit points.

There followed unpractical administration problems for the owner, which they said was not the intention of the law.
Taxi operators, who will need to make returns on employed drivers, said that already had many problems when they found themselves unknowingly registering drivers with false driving details and addresses and which was culpable, resulting in fines for the owner plus receiving a double penalty of receiving demerit points.

Starting from zero

A Road Traffic Infringement Agency (RTIA) is now to be formed which will implement the AARTO system in the next financial year, each motorist starting with zero points reaching a maximum permissible twelve points when the licence will be suspended for 3 month.

The plan now, therefore, is for the new AARTO system to start in January 2018 on a national basis learning from pilots run in Johannesburg and Tshwane.

There are two systems involved. One, the most commonly used, is for driver/owners, the other is for owners who hire drivers, the latter having a demerit merit system based on regulations regarding the condition of the vehicle and driver registration.

The proposed Bill says its aims are to “Strengthen compliance with road traffic laws and payment of traffic fines.”

Black book

The RTIA will run a national road traffic offences register (on a similar basis to the sexual offences register) centralizing all driver infringements and offences, presumably under the umbrella of the centralised e-Natis system.

The Bill describes the circumstances under which offenders are served with a warrant issued by a magistrate’s court. Now clarified in the most recent portfolio committee meeting is the use of registered mail; the necessity to allow for time for postal services to execute delivery and for rehabilitation programmes for habitual infringers and continuous offenders.

DOT told parliamentarians that they have struck a deal with the SA Post Office whereby the issuing authority, whether local or municipal, will be charged a rate of R7.80 for a registered delivery.

Against

Detractors of the Bill have been the Johannesburg Chamber of Commerce and Industry, who say the demerit system will put many companies out of business and will result in “millions of vehicles” being taken off the roads causing labour issues.

AfriForum has brought an urgent application to the High Court. AfriForum’s legal consultant, Willie Spies, told parliamentarians that in their view it would be unconstitutional for a citizen to have to pay to exercise one’s rights, this being their interpretation of the AARTO system.

Spies stated that in many cases offenders will be punished twice for the same offence, this being by both by the courts and by the demerit system. “Nobody can be guilty twice”, he said and added that nobody should be punished by demerit system “when they have done the right thing by paying.”

Spies also said that the Bill “manages to introduce 2,055 new offences but nobody is being punished for reckless or negligent driving which is the main cause of death on the roads.”

At the coalface

The pilot system undertaken along the AARTO lines in Johannesburg and Tshwane was not apparently too successful, as observed by one metro police officer in making a report to the Portfolio Committee.

He said that offenders, when served with a ticket, seemed little concerned that the result would be that they were to be served with a warrant, since experience told them that the system failed to work and there was no judicial follow up if notices were ignored.

The complaining officer said that this particularly applied in the case of parking infringements.

A survey undertaken by the AA and with assistance from fuel company BP was quoted in detail to parliamentarians a number of times, highlighting that there was a vast difference in outcomes between minor infringements such as parking issues; driving through orange or red robot lights; not obeying yield signs and the more serious infringements of drunken and negligent driving. It was hoped, the report concluded, that the de-merit system would reflect this difference.

Bad culture

The survey results also indicated that 76% of South African drivers commit some sort of traffic offence on a regular or even daily basis indicating a systemic disregard of road traffic laws in SA. AA as a result appealed for early implementation of a demerit system to improve road safety.

The view of many parties to the hearings was that to include parking infringements in terms of the AARTO system would have little effect in improving upon road safety. AARTO, later in question time, qualified this by saying that municipalities and local councils face the costs of enforcement of any system and this had to be underwritten with multiple revenue sources, whether parking infringements or not.

DOT confirmed in the meeting that it had not only signed an agreement with the SA Post Office for all registered mail to be delivered at R7.80 a letter but this would apply to all the approximately 300 local councils and municipalities

They also advised that DOT would supply a AARTO system-training team that would visit all councils and municipalities and it was confirmed that AARTO would adopt both e-mail and text message systems for notification of fines/infringements.

Stationery and ticket books are now to be printed on a six-month lead basis, they said. DOT confirmed that there were still “challenges” on cross-border matters and that the Minister was dealing with such issues.

Down the line

ANC MP Mtikeni Sibande expressed disquiet that local councils might not be able to implement the AARTO system in the near future for any number of reasons leading to the possibility that the system would work in some areas and not in others. The Chair said they could only be concerned with the legislation, not how government did their work.

Finally, it was agreed that the Bill was nearing the point where it could go forward to the National Assembly for voting but MPs agreed that it might be wise to hear from more affected parties such as bus owners, even though hearings were now finalised.

MPs agreed that they would meet further after the recess to hear the results of the High Court case on the subject and the matter of the contract renewal of previous AARTO operating company, Tasima (Pty) Ltd, and whether the e-Natis system was yet fully under the control of DOT.  The meeting is due 28 May.
Previous articles on category subject
E-tolling: OUTA takes it to Parliament – ParlyReportSA
AARTO draft Bill on licence demerits for comment – ParlyReport

Posted in Fuel,oil,renewables, LinkedIn, Security,police,defence, Special Recent Posts, Trade & Industry, Transport0 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, Home Page Slider, Justice, constitutional, Mining, beneficiation, Public utilities, Security,police,defence, Trade & Industry, Transport0 Comments

Parliament goes into Easter recess

….editorial….

Now you see it, now you don’t

……    It has now become almost impossible to avoid the use of the time-honoured expression “politics aside” when following legislative developments in Parliament.

The body politic affects most things all the time – from drafting a Bill to a
government media briefing, from debating a departmental investigation to public hearings on new legislation. It all involves the ideology of who is in charge.

In fact, the Oxford Dictionary describes “politics’ as follows: the activities associated with the governance of a country or area, especially the debate between parties having power.

From this one can see how politics will always continue to dominate government policy, legislation, and the parliamentary process, since in the end all permeates down from Cabinet decisions. That’s the way it works. Until of course the moment occurs that corruption, cronyism and state capture dictate the parliamentary process itself.

Then the fine line between policy and politics gets rather tacky. Shady motives such as personal gain or protection from the law become evident. What started out as well-meaning policy can get warped by politics and the passage of legislation becomes erratic, if not unconstitutional.

Coded language

Clearly there are now two Cabinets in South Africa. Also, there are various government departments that tend to follow one faction or another, all reporting to their respective portfolio committees. Of these, some seem to adhere to parliamentary rules on oversight and others seem to be less deep in their probing.

This explains why Jackson Mthembu, Chief ANC Party Whip who conveys ANC messages to the party loyal in Parliament, plays such a critical and pivotal role.

When it becomes ‘a given’ that those in control willfully use the top-down structure to their advantage and become joined at the hip with the party list system, then the decision to follow the orders of the party begin to involve a fear of being unable to pay the school fees or pay the lease on the recently acquired BMW.

It is the party list system that is our constitutional blind spot. It encourages cronyism, defined once again in the Oxford Dictionary as: the appointment of friends and associates to positions of authority, without proper regard to their qualifications.

No change

When this aberration of the democratic process occurs on a regular basis, the expression “politics aside” seems to come back into usage. This time for a different reason.

Understandably, one cannot go through the whole laborious process in every debate and with every turn of inexplicable behaviour explaining the manipulation of facts or non-disclosure of relevant information; the influence that certain business persons have upon policy decisions; or the behaviour of state department heads who seems oblivious of their duties.

Therefore politically-correct shortcuts become necessary in order that one’s own opinion is not involved. It’s a sort of coded language that straight up and down people use as a replacement for the real thing.

