• Register
Return to: Home > News > South African professional body concerned over new financial bill

South African professional body concerned over new financial bill

The South African Institute of Professional Accountants (SAIPA) has questioned the constitutionality of the Financial Intelligence Centre Amendment (FICA) bill.

The Bill has been in limbo since Parliament assented to it in May 2016, but in December 2016 the President returned the Bill to Parliament, citing concerns over the constitutionality of a single clause that would allow inspectors to carry out searches without a warrant. President Jacob Zuma has been harshly criticised for its delay.

SAIPA deliberated the constitutional integrity of the clause and has submitted a letter to Parliament’s Standing Committee on Finance outlining its reservations, specifically concerns relating to the lack of detail about the conditions of warrantless searches.

Ayanda Mabida, company secretary at SAIPA said the institute acknowledges that FICA is essential to South Africa meeting its obligations as a member of the Financial Action Task Force, an intergovernmental body that sets standards for combating money laundering, terrorist financing and other abuses of the international financial system.

 “SAIPA has reservations on the warrantless searches,” says Mabida. “There are definite circumstances where offenders may leverage delays in obtaining a search warrant to tamper with or destroy crucial evidence. Rather, our concerns relate to the lack of specificity about the conditions under which warrantless searches can be executed.”

In its current form, the amended clause threatens to violate Section 14 of the Bill of Rights, which states that everyone has the right to privacy, and not to have their person, home or property searched, their possessions seized or the privacy of their communications infringed.

To paraphrase the FICA amendment, an inspector may enter premises without a warrant, either with consent from the person in charge (provided they’re informed of their right to refusal), or if the inspector on reasonable grounds believes that a) a warrant would be issued anyway, and b) the delay in obtaining one would defeat the end (refer to FICA 32(b)).

According to Mabida, the term “reasonable grounds” doesn’t adequately describe the extent of the limitation of the right as required by Section 36 of the Constitution. “It could be abused and therefore infringe on the constitutional rights of those under investigation or anyone else.”

Although a court may rectify such infringement after the fact, Mabida is adamant. “It remains that a person’s constitutional rights would already have been violated. On principle, no law should be passed that would permit this eventuality.”

Mabida highlights the Anton Piller order as a model of a well-defined legislation. One can be obtained promptly and allows authorities to carry out a search without prior notice, provided that an extremely strong prima facie case exists; the damage to the applicant would be drastic; and the offenders clearly possess relevant documents or items and could certainly destroy these before a warrant can be obtained.

Mabida concludes that South Africa must satisfy its responsibility to harden its financial systems, but not at the expense of its founding principles. “In developing new legislation, we must ensure that even the most minor clause honours the Constitution as our nation’s highest legal standard, and affords its people the protection described under the Bill of Rights.”

The South African Institute of Chartered Accountants (SAICA) had no comment on this Act.

Top Content

    Brexit negotiations: Making simple complicated

    Stepping away from the politics, ACCA UK head John Williams talks about the practical implications of Brexit for businesses’ supply chains and how the accountancy profession’s pragmatism could be a welcome. But, when it comes to Brexit, by its very nature, the politics can’t stay away for too long. Interview by Vincent Huck.

    read more

    TA & IAB 2017 Awards: Prem Sikka granted the Editor's award

    Accounting professor Prem Sikka will receive a special editor’s award from The Accountant and International Accounting Bulletin at a one-day conference and awards dinner in London on 4 October

    read more

    Australia country survey: scandals and struggles

    CPA Australia hit the headlines over excessive pay, bad management, intimidation, and a ‘celebrity’ CEO departing with a generous payoff. After a parliamentary inquiry and an independent review due to report, can determined members get the CPA they want? Tom Ravlic reports

    read more

    Technical brief: Kazakhstan

    To what extent has Kazakhstan acted on the world bank’s recomendations from a decade ago?

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.