General Laws (Anti-Money Laundering and Combatting Terrorism Financing) Amendment Bill: finalisation (postponed)

Meeting report

The Chairperson welcomed the Members, National Treasury, the Financial Intelligence Centre (FIC) and all other entities that reported to Treasury.

The Committee was supposed to consider the bill clause-by-clause and consider the report on the bill.

The Chairperson apologised for the delay in the meeting.  

The Chairperson asked where the Committee report was. He asked the Parliamentary Advisor if he had emailed it to the Members?

Dr Zakhele Hlophe, Parliamentary Advisor, Constitutional and Legal Services Office (CLSO), said that he had not emailed it. He was going to email it now. The report was very much in a draft format. He had only received the final inputs from Treasury today. He had had very limited time to finalise it. He could email the report in the draft format. He was hoping to display it on the screen and then go through it with the Members.

The Chairperson said that it could be displayed in the meantime. He asked for an explanation from Treasury. He was not sure who was leading the delegation from Treasury. Why did this Bill not have a SEIAS report? Last week it was agreed that Treasury would send the Secretariat, including the researcher, its response by the latest Monday evening. Treasury sent it today and expected the Committee to go through the Bill clause by clause. Why did Treasury do that? Why should there be this exception? The Members had not received the report. Treasury had not done this before. In most cases the Members received a report a day before for them to go through the report and get a mandate from their political parties. If they got the report now when would they consult their political parties and Chief Whips? This was an ambush, and it was unacceptable. The Committee had never done things like this before. The Committee accepted that Treasury brought the Bill late. The Committee tried under difficult circumstances to create space to process this Bill, which did not have a SEIAS. Now, instead of sending a response last night it was sent today. No one had the report and the Committee had to consider it and adopt it today. He was not sure whether it was going to be possible. He asked whoever was leading the Treasury delegation to give the Committee an explanation before the Committee goes into the report.

Mr Vukile Davidson, Chief Director: Financial Sector Policy, National Treasury, said that Treasury had acknowledged how flexible and accommodating the Committee had been. Treasury apologised for the late submission of the documents this time around. As late as this morning Treasury was still trying to engage with stakeholders to make sure that there was as much consensus as possible. It had been extremely difficult given the wide range of legislative areas that the Bill covered. He took responsibility and apologised for the late submission. He discussed the SEIAS. It was a Cabinet process. Treasury had received an exemption from Cabinet for that aspect. That was out of recognition of the massive time constraints that Treasury was under. Cabinet, like the Committee, had been incredibly accommodating given the complexity of the Bill covering a number of Departments and a number of Committees. He acknowledged that that was not an excuse for the late submission but he hoped that it provided a bit of a reason.

Ms Jeannine Bednar-Giyose, Director: Fiscal and Intergovernmental Legislation, National Treasury, said that Treasury acknowledged the timeframes with the submission of the amendments. Treasury had significant engagements with the Department of Social Development, in consideration of all of the submissions particularly on the NPO Amendment Bill. Treasury tried to address as many of the concerns as possible. Particularly raised by the NPO sector. Treasury applied its mind and had a number of engagements trying to ensure that the proposals that it would submit to the Committee would address the concerns raised in the submissions. The concerns were very important. Treasury wanted to ensure that the legislative proposals would be sound, would satisfy the Committee and as far as reasonably possible, the stakeholder community. That was one major effort Treasury took in relation to the proposed amendments. Another aspect that Treasury had engaged on substantially was in relation to the submissions related to the amendments to the Companies Act. This was related to the implications for listed companies and requirements for providing information relating to beneficial ownership. Treasury ended up having a number of engagements with stakeholders to try and develop appropriate proposals to include to the Committee in this regard. It was a bit of a complex area with different entities and different types of companies that were involved. To develop appropriate refinements, Treasury wanted to make sure that what it proposed would be workable, sound and would address in actual practice the concerns that were raised in the submissions. That took a fair bit of engagement. Treasury also needed to ensure, because it was amending the legislation under the auspices of the Department of Trade, Industry, and Competition and it was also administered by the Companies and Intellectual Property Commission, that what it proposed would be acceptable and that they would agree with those provisions. Those engagements went up until yesterday to really confirm the final proposals. Treasury had gone through a number of iterations of proposals. Those were the primary areas that took a bit of work and resulted in Treasury taking quite a bit of time to develop the list of amendments that would be submitted to the Committee. Treasury also needed to ensure that the amendments were technically correct. Treasury understood the Committee’s concern. The Committee would abide by its own assessment of how to proceed with the process. Treasury would be willing to go through the proposals that it submitted to the Committee and explain it in detail so that the Committee could understand the proposed refinements and the specific concerns that they were seeking to address. Treasury hoped that would assist the Committee in its deliberations. Treasury would be happy to do that for the Committee.