So, politics aside, President Zuma is still holding up the Financial Intelligence Centre Bill to combat money laundering. Politics aside, Minister of Mining, Mosebenzi Zwane, is still attempting to get fifty-six changes adopted under the already approved Mineral and Petroleum Resources Amendment Bill and, politics aside, the Expropriation Bill is back with Parliament once again.

The good news

Far more interesting is that, politics aside, the separation of powers is still working to a greater or lesser degree; the legislative process is still being respected by most and irritating some; and the Constitutional Court is still out there as our standard bearer, minus a number of computers.

 

…. and, politics aside, we could be doing so much better.

editorial.... parlyreportsa....27 march 2017

Posted in cabinet, earlier editorials0 Comments

Barnes prepares SAPO for SASSA

Modernising SAPO a culture change

….. sent to clients 27 February…. Stage by stage, Mark Barnes, Group Chief Executive Officer of South African Post Office (SAPO), appears to be reforming cultures and cleaning out “ten years of decay”, as he put it to the Portfolio Committee on Telecommunications and Postal Services.

“The years 2017 and 2018 could be our years”, he said, “especially if the Cabinet smiles on a SASSA deal. We have the reserves to do this thing.”

Introduced by Minister Siyabonga Cwele, Minister of Telecommunications and Postal Services, on the utility’s presentation on its corporate progress report and prospects for the third quarter, CEO Mark Barnes claimed that SAPO is becoming profitable; is well capitalised and the long-awaited corporatisation process is back on track with many of its labour problems sorted out.

Up and away

When introducing him to new members of the committee, the Minister said that for the last few years SAPO had been facing many challenges, but CEO Barnes, with a new Group Chief Financial Officer, “had put SAPO on the road to recovery”.

Because of its struggles with old systems of the past, digging it out of financial mismanagement and the need to pay urgently its creditors, SAPO was given a cash injection from the State.   The Minister said this was a good decision.  In 2017 SAPO was starting to focus on new businesses, with part of the strategic planning focused on the internet. One of the key goals was corporatisation, the Minister concluded.

New world

Mark Barnes described the position when he took over the reins to save the utility from “self-inflicted suicide” was far worse than was originally thought. He described a process whereby he had to send specialised “swat” teams into each major sorting complex starting with the large Johannesburg complex and eventually to other major towns and cities.

It took months, he said, to “clean up the mess and try to establish order out of chaos”, a good deal of which had been caused by the extended postal strike but mainly poor systems and management disinterest.

The delays caused by basic simple clean-up housekeeping held the initial  financial assessment back whilst the physical clean-up operations, after years of neglect were undertaken, he said.   The “swat” teams eventually established what SAPO assets had and where they were located.

First audit

He said, “I hope this is the last time I refer to ‘the past’ but we are having a mock audit in late January 2017 to establish remaining areas of wasteful expenditure, something that was not even thinkable of last year.”   He said, “The main issue is that SAPO has established an air of confidence and that confidence has reached a point where the rest of the journey becomes a worthwhile investment.”

In answer to criticism from Shadow Minister Cameron MacKenzie (DA) who said that “this SAPO report is being prefaced by the same remarks as before” and who added that it “was the same story of promises made last year but re-hashed”, CEO Barnes made a rebuttal. He retorted that “It is a mistake to take just a superficial look from the outside. Internal organization is being achieved and we haven’t had time to wave flags.”  He gave a long list of what had been achieved.

Heavyweights in saving banking

On savings, Barnes noted that SAPO serviced some 6 million customers with 2,486 outlets and reached out where no established banking services existed. “Compliance is now in place on banking procedures with the SA Reserve Bank  and we are seeking approval to establish the promised SA Postbank Limited with CIPC,  applications being submitted before July 1 2017.”

Postbank’s depositor funds were now standing at R4.9bn, having increased by 128m. Postbank itself had invested R7.3bn, he said.  Payables, Barnes also said, were reduced by R531m and the group met liquidity and solvency standards. The Post Office is backed by a R4.2bn Treasury guarantee.

 An overdraft of R270m had been repaid and R17m had been realized from the sale of pointless property holdings. Rental from existing tenants had increased and a more suitable and less expensive head office was now being targeted. He said he was always trying to get officials out of their old mindset about SAPO and to realize they were in business.

Major cut backs

On the labour front, there were 18,000 less staff this year, Barnes said, “brought about by a process of natural attrition” and it was hoped to transfer a large portion of a “hopelessly overstaffed head office” to operational duties.

If operational revenue failed to provide the necessary improved results in the short term, he said, then a retrenchment programme may have to be negotiated. “It will be tough but that’s how it is. The unions are aware of the long-term planning processes that have been undertaken and the alternatives understood”, he said.

SASSA a target

CEO Barnes expanded on the possibility of SAPO handling all payments of SASSA grants in the light of the volumes of “points of presence which amounted”, he repeated, “to approximately 5,000 counter points  Postbank is also to make an application to government to both handle all government mail business and a submission to SASSA in the very near future as current hiatus evolves.

He said that they had been talking to National Treasury on the savings to the national fiscus that could be gained. It was agreed that it would take much to achieve this possibility but was highly “do-able”.

He said Postbank had sufficient funds of its own to capitalize such a venture with IT networks and training should the security of such a contract be awarded. He commented that ordinary mail had dropped to 50% of original volumes due to the advent of electronic mail.

“This sea change in the way that the world now communicates had found the original management of SAPO completely at a loss on what to do”, he said, “and the decision had  apparently been to do nothing.”

Diversification from snail mail

The plan was now to diversify into courier services probably with a partner and to focus on selling Postbank services at package rates to corporate business.  

So far, four offer attempts had been made to “buy in” as partners, CEO Barnes said, all four of which had been found totally unacceptable.  There had been an obvious attempt in all cases just to acquire Postbank’s extensive national footprint as if a possible merger of interests was a fire sale, in each case contenders having given no consideration to the idea of what “was in it” as a revenue source to Postbank.   All propositions were  rejected out of hand.

Barnes told Parliamentarians, with the Minister still present at the portfolio committee meeting, that e-commerce in the form of public hubs or malls to the SADC area as well as locally will become a major revenue base for SAPO especially in lower income groups.

Generally, on all fronts, 22 significant projects had been approved, CEO Barnes said, with a further 9 in the project stage; 4 projects were in the procurement stage and others in testing and feasibility stages.

Transport more agile

As far as the transport book was concerned, SAPO  had decreased its annual expenditure   by 30% by exercising rationality and purchasing new vehicles cutting down on maintenance and repairs to old vehicles, Savings were also achieved by boosting efficiency with “a more agile logistics mind-set.”

The overall corporate plan forecast is mixed, Barnes said, and whilst revenue has declined significantly on a net basis, which was expected and planned for whilst SAPO re-grouped and cut out unprofitable exercises, it will still meet its corporate plan targets and “looked headed to be back into the black by a small amount in 2016/7”, said Barnes.

When it came to the balance sheet, he remarked SAPO still has an extremely large amount of debt which needs to be paid. However, it was important to note that the entity was now solvent and could pay. It also had liquidity in cash of its own available for development.

The big plan

He told the Committee that the key to SAPO’s future was the corporatisation of the Post Bank, with approval to establish the bank being granted by the SA Reserve Bank in July 2016. Preparations were currently underway to submit for registration in February 2017 as a South African Postbank Limited entity with CIPC.

The Postbank staff, operations and balance sheet will transfer from the Postbank division to the new entity after the incorporation process. The Postbank will allow for broader financial inclusion for all South Africans and it has the capacity to do this, he said.

