Banking Association South Africa (BASA) appeared before Parliament’s Standing Committee on Finance on 25th January 2017. The hearings took place to consider the President’s referral back to the Committee of a section of the FICA Bill, with concerns that such section is unconstitutional. BASA, on the opinion of legal counsel, affirmed that the relevant section in particular, and the Bill in general, does bear constitutional muster and the Committee should refer the Bill back to the President for signature.
Although the hearings were, according to the Chairperson of the Committee, meant to be limited to the issues of concern raised by the President, some stakeholders raised other matters related to the Bill and insisted the Bill gives unfettered powers to banks. This is patently not correct if one reads the totality of the Bill. Banks will be subject to the requirements of the Bill and the Bill will regulate their oversight on accounts.
“We have no power or mandate over the Financial Intelligence Centre, which is a statutory body and this Bill does not give commercial banks carte blanche in the treatment of clients. Any narrative to the contrary is simply incorrect and inaccurate and only serves to create uncertainty at a time our country needs policy certainty”, says BASA Managing Director, Cas Coovadia.
According to Coovadia: “BASA has consistently maintained that combatting public and private sector corruption, money laundering and terrorism financing, is essential to a conducive banking environment that benefits and serves all South Africans. These are also critical issues for the national interest!
The Bill before the Committee aims to secure important societal objectives that are clearly in the national interest. These include:
• Bringing South Africa into line with its international obligations as a member of the Financial Action Task Force. South Africa must satisfy the Task Force of our anti money laundering regulations. This is critical to maintain confidence in our banks
• Ensuring South Africa has agile measures to implement financial sanctions and the administration of resolutions adopted by the Security Council of the UN
• The effective combatting of money laundering activities and the financing of terrorist and related activities
Independent legal counsel for NT, Parliament, BASA, CASAC and ABSIP all were of the opinion that any intrusion on the right to privacy to achieve these objectives is permissible under the Constitution.
The framework created by Section 45B is necessary to achieve the legitimate government purpose of FICA and the FIC Amendment Bill to further combat corruption, which is patently in the national interest.
Any intrusion imposed by the provisions of Section 45B (1C) are reasonable and justifiable under Section 36 of the Constitution and is thus not unlawful.
Thus BASA has respectfully submitted to Parliament that the President’s concern that Section 45B (1C) of the FIC Amendment Bill is unconstitutional, is without basis.
“We urge Parliament’s Standing Committee on Finance to find that the concern expressed by the President is without basis and to refer the Bill back to the President for its signing into law, as a matter of extreme urgency” says Coovadia.