The Chairperson thanked Treasury for its response but said that it was not acceptable. This was an ambush. The Members in the meeting did not represent themselves. They represented political parties. This was a very critical Bill. It was not like any other Bill. Hence, it was called a General Law Amendment Bill. It had implications on a number of issues let alone the five legislations that needed to be amended. If the Members came here they did not have mandates from their parties. Members would be seeing the report for the first time. If the Members adopted the report today then tomorrow their political parties would ask them questions.

He discussed the issue of SEIAS. He provided an example of when Members were processing a Bill and raised concerns about processing a Bill which did not have SEIAS. Parliament committed itself by all means to assist private Members who were bringing Bills to do a SEIAS report. It could not be acceptable that a big Department like Treasury could not do a SEIAS. Treasury needed to give the Committee a report. If Cabinet exempted Treasury, then Treasury needed to tell the Committee when it applied for the exemption and when it was granted. The Committee wanted to include it in the report. How was the Committee going to take a report to Parliament and the report did not have a SEIAS? How was Parliament expected to adopt that report with the amendment? It was going to be something unique. The Committee understood the circumstances under which Treasury was working. However, it could not be that when the Committee was processing these issues that it could violate the procedures of the country. Procedures of Parliament had to be respected. It was not just a way of ticking the box. It was a legislative requirement that a Bill had to have a SEIAS report. This matter of FATF (Financial Action Task Force) has been with Cabinet since 2017. What was the reason for all these years for not having conducting a SEIAS report? Would the Members adopt the report without understanding its socio-economic impact?

The Chairperson noted that if time permits the meeting would be postponed for a day or two and make sure that there was a thorough processing of the report. If the Members just adopted the report because there was pressure to adopt it then it would not be something meaningful. It would just be a matter of compliance but there would be no meaningful participation by Members. Members needed a full night or a full day to go through the report and then come to the meeting to deal with the issues that were in the report. The Members also needed to go through the clauses with their legal advisors to make sure that their inputs were meaningful. From here it was no longer a Treasury report. It was going to be a Committee report that would be taken to Parliament. Then the Committee would be told by the Speaker that the Committee report did not have a SEIAS report. Members would complain that they were ambushed. They were called to a meeting,  presented with a report and asked to adopt it. What kind of processing of a Bill was that? The Chairperson would have no leg to stand on. He had a responsibility to report to the Speaker that things were done properly. Political parties could threaten the Committee by taking it to the Constitutional Court. Last time the Committee had to get another timeframe for stakeholders to be given enough time to make inputs. Members had to be taken seriously. They had constituencies that they reported to. This was unprecedented. He had been in the legislative sector from 1994. The Committee had never done things in this manner. The Committee and Parliament could not be put under pressure because of FATF deadlines and Parliament should not do things as required by the rules of Parliament. It is going to be problematic. Somebody would challenge the Committee tomorrow and the whole thing would fall flat. The Committee might want to move with speed but if there was a challenge then there might be loopholes and the Bill could be reversed by the Constitutional Court. It was not right the way the Committee was processing this matter.

Dr D George (DA) completely agreed with the Chairperson regarding the process. This delay was not of the Committee’s making. Treasury had this report a very long time ago and it had been very much delayed. The Committee needed to follow due process properly. He felt uncomfortable looking at reports that the Committee received today in the meeting. He did not think that was right. He completely supported the Chairperson’s sentiment that due process must be followed. The Members must be able to consider these reports carefully and then come with considered views to the Committee. He did not believe that this was regular. He had also been around for a long time, since 2008 on this Committee and this was not how Bills should be processed. The Committee was not supposed to be doing work in a sloppy manner. He shared the Chairperson’s sentiments that this was not acceptable. A proper and robust process needed to be followed so that the people that the Member’s represented were satisfied that the Members had done their job properly as was required by the Constitution.

The Chairperson asked Mr Wicomb and Adv Jenkins when the Committee was supposed to table this report to Parliament. He was very uncomfortable. He had not done this type of thing before. That a report was just presented and Members had to accept it and the Bill without getting mandates from their parties.