SAPO, he said, had a relatively sophisticated E-commerce infrastructure with a large footprint which allowed it to facilitate speedy connections and deliveries. This, combined with the ports, vehicles and the access SAPO has at airports could make SAPO the E-commerce hub for Africa.

Ms M Shinn (DA) asked whether anything had been done address the security of IT systems and whether SAPO had the money to recruit and retain cyber-security skills. Cameron MacKenzie asked for more information on the SASSA bid.

Biometrics needed

Outsourcing was now underway and tenders being called for on biometrics, CEO Barnes said, which was the only route to stop fraud, duplicated payments to persons claiming or withdrawing twice under different names; to follow world trends and to get SAPO into the future to serve the nation as it should. Such was necessary if they were to handle the SASSA account which would be a great achievement and was the correct thing to do.

He said that partnerships in the IT sector were very likely to be sought as well as outsourcing, as SAPO, given its size and history, was not going to be able to keep up with the latest developments in the IT sector, nor would SAPO wish to be that expert, he said. Their focus was to get into courier work and banking, not IT. So, partnerships were going to be needed on the right terms.
He said that there had been half-expected problems with the data centre and disaster recovery this year as new equipment was being added to old. Repairs had been undertaken and there were negotiations underway to outsource the work of the data centre.

CEO Barnes said motor vehicles licence renewal processing was up by about R7m transactions in the year but this figure was coming from a very low base.

Money, money, money

In response to the question of when was SAPO likely to return to profitability, he re-confirmed that SAPO expects to start trading profitably during the 2018 financial year.

On complaints from the DA that SAPO still needed help from Treasury, Barnes explained that it was the nature of a turnaround situation not use cash in hand for the wrong things. Working money was one thing but depositor’s funds and reserves were a completely different issue, he said, and these were the security needed for developmental issues to get SAPO off the starting block.

He said whilst corporates have replaced SAPO with other service providers, they are a lot more expensive to hire. “SAPO is a low-cost producer and the only reason people turned to the alternatives is because SAPO became a dysfunctional low cost producer.”
“This is changing”, he said, “and we have to change the corporate customer mindset to show that we can do things again”.
Previous articles on category subject

SAPO – one big bungle at taxpayer’s cost – ParlyReportSA

Posted in Communications, Home Page Slider, LinkedIn, Public utilities, Trade & Industry0 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, LinkedIn, Security,police,defence, Special Recent Posts, 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, Special Recent Posts, Trade & Industry0 Comments

Credit regulations to squeeze racketeers

Debt relief and credit under microscope

… sent to clients 22 Dec 2016…. Further powers for the National Credit Regulator to regulate against reckless lending have been reaffirmed as necessary and the subject of debt relief for needy persons considered.

This conclusion was the result of a series of hearings conducted by Parliament and criteria are to be developed for the application of debt relief measures and how this could be achieved are now being studied.

Such criteria could include target groups of debtors who would be eligible for the relief; the period in which the measure would apply; the type of debt that would be covered and how the measure could be implemented.

An earlier study, commissioned by the National Credit Regulator (NCR) some months ago, concluded that there was a need for the National Credit Act to make provision for the introduction of some form of national debt relief but the NCR decided to consult Parliament and to involve public input.

Growing debt bubble

Whilst reckless lending and irresponsible borrowing which led to the disastrous housing bubble in the US, Joanna Fubbs, as chairperson of the Portfolio Committee on Trade and Industry, acknowledged that the situation regarding any retail debt bubble is not as bad in SA.   Nevertheless, she said that for some time she has been concerned that the National Credit Amendment Act is not working in the best interests of vulnerable groups.

On the issue of debt relief, whether from reckless lending or not, it was agreed some time ago by the Committee that it was important for stakeholders to be consulted to establish a better picture.  A parliamentary select committee, chaired by MP Eddie Makue of the same Committee, was formed to investigate whether debt relief would be an acceptable policy for SA and to organise parliamentary hearings focusing on banking input and debt control aspects.

The brief

The Portfolio Committee also recommended to this subcommittee that there needed to be a better understanding between the excesses of lending, the plight of borrowers and a view established on regulations which should refrain from fostering any culture of not paying debt in the hope that it might be written off.

Meanwhile, it has been proposed by the Department of Trade and Industry (DTI) to extend the powers of the National Credit Regulator to conduct proactive investigations into reckless lending . They would also be asked to impose administrative fines and to empower the Minister to provide debt relief mechanisms through further regulations, yet to be drafted.

Also, NCR submitted that it had already laid out its own proposals to tighten up existing regulations and penalties for perpetrators of reckless lending which the Regulator was currently entitled to enforce under the Act but the views of the Regulator were to be sought on debt relief by Makue’s Committee.

DTI view

DTI has since confirmed to this Select Committee that it was their view was that the Minister of Trade and Industry, Rob Davies, should be given the power to prescribe debt relief measures, the nature of which must be carefully thought through . At the time, DTI acknowledged that banks and credit providers had to make their views known preferably in a series of hearings now conducted.

NCR view

National Credit Regulator, Nomsa Motshegare, has confirmed to the Select Committee that in their view some form of debt relief is necessary given the reasons of the country’s slow economic growth; retrenchments that were taking place; and rising unemployment figures.

In general, she said, these factors had already diminished household income and led to difficulty for consumers to repay loans.   The NCR had found, they said, that there was a willingness in general amongst banks to find ways to relieve the financial burden of indebted clients, many of them stating that they did this already, but there was considerable doubt on whether this should or could be backed up by any enforcement measures and regulations.

 The banks

In this regard, during further public hearings, Cas Coovadia of the Banking Association of SA (BASA) emphasised that legislated debt relief for all would have negative consequences since this was far too prescriptive. He  called for “a customised debt relief approach that would suite various portfolios” as a better principle to follow.

At the outset of the discussions, Coovadia stated that BASA did not support the principle of debt forgiveness as an objective.  One of the banking system’s foundation principles, he said, was the need to efficiently and legally lend money to borrowers and to collect repayments from borrowers to settle the loans.

He told parliamentarians. “A confluence of pricing, regardless of individual consumer risk, will arise at a portfolio level to offset the inability to price for the risk.    This will mean that consumers who have a good repayment history will no longer be rewarded for such behaviour when they apply for further credit.”

He warned that blanket debt forgiveness would accelerate irresponsible borrowing and said all banks offered means to repay and gauged the circumstances when lending.   Any failure to perform on this principle would have severe consequences for the industry and economy; would increase risk to depositors/savers; would impose a cost on society; and would limit credit providers’ ability to extend credit, he said.

Making a plan

Nedbank said that the option of rehabilitation was always a preferred course rather than hard legal collections and the bank had recently adopted a philosophy in general banking terms that to become proactive in terms of debt relief solutions was the far better solution for those who had over-extended themselves.

They said the situation between credit provider and consumers should remain “mutually beneficial”, which principle bore in mind that the economy of the country was less affected.   Nedbank confirmed that a satisfactory low, in their view, of 4.6% of their clients could be classified as technically in total default without the any possibility of rescue, as at the end of 2015.

Too prescriptive

Individual banks, such as Standard Bank, Absa, First Rand, Capitec and African Bank generally supported BASA’s view that prescriptive laws or regulations regarding lending, collection and debt relief would remove the principle of case by case treatment which in turn, they said, would probably inhibit loans being granted or drive up their cost

Debt and labour

Chamber of Mines was blunter and took the view that employee over-indebtedness was a major problem in labour relations and “fed into unrealistic wage demand” scenarios.  Indebtedness, they said, was one of the major catalysts in recent mining unrest.

They were clear that education on family accounts and the implications of over borrowing had to be stepped up, rather than complicated prescriptive measures on relief that would favour one and not the other.  More important they said was that loan sharks should brought under control and whose malpractices were rife amongst the mine working community.

Ms Sue Fritz, speaking for the Chamber, said that any form of debt relief provisions must consider the danger of undermining the basic principle that with the ability to borrow came the understanding such debt had to be repaid or quality lending would cease and debt might increase.

Cosatu view

Cosatu’s Matthew Parks urged that some form of debt relief be provided to a defined base of categories, such as retrenched workers; those only on social grants; the poor; working-class and middle-class students with student loans and borrowers who had paid off a large part of a loan but fallen on hard times. He also appealed to parliamentarians that there was a need to crack down on loan sharks, formal and informal.

Paul Slot, speaking as president of the Debt Counsellors Association, said some form of debt relief was necessary to counter the current high level of household debt, noting that according to the association, 54% of those in financial trouble simply applied for more debt to extricate themselves.

Conclusions in process

The Select Committee has now made a call upon on the National Credit Regulator to tighten regulations further on loan sharks and the registration process.  Chairperson Eddie Makue has now reported back on the hearings to the Portfolio Committee but has noted in Parliament that he was deeply concerned that a large amount of vulnerable people remain exposed to unregulated credit and can become victims purely because of greed alone on the part of the lender.

On reckless lending, it was noted that often ridiculously high repayments from the poor were a weapon used to gain control of assets.    Makue said, “The NCR has to protect poor South Africans against such lending by unregistered and immoral micro-lenders.   In most rural and semi-urban areas people maintain their existence through borrowing and the interest they sometimes get charged is shocking, and interest rates should be capped by law”, Makue said.

State debt relief and debt relief regulations

The “jury is still out” therefore for 2016 on the issue of DTI tabling a Bill and the subject of debt relief generally.

Parliament closed 7 December and will resume this debate early in 2017

 Previous articles on category subject

National Credit Act Bill aims to help consumers – ParlyReport

Treasury proposals on debt control approved – ParlyReportSA

National Credit Amendment Bill changes – ParlyReportSA

 

Posted in Finance, economic, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Medicinal use of cannabis makes progress

Medical Innovation Bill and cannabis

..sent to clients 18 Dec… Dr Narend Singh who took over the tabling of the Private Members’ Medical Innovation Bill from the late Dr Mario Ambrosini, said that he was so impressed by the progress of the Department of Health (DHA) in their support of the use of cannabis for medical purposes that he could see the possibility arising where he could withdraw his Members’ Bill in favour of broader legislation tabled by the Minister of Health.

He said “there was light at the end of the tunnel” and he himself was on a “high” to learn from Dr Joey Gouws, in charge of regulatory and legislative enforcement at DHA, that regulations on the growing of cannabis, manufacture, dispensing and medical use for medicinal purposes could be in place by the end of 2017 including registration processes and classification systems.

Holistic approach

Dr Gouws was briefing the Parliamentary Portfolio on Health on progress towards the commencement of such a programme and which not only covered the medical use of cannabis as proposed in the Medical Innovation Bill but covered research, registration, manufacture and the scheduling of substances.    Separate legislation would be in parallel amending such Acts as the Drugs and Drugs Trafficking Act.

Regulations were a draft form stage in authorising permits for use by practitioners, analysts, researchers or veterinarians.      In fact, said the DHA team presenting the update to parliamentarians, it might be possible to see certain herbal products with limited THC levels available within three months.

 Worldwide

Dr Gouws said that in the United Kingdom similar legislation, to be enacted, provided for innovation in medical treatment and allowed medical doctors to depart from medical treatments for a condition but the UK Bill did not specially address the use of cannabis. In South Africa, it will be allowed for under specific prescribed conditions for the treatment of certain medical conditions and for education, research and analysis.  Similar legislation in Australia and Canada had been studied.

Patients that are proposed for eligibility are those with severe pain, nausea, vomiting or wasting arising from cancer and HIV/AIDS, including treatment. Muscle spasms and severe pain associated with multiple sclerosis and seizures from epilepsy where other treatment options have failed or have intolerable side effects. Severe chronic pain is included as part of the proposals for indications.

Crop trials completed

The Department of Agriculture, the DHA team said, has justMedicines Control South Africa forwarded the outcome of cultivation trials at four agricultural research facilities jointly overseen by both departments. This would now be disseminated and assessed, which results would form part of the ongoing research by the Medical Research Council and other academic research centres involved in the future clinical use of cannabis.

Currently, cannabis is listed as a Schedule 7 prohibited substance but regulations will shift this towards Schedules 3-6 which are prescription-only medicines with authorised prescribers.   Scheduling decisions involve levels of toxicity and safety; the proposed indication for a substance; the need for medical diagnosis before prescribing; the potential for dependence, abuse and misuse and access disciplines.

Certain cannabis products are prescribed at present but unregulated illegal herbal cannabis, Dr Gouws said, which is grown incorrectly and bought from the black market will have unknown concentrations of THC’s and cannabinoid concentrations combined with potentially harmful ingredients.   Cannabinoid drugs currently used are Dronabinal for loss of appetite during severe illnesses, Nabilone for nausea under similar conditions and Sativex for spasticity.

Conditions of use

If legalised, it will be proposed that objective evidence to support the proposed use of cannabinoids in whatever regulated form must be provided; the manner and duration of treatment provided; a patient must be monitored to ensure efficacy; the treatment outcome reported upon; the physician involved must be a specialist and informed consent by the patient or legal representative obtained.

In questioning the DHA, parliamentarians were particularly concerned that appropriate measures amending the Drugs and Drugs Trafficking Act, the criminal Procedure Act and the Medicines and Related Substances Act were undertaken. One MP remarked that there must be no question of unintended consequences with law enforcement processes in order that criminal procedures under certain circumstances involving cultivation, marketing, administering and research can be clearly separated and easily understood by the South African Police Service.

Dr Joey Gouws said that this matter had already been investigated and the issues involved were with the State Law Advisor at this very moment. It appeared that they were satisfied. The framework for medical use and research had also been submitted, which also included the licensing of growers using controlled cultivation methods for medical, scientific and research purposes. There were various cultivars of cannabis which had different medicinal properties, she said.

Quality controls

The framework being worked to by DHA also includes reaching a standardised, quality assured product for medical use indications, bearing in mind that clinical decision-making in terms of Section 22A(9)(ii) and Section 21 of the Medicines Act must be made to the scheduling of products, Dr Gouws said.

For a while, Dr Joey Gouws said, cannabis as a medicinal drug for pain may remain as a Section 21 drug as things exist until all regulations were in place and registration and classification complete, so that the use could have a controlled start.  Herbal classifications may be allowed far earlier.

ends

 

Posted in Facebook and Twitter, Health, Justice, constitutional, Land,Agriculture, LinkedIn, Security,police,defence, Special Recent Posts0 Comments

Hide and seek over R14.5bn Ikhwezi loss

Facts on Ikhwezi loss held back

…sent to clients 12 Dec… In the first of several meetings of the Portfolio Committee on Energy regarding Central Energy Fund’s Ikhwezi Project, chairperson Fikile Majola has agreed with ANC MPs and Opposition members to reject the Department of Energy (DOE) report on the PetroSA impairment or write-off amounting to R14.5bn.  Continue Reading

Posted in Energy, Finance, economic, Fuel,oil,renewables, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments

FICA Bill : Hearings on legal point

President Zuma vs Parliament on FICA Bill

…..editorial……The convoluted thinking that is taking place in South Africa to avoid the consequences of the law has once again become evident in the ongoing battle between the Presidency and the Standing Committee on Finance with the return  of the Financial Intelligence Centre Amendment (FICA) Bill  by the President to Parliament and therefore unsigned into law.