Mr Allen Wicomb, Committee Secretary, said that he was contacted this morning about when the Committee aimed to finalise the Bill. He had told them that it was today or this evening. That was then going to be taken to the NA Programming Committee. They would be sitting Thursday morning and they would then schedule this in the House. As far as he knew it had not been scheduled in the House. He had not seen it on the Parliamentary programme. He was not sure if Adv Jenkins knew anything else?

Adv Frank Jenkins, Senior Parliamentary Legal Advisor, CLSO, said that he was not aware of this being scheduled in the House yet. He did not know more than Mr Wicomb on the matter.

The Chairperson said that before he made a recommendation, he asked if there was any comment from the Members. He had issues with the manner in which the Committee was doing things now.

Mr W Wessels (FF+) agreed with the Chairperson and Dr George on this matter. This was irregular. The Committee could not consider this report at this stage. The Members had only just received it. It was upsetting the whole process and causing more harm to a process which the Committee should be giving more attention to. The Committee should not rush things. The Committee was rushed things because of the deadlines but the Committee could not do things in this manner. He completely agreed with the Chairperson and Dr George.

Mr G Skosana (ANC) agreed with the Chairperson. As much as the Committee acknowledged that the report was urgent, the Committee needed to ensure that it did things in the right way. The Committee could not flout the process as much as it was running against the deadline to make sure that the report was tabled in the National Assembly within the prescribed time. The Committee needed to make sure it did the correct things. He did not think that the Committee was in a position to consider this report, especially because the Members had not looked at it. The Members would be seeing it for the first time when it was flighted to the Committee. He asked if the Committee could not rather consider it on Thursday evening after the plenary? If the Committee could do that on Thursday it meant that it could be submitted on Friday to the team responsible for making sure that reports were programmed in the NA programme. For today, he did not think the Committee was in a position to consider it if it was to do justice to this particular Bill.

Ms P Abraham (ANC) said that the Committee was working in an environment that was highly legislated and regulated. Sometimes it happened that because a Committee was pressed by time it made decisions and missed out on very important and critical issues that could have had the Committee’s attention if it had sufficient time to look at them. She was sympathetic to the issue of time. However, she agreed with the Chairperson and the other Members that the way things had been done so far was not professional. It was not fair on the Members. Members were supposed to be consulting with their political parties so that they carried the mandate of their parties. It was not about the Members. It was about the parties they represented and the people that had put those parties in Parliament. The Committee should take a step back and do the right thing. It would help the Committee in the long run.

The Chairperson asked Mr Wicomb and Adv Jenkins to draft a letter on his behalf to ask the Minister why the Bill came without SEIAS. The Minister knew very well the importance of SEIAS. The Minister needed to put it into writing. The Committee did not want to speak for Treasury in Parliament. The Minister needed to put it in writing why the Bill did not have SEIAS. The Committee would put it into the report that the Bill did not have SEIAS because of the reasons given by the Minister. The Bill had been tabled by the Minister. He asked that a letter be sent to the Minister on behalf of the Committee. The issue of SEIAS was very important. The other times when private Members brought Bills then it was said that the Bills did not have SEIAS. Even Private Members’ Bills had to comply like any other Bills that came from Cabinet. Tomorrow when private Members brought Bills to Parliament, Parliament would reject the Bill on the basis that the Bill did not have SEIAS. What leg did the Committee have to stand on? The Committee had a Bill that came from the Minister that came without SEIAS. If there was an exemption, then there needed to be an explanation when business and the social sector had lots of interest. The Committee would write a letter to the Minister for him to speak for himself. The Minister needed to provide explanations why Treasury had received an exemption from Cabinet after this Bill had been with Cabinet for such a long time. The Committee would postpone the meeting tonight and meet again. Mr Skosana proposed that the Committee meet on Thursday evening. The Chairperson asked what the schedule was like if the Committee had a meeting on Thursday evening because tomorrow the Committee had other business?

The Committee Secretary said that the questions to the President on Thursday was from 14h00 till 17h00.

The Chairperson said that the Committee could meet at 18h00. It would allow Members to attend the meeting.

Mr I Morolong (ANC) asked if it was assumed that the Committee would receive a response from the Minister by Thursday. That report would go a long way in how the Committee would finalise the process.

The Chairperson said that in the letter he was going to write he would explain to the Minister that Members expected him to provide a response for the Thursday meeting that was going to place at 18h00. The Committee’s letter to the Minister would have timeframes. So, that when the Committee met on Thursday evening it would have received a response from the Minister. That was what the Committee would do. The Chairperson noted that the Committee would meet again on Thursday to continue processing the Bill.

The meeting was adjourned.