Worried by warrants

The President claims that for representatives of the Financial Intelligence Centre (FIC) to visit business premises and even homes under special circumstances without a search warrant and in cases where obtaining a warrant would defeat the purpose of the search, may be unconstitutional.   FIC, meanwhile, has confirmed in Parliament that between the years 2011 and 2016, 930 warrantless searches with the consent of those searched had been carried out by its inspectors.

Rare happening


The move
by the President, after five months of inaction, has now forced Parliament to seek the opinion of senior counsel to reinforce their views that warrantless searches are indeed acceptable in terms of the Constitution.   The FICA Bill was originally recommended for signature into law and sent to the President by no lesser body than the National Assembly, then concurred to by the National Council of Provinces, both on the advice of Parliament’s own legal counsel on constitutional issues.   This is normal procedure with every piece of legislation.


This reason for further delay on the President’s part must have raised a few eyebrows at the Organisation for Economic Co-operation and Development (OECD) centre in Paris.     As those in financial circles are aware, the Bill was tabled by the Minister of Finance with the objective of not only aligning South Africa’s banking and financial institutions with global financial advances but to counter growing and localised corruption and money laundering.

Hurry up and wait

This august body, the OECD, much maligned by the Minister of Mineral Resources in tandem with his opinions on the SA banking system, is currently awaiting South Africa’s confirmation that it will comply with the latest round of requests for compliance with the fourteen rules, now amended, to counter international financial terrorism and extend the OECD’s ability to combat international money crime.

Warrantless searches are allowed in most major countries where compliance with OECD conditions are sought but in the same countries, as has been worded in the FIC Bill, the circumstances to allow this only in cases of suspected money laundering are specifically worded and this includes cases where the application for a warrant or a delay in obtaining a warrant would remove the element of surprise.

Treasury wanted immediacy

The request for South Africa to conform is more specific in terms of the requirements of the Financial Intelligence Task Force (FATF), better known by banks as the criminal investigation department of OECD.    A date for compliance was set by them in February 2017 and agreed to by South Africa. The banking sector is ready to implement the new rules both in staffing terms and with systems and procedures waiting. Minister Pravin Gordhan and some senior ANC party members have been vocal with their suspicions for the delay.

Mystery motives

In what appears to be almost Machiavellian in political terms, the President, with the knowledge that he must have that Parliament was about to close for business, might, according to some MPs, have lodged his further objections to the Bill in the hope that further support for his views could be garnered from subsequent hearings, submissions and more debate.

Chair of the Standing Committee on Finance, Yunus Carrim, countered the President’s unexpected move by cancelling urgent meetings on the Insurance Bill, scheduled for debate and hearings on the last two days of parliamentary business, and called for an urgent meeting of his Committee.  

Advocate Frank Jenkins, Parliament’s legal adviser, was asked to attend and give opinion, together with manager of FIC, Pieter Smit.   Also attending was the Deputy Minister of Finance, Mcebisi Jonas and National Treasury deputy DG responsible for FIC matters, Ismail Momoniat.

Carrim firm on subject

Adv. Jenkins confirmed the sections of the Constitution provided for a Bill to be returned but only once and on specific issues.  He saw the President’s action as unusual in that a Bill, worked on for two years with every clause scrutinized and with input from constitutional experts, could be returned at such a late stage with so much time having elapsed during which an objection could have been easily submitted.

He then explained to MPs how the Constitution does indeed allow for warrantless searches in terms of the Constitution’s specific wording on the subject matter. He listed six precedents of Bills passed into law recently where warrantless searches are allowed in certain prescribed circumstances in terms of the Constitution.   He said this was not a complicated issue at law in view of precedent.

No good choices

Chair Carrim said he had no choice but to treat the FATF issue as the least worst of bad scenarios and he was forced to apply parliamentary rules to the issue in order that the President’s move could be countered with indisputable legal fact and by applying parliamentary rules objectively and strictly. He wanted to observe protocol so that the matter could become “de-politicised”.  

He said the media had called him “brave” to stand in the way of the President’s obvious wish.   This was not the case, he said, but just a matter of following the rules and respecting the fact that Parliament was the final arbiter in such matters since Parliament represented each and every citizen of South Africa.

The response

The rule, Adv. Jenkins explained to the Committee, was that should a Bill be returned to Parliament by the President, having been beforehand approved by the House on every issue in the Bill, then only the specific point, i.e. warrantless searches, could be discussed and debated subsequently and altered if seen fit. This was stated in the Constitution.   The Bill could then be returned to the President with Parliament’s view on the subject matter alone.

He said that should the Committee decide that the President’s view was a baseless argument then they could probably avoid the President referring the matter to the Constitutional Court with further long delays by supplying advice from counsel.  Chair Carrim agreed with this suggestion and with Committee approval across all parties the call for legal submissions in the form of submissions in the New Year and the matter down for hearings and debate in Parliament after it opens in February/March 2017.

Hands off the Bill

Parliament could then return the Bill to the President, Carrim explained, with full legal constitutional opinion and throughout the whole process, only the issue at hand, i.e. warrantless searches, would be allowed for debate.   No other substantive issues could be raised, debated or voted upon as the Bill had been approved by Parliament, Carrim said, and only one issue was under scrutiny.

He said, this would be clearly advertised when calling for submissions and the Speaker asked to observe the rule in any subsequent National Assembly debates.  Any other comments and observations would be regarded as irrelevant.  As far as the OECD was concerned, this was a risk that Treasury would have to handle in their meetings with OECD but this route, Yunus Carrim felt, was the better option.

Believe it or not

For the five months that President Jacob Zuma has been refusing to sign the Bill into law
and refusing to give any reason other than finding the time to “apply his mind to the issue”, any amount of publicity on the need for speed must have landed up on the President’s desk
, even if  just legal advice on the subject instructed by the President.   Lying to Parliament has now become a presidential practice, cartoonists Jonathan Shapiro, Neale Blandan and Jeremy Nell having turned President Zuma’s relationship with Parliament into an art form. 

The “G” factor

As far back as 2009, the OECD published a list of countries divided into three parts, all depending on how or whether they complied to “internationally agreed tax standards”, in select jurisdictions, tax havens or other financial centres of interest and whether they had implemented appropriate legislation in line with OECD requests.   

The procedures are now part of standard international banking procedure but now relate specially to identifying money movements of “prominent persons” and where money laundering seems possibly to be evident.

Whether the President, as the most elevated and “prominent person” in the country, might be trying to protect himself or other “prominent persons” including friends and associates alike against investigation into money movements is not, however, the main issue.

All suffer

The far more serious issue is that the President’s seeming neglect in responding for months has exposed the country’s banking and financial systems to risk.  This is quite outrageous.  The President may or may not have a good argument that it is constitutionally inviolate for the FIC to search without a warrant and possibly with or without warning beforehand  but it seems a stretch of the imagination, given his track record, that he is morally indignant.

Parliament has now issued a gazette calling for comment with the following proviso: “All submissions must therefore only deal with the constitutionality of section 45B (1C) dealing with warrantless searches in clause 32 of the Bill.     As the hearings are on the constitutionality of warrantless searches, those making submissions are requested to provide legal opinions for their arguments if possible.  No consideration can be given to submissions dealing with any other provisions of the Bill.”

Hearings are promised as well in mid-March 2017 for  generalised input on the legislation, part of Chair Yunus Carrim’s call for Parliament to investigate “transformation in the financial sector.” 

 

FIC Bill hold up goes to roots of corruption – ParlyReportSA

Red tape worries with FIC Bill – ParlyReportSA

Madonsela: state capture and corruption linked – ParlyReportSA

 

Posted in Cabinet,Presidential, Finance, economic, Justice, constitutional, LinkedIn, Special Recent Posts, 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

Madonsela: state capture and corruption…

says, Zuma involved in state capture.. 

editorial.. To those who know, the silence after a bomb goes off is quite uncanny. Like the state capture bomb. Even birdsongthuli-madonsela-2 ceases and the world seems to halt for a few seconds.  Then as things start up again, people seem to gabble. Everybody is rushing about. Life starts up but the noise seems incredible, if you can hear at all that is.   Following this comes the sickening realization that there might be a second bomb.   One seems helpless.

So it was when the Public Protector’s Report on State Capture was released.   Most had the feeling that to see in writing upon the frontispiece the words “state capture” was quite surreal.   Up until then it was rumour; an “alleged” idea; something that was always “strongly denied”; certainly, shady but in any case, difficult to prove… but it certainly shouldn’t happen in our backyard anyway.

Truth must out

thuli-encaThen the bombshell report was released.  The world seemed to halt in silence whilst its 355 pages were digested. Then came the voices, mostly loud and some quite vociferous.  Some demanded more proof; some demanded immediate retribution. Many asked for the President to step down, following which was a festival of interviews on e-NCA.    Meanwhile, in Parliament the corridors went quiet.   Like a phoney war.

Rewind

Whether there is a second bomb in the form of the Hawks and the NPA again charging Minister Pravin Gordhan is purely conjecture at this stage.   It is part of a process that Parliament is not privy to.   Parliamentarians must just watch these parties go about their business, unfortunately at the expense of a jittery investment market.

What we do know is that all judicial and parliamentary processes are painfully slow and this iscropped-sa-parliament-2.jpg as it must be.   Witness the complaints if a Bill is rushed or “hammered” through Parliament.  It rarely works when carried out at speed and the process is exposed for its faults.

The law may be an ass at times and very laborious but it is there to fight corruption.  To eventually win a case against such a difficult-to-prove crime may take time but it is devastatingly successful when achieved.

However, the name Gupta is not responsible for everything.   Some of unpleasant exposures, especially in the energy field, are the result of massive incompetence rather than a temptation of financial gain.

Taking time

In ParlyReportSA, now with clients, we detail four painfully long processes which eventually will result in what may not be liked by some but have been correctly subjected to the slow but democratic procedure of Parliament – the MPRDA Bill; the investigation into the tina-joemattIkwhezi R14.5bn loss; the sale of South Africa’s strategic oil reserves; and how the mini-budget of Minister Pravin Gordhan has evaded the claws of state capture.

Our constitutional, and therefore our parliamentary system which is integrated into it, is subject to a clause which states that the president of the country is the person who is elected as the president of the ruling party’s National Executive.    This outcome only changes if that person is found guilty of breaking the law or his and her oath of office. For this outcome to be proven can take much time.

Patience a virtue

Gratifyingly also, amongst many outstanding court procedures underway, the arduous parliamentary and legislative process to ensure a recalcitrant President gets around to signing the FICA Bill, is underway.

His signature is needed in order that the countrzuma1y can meet international banking obligations and comply with money-laundering disclosure requirements. The fact that the President has not signed it, as was put before him by Parliament and has provided no reason for the apparent lack of inertia to do so, speaks volumes.  Probably a case for personal privacy will be tabled by his defence team, if he gets to need one.

Delaying tactics

Either the President in this instance will waste taxpayer’s money with a long drawn out case or be advised to withdraw, as has been his practice up until now, by acceding at the last minute and will have signed or be told to.

zwaneHe and his associates know that this Bill is a critical tool in the fight against illegal transfers of funds by “prominent persons”.  Minister Zwane’s fight with the banking sector is an unnecessary sideshow connected to this process. More becomes evident in the media , day by day, of this gentleman’s shady dealings.

Dark forces

Another fight calling for patience and now being unearthed is the level of corruption within intelligence services, Hawks and the NPA.  Hopefully, this is not as deep as the relationship that Robert Mugabe had with Nicolae Ceaușescu of Hungary, based on which he built his CIO and followed the advice gained from his training with Nangking Military Academy.

hawks logoHopefully also, with the NPA, Hawks and other major undercover government departments, only such matters as  graft involving as rhino trade and state capture bribes are the tools of trade involved and the aim remains simply self-enrichment.

Hope springs

The “goodies” in South Africa have much to undertake in order to beat the “baddies”, not helped by senior ANC officials not getting off the fence for fear of being demoted on the party list and losing their pensions.    All the same, there are so many good men and women speaking out at the moment from all spheres of political and business life,  the ANC in particular,  that “the force” would appear unstoppable.

Getting Parliament back into control and equal to the Cabinet will be a long process andparliament mandela statue calling for extreme patience, as manifested by our greatest President who demonstrated such incredible patience over many years in his long walk to freedom.

Previous articles on category subject

FIC Bill hold up goes to roots of corruption – ParlyReportSA

Parliament: National Assembly traffic jam – ParlyReportSA

Red tape worries with FIC Bill – ParlyReportSA

Anti-Corruption Unit overwhelmed – ParlyReportSA

 

Posted in Cabinet,Presidential, earlier editorials, Energy, Finance, economic, Fuel,oil,renewables, Justice, constitutional, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments

Communal Property Bill assists land reform

Reform assisted on communal property 

communal-land-4…sent to clients 21 Oct….The tabling of the Communal Property Associations Amendment Bill could represent a major advance in bringing order to many aspects of government’s land reform policy. In essence, the Bill will ensure that householders have security of tenure and thus have the ability to raise capital before they enter into any agreement on the management of communal land.

The new Bill focuses on developing the practical and legal aspects of ownership of communal land by a communal property association (CPA) whilst at the same time providing security of tenure with a new initial procedure of naming householders to benefit. The draft has now been approved by Cabinet.

Whilst the thrust of government policy on land reform has always been to bring ownership ofland-reform self-sustaining agricultural land to previously disadvantaged communities, the process has been much bedeviled by conflict over land falling under the control of traditional chiefs; the inability of small farmers to raise finance without title and, most important, for households able to enjoy security of tenure.

Communal confusion

An unintended consequence of the original CPA programme launched by government has been that government has not wished to involve itself, nor has any investing entity for that matter, in the community strife and argument over communal land, a feature of many CPAs. Consequently, the CPA system has demonstrated its inability to involve itself in loans, any state support, or receive the support of agricultural assistance programmes.

community-farmIt might be said that CPAs as a structural system is “off the banking radar”, a fact which MPs in parliamentary committee meetings have complained of a number of times.

As a result, expensive trusts have become the order of the day, banks preferring to deal with such entities and even government itself having to use them because of the informality of a CPA and the inability of loan applicant to show security.

The objective of the Act when it was signed into law was to create a new form of juristic person to allow disadvantaged communities to acquire, hold and manage property in common. A community that qualifies in terms of the Act can therefore, on the basis of agreement contained in a written constitution, form a legal entity (the CPA) and thereby become owners of property, including land, via the CPA.

Agricultural reform

A CPA as it currently stands allows its members to become owners of land which has been “prioritised for the provision of infrastructural support to land reform farmers to enable them to create sustainable jobs and alleviate poverty.”

However, over the few years since CPAs were established, it appears from parliamentary Lesedi traditionalportfolio committee meetings, that things have not gone well. In some cases, traditional chiefs had intervened and gained control of land previously under the aegis of the members of a CPA. Meanwhile, traditional chiefs had complained that CPAs were acting like “chiefdoms” in themselves, the department told parliamentarians.

Tweaking and compromising

Some attempts were made by the Department of Rural Development and Land Reform to persuade CPA members to appoint traditional chiefs on an “ex-officio basis” but the situation remained untenable, not necessarily just because of the problem of traditional control but because, due to shortage of staff, they said, had no ability to monitor the situation and no picture of what land was under CPA control, where CPAs were, and their needs.

In addition, no measurement of outcome of any schemes appeared possible, Opposition members complained. Quite clearly, they said, the NDP land reform programme has not been successful to date. Whilst the idea had been along the right tracks, it seemed the system was patently in trouble.

Green Paper study

After two years of investigation, in 2014 the Ministry, produced a Green Paper on the subject. After creating communal property ownership rights, the new proposal in the Paper was to secure individual tenure to each household beforehand, be it a farm-dweller or tenant, and for each household to own its rights at law before the CPA was formed to lock into this.

land-reform-5As per the Act in force, it would be possible for a community or group of persons to have access to a registered title to land through common or joint ownership with every name included (in a deed of transfer) or through a trust (with title vesting in the trustees) or a juristic person (with title vesting in that legal entity). Once registered, the CPA would become a juristic person – that can sue and be sued. It could acquire rights and incur obligations in its own name, in accordance with a CPA constitution.

In a policy statement, a Bill was proposed along these lines with a CPA constitution as before dealing with sub-divisions, servitudes, the right to encumber with a mortgage, deal with leases and settle disputes – all essential to the development of the area concerned but in respect of nominated persons giving those persons therefore security of ownership.

The bigger picture

The new Bill therefore speaks to a process to align a CPA to the broader land reform mandate in terms of the policy statement. The Bill also says a Communal Propertyland-claims-court Associations Office is to be established which is headed by a Registrar of Communal Property Associations. As a result, CPAs will be better equipped, it is felt, to take part in development; its status is recognised and is known to government; and has a secure system of tenure established as a base for ownership.

DHA said the plan was to clearly establish the connection between the land itself and those who live on it and depend on it for agricultural income. With more clearly established security and a need to register for compliance, it is hoped that a CPA structure will present a more viable face to the investing world.
Previous articles on category subject
New approach to land reform – ParlyReportSA
Restitution of Land Rights Act reversed – ParlyReportSA
Land Holdings Bill joins state acquisition trend – ParlyReportSA

Posted in human settlements, Justice, constitutional, Land,Agriculture, LinkedIn, Special Recent Posts0 Comments

NRCS hammered over port delays

NRCS admits failure to meet LOA targets

…..sent to clients 16 Oct…...The National Regulator for Compulsory Specificationsasogan-moodley (NRCS), responsible for the issuance of letters of authority (LRAs) to complete import certification of imports in respect of critical safety regulations, came under intensive fire in Parliament from MPs across all party lines.

This included a warning from Trade and Industry Portfolio Committee Chairperson, Joan Fubbs, that the NRCS failure to meet its annual targets, particularly bearing in mind such targets were set by themselves, was not acceptable.

Chair Fubbs told CEO Asogan Moodley of NRCS his agency was “a blot on the otherwise excellent annual performance of the Department of Trade Industry (DTI)”, NRCS being the only one of the seventeen DTI entities to receive a qualified annual report from the Auditor General’s office for the past year.

Durban is problem area

sars-warehouse-durbNRCS has a mandate to provide LOAs for clearing goods for sale or service in various categories of goods imported into South Africa, with the port of entry of Durban providing most of the problems in supplying the necessary LOAs. Chair Fubbs said that the poor performance already shown in the first quarter of the current financial year did not auger well for any change in the immediate future. This cannot be the case, she warned.

NRCS divides imports into the main categories of automotive including all components; chemicals, materials and mechanicals; electro-technical including IT and electronic appliances and food in the form of fishery products, canned meat and processed meat. NRCS also ensures standards on building supplies and checks calibration and checks of weights and measuring equipment supplies, including gaming equipment.

Massive backlogs

CEO Moodley told parliamentarians that outstanding LOAs over the recognised maximum period of 120 days were, at worst, 191 days – where 179 consignments were involved. In all some 1,500 consignments exceeded 120 days across all imports at various ports of entry, he said. The worst failures to supply import LOAs were in respect of electrical goods, IT appliances, vehicles and automotive parts.

All imports were checked on a “risk-based approach” and dived into low-risk, medium-risk andcargo-vessels-durban high-risk as far as consumers were concerned. Target turnaround time, after inspection and issue of relative LOAs, was respectively 75 calendar days for low-risk, 90 calendar days for medium-risk and 120 calendar days for high-risk.

Asogan Moodley emphasised that a major problem had been that DTI had changed working days into calendar days which had overtime connotations for NRCS with already limited staffing levels.

The whole truth

Chair Fubbs queried the number of days that cargo was outstanding supplied by NRCS in their annual report, stating that she was aware that the situation was far worse that indicated by NRCS in their presentation. In fact, a number of consignments needed by commerce and industry has been sitting in bond for nearly a year, she said. This was not acceptable, she warned.

warehouseCEO Moodley named his problems in clearing goods as being as being a result of short staffing of expert examiners, who were difficult to find – although some personnel were being trained or re-trained to meet technological changes. Compounding the problem, he said, was the necessity to update the entire NRCS IT ability, which was budgeted for but which had not yet been completed.

He also complained that the volumes of incoming imports and the technical advances represented almost monthly in imported goods were not exponentially related to the growth of NRCS, its skills base and the level of monitoring expertise, particularly at major ports.

IT gear just standing

In respect of the electro-technical category, he said that whilst inspections were up 11% transnet-container-terminalagainst target, the processing of LOAs within the financial year stood at 68% lower than the target for 120 days turnaround. In other instances, inspections carried out at source or at retail level were also short on target level but CEO Moodley assured the Committee that the NRCS had embarked upon a process of implementing a new system of automation and modernisation to improve performance.

He said it would take 18 months to complete such a programme at a total cost of R50m.
Major problems encountered were that certificates of origin supplied by importers which differed when the same goods were subsequently imported resulting in the need for fresh LOAs and that all processes at present were manual which increased load.    He called for the regulations to be changed so that more categories were allowed for so that very low risk products could be handled specifically on a quicker turn-around basis.

Opposition members said that they could not see how this would improve the situation since the problem appeared to be an inability to handle any volumes with untrained staff, whether low risk or high risk.    MPs noted that import bottlenecks were a financial threat to businesses and industry who were reliant on such imports and failure by DTI in this regard led to job losses and low growth.

Technical advances not in tune                nrcs-logo                                    

CEO Moodley and his team of departmental heads went to great lengths to explain the technical variations in international goods and imports coming from various countries that were either substandard or which had wrong documentation. He said that the failure to provide standards for treated timber and safety footwear, for example, had caused a backlog and such issues as non or sub-standard tyres on vehicles had slowed things down in the automotive sector.

He complained that the lack of consistency in supplied products and the constant attempts to short-circuit the system by importers accounted for much of the delay in turnaround.

Where it matters

CEO Moodley said that the electro-technical industries represented an area where most product failures occurred.  He added that the introduction of LED technology had compounded the checks for accuracy and reliability and such issues as compatibility of electrical goods, in many cases portable generators and white goods, had a poor record of power specification labeling and consequent safety in South Africa.

This was a growing problem with many countries who worked to different standards, various plugging methods and a different disclosure ethic.

Warning

durban-port-bigIn conclusion, when the debate was wound up, the Committee noted that a complete change of direction in the methods and ability of NRCS to meet its targets had to be found and that future presentations by NRCS reflecting such dismal results would not be tolerated.

As a result of a number of critical comments from MPs across party lines, the backlog of 1,650 LOAs over 120 days would be tackled, regulator Moodley promised, “by October” but stated this as being with the use of “new inspectors”.

Also, in an effort to speed up the search for unsafe or non-compliant products, there would be no need to obtain a new LOA for additional imports of a product where one had been additionally granted, he said. However, NRCS reserved the right to carry out spot checks.

Consequences

From a subsequent follow-up report in Business Day, it was learnt that DTI had confirmed the resignation of CEO Asogan Moodley and that such a move “had been a decision of Mr Moodley himself”. Trade and Industry Minister, Rob Davies, said he had instructed DTI’s DG, Lionel October, “to engage with NRCS to ensure they meet their targets”.

DTI said that Minister Davies “simply expects management and labour of DTI entities to meet their targets”, referring specifically to LOA targets in the case of NRCS.
Previous articles on category subject
Customs Duty Bill cuts out inland ports – ParlyReportSA
Border Authority to get grip on immigration – ParlyReportSA
Tax law changes after mid-year budget – ParlyReportSA
New Customs Duty Bill opposed by BUSA – ParlyReportSA

Posted in LinkedIn, Public utilities, Special Recent Posts, Trade & Industry, Transport0 Comments

Foreign assets amnesty Bill underway

Timing of window period resolved as 30 June

…..sent to clients 15 Sept…  The Standing Committee on Finance has now behind it the call for comment on a revised draft Rates and Monetaryfinancial-darwin Amounts and Amendment of Revenue Laws Bill which proposes a Special Voluntary Disclosure Programme (SVDP) for financial amnesty  in respect of offshore assets and income.     The process is therefore well underway for the introduction or tabling of the final Bill from Treasury.

The draft Bill was coupled with a second draft for comment, the Draft Rates and Monetary Amounts and Amendment of Revenue Laws (Administration) Bill, which handles implementation of the amnesty. 

gordhan2The original proposals were made by Treasury in June of this year following the statement made by Minister Pravin Gordhan in the 2016 National Budget. The idea is to again encourage non-compliant tax-payers to voluntarily disclose offshore assets and income, with a window period of opportunity to do this bearing in mind that the global standard for automatic exchange of information between tax payers is coming into force in 2017.

Alterations made

Changes to the original proposals are a re-definition of trusts to include those located externally; tax relief will apply to tax assessments going further back in date and undeclared amounts derived from foreign assets will apply for the financial years from March 1 2010 to Feb 28 2015, the common date for tax assessments.

Foreign assets

In the case of foreign assets, the tax applied was to be applied at 50% of the highest value of all assets offshore, the foreign currency conversion rate forsars-logo valuation being the highest Rand spot rate of the years applied for and declared.    A request to reduce this to 40% has been accepted by Minister Gordhan.       Treasury feels that anything less will cause discomfort those who have declared foreign assets correctly and have paid normal tax rates in the meanwhile.

Taxpayers who disposed of any foreign held assets prior to 1 March 2010 will also be able to apply for relief under the SVDP window, any tax to be payable in South Africa.    The application form is called the Voluntary Disclosure Application Form (VDP01) and can only be accessed via the SARS e-filing system if the current system is to be used for this particular SVDP.

More time

Financial advisors and banks have also pointed to the lengthy processes involved in filing applications, particularly where foreign asset valuations are involved and Treasury have indicated that the window period will run now from 1 October to 30 June 2017 to accommodate this.

The gazette states, “The SVDP (and the acceptance of electronic SVDP applications using the SARS e-filing platform) will commence on 1 October 2016 and will continue until 30 June 2017.    South African residents (individuals, sole proprietor, partnerships, deceased estates, insolvent estates, South African trusts, close corporations and companies) and former South African residents will be allowed to disclose their foreign assets held in contravention of the Exchange Control Regulations, 1961 (Regulations) as at 29 February 2016. Exchange control applications to the SVDP Unit are to be made pursuant to the provisions of Exchange Control Regulation 24 (Regulation 24).”

Particularly relevant is the addenda, “Please note that any party involved in a foreign exchange transaction that is currently under investigation by FinSurvmoney may not apply for administrative relief.”

From the proposals, it can be seen that R10m plus R1m a year is the maximum size of legal offshore investments that can be made by SA residents currently under the Act. This cannot be used to “offset” against any levy rendered against a disclosure, says SARS.       Corporates can still invest up to R1bn without informing the Reserve Bank.

Safe with SARS

SARS has said the average turnaround time is currently about 16 working days per case submitted.

Nothing has yet discussed in any way before the Standing Finance Committee on the issue of the Panama Papers, nor probably will it be, but the 1,700 South African names purported to be on record now with SARS from the Papers has been cited by some as a possible reason the Bill had not been tabled.

It is quite clear from the gazetted statement that no claims for amnesty are possible in general terms whilst an ongoing SARS investigation is in process.  ThisAfrica Money might disbar certain high profile cases therefore.

A final Bill is therefore now anticipated in Parliament for hearings, debate, concurrence by the NCOP and passage to the National Assembly for a vote since, presumably, nothing will happen until the Act is amended by both Bills.
Previous articles on category subject

Parliament debates three financial market and tax Bills
Budget 2016: more on amnesty – ParlyReportSA

Posted in Finance, economic, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

This website is Archival

If you want your publications as they come from Parliament please contact ParlyReportSA directly. All information on this site is posted two weeks after client alert reports sent out.

Upcoming Articles

  1. MPRDA : Shale gas developers not satisfied
  2. Environmental Bill changes EIAs
  3. Parliament thrashes out debt relief Bill
  4. Border Mangement Bill grinds through Parliament
  5. BUSA, farmers, COSATU give no support to sugar tax

Earlier Editorials

Earlier Stories

  • Anti Corruption Unit overwhelmed

    Focus on top down elements of patronage  ….editorial….As Parliament went into short recess, the Anti-Corruption Unit, the combined team made up of SARS, Hawks, the National Prosecuting Authority and Justice Department, divulged […]

  • PIC comes under pressure to disclose

    Unlisted investments of PIC queried…. When asked for information on how the Public Investment Corporation (PIC) had invested its funds, Dr  Daniel Matjila, Chief Executive Officer, told parliamentarians that the most […]

  • International Arbitration Bill to replace BITs

    Arbitration Bill gets SA in line with UNCTRAL ….. The tabling of the International Arbitration Bill in Parliament will see ‘normalisation’ on a number of issues regarding arbitration between foreign companies […]

  • Parliament rattled by Sizani departure

    Closed ranks on Sizani resignation….. As South Africa struggles with the backlash of having had three finance ministers rotated in four days and news echoes around the parliamentary precinct that […]

  • Protected Disclosures Bill: employer to be involved

    New Protected Disclosures Bill ups protection…. sent to clients 21 January……The Portfolio Committee on Justice and Constitutional Affairs will shortly be debating the recently tabled Protected Disclosures Amendment Bill which proposes a duty […]