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PREVENTION OF ORGANISED CRIME SECOND AMENDMENT BILL
AD HOC COMMITTEE
18 August 1999
Documents handed out:
Prevention of Organised Crime Act, 121 of 1998.
Prevention of Organised Crime Second Amendment Bill B41-99
Portfolio Committee Amendments to the Prevention of Organised Crime Second Amendment Bill as of 18/8/99
Section 6 of B41-99 (refer to Portfolio Committee Amendments to the Prevention of Organised Crime Second Amendment Bill as of 18/8/99)
Mr W Hofmeyr briefed the committee on this section which deals with innocent third party offences. For example, gifts are a legal transaction therefore the unwitting recipient of a gift (that is in fact the proceeds of crime) needs to be immunised though the gift will be taken away. He used the specific example of a druglord giving a gift of a vehicle to a relative.
He said to ensure firm constitutional grounds, the drafters had taken a middle road and softened the applicability. Therefore in subsection 2 dealing with proceeds of crime, if property was acquired prior to this Act (21 January 1999), the third party has only to prove that the property was acquired legally and for due consideration ie can show that the property was worth it.
In subsection 2(A) dealing with instrumentality of crime (where property has been used to commit a crime), the legal owner has to prove only that it was acquired legally and that since 21 January 1999 has taken all reasonable steps to prevent the property from being used for crime. This does not give owners a clean slate but it does protect them from pre-1999 evidence if the criminal conduct has ceased since the passing of the Act.
Only if criminal conduct involving this property has not ceased, is the State able to produce old evidence. Mr Hofmeyr said that they needed a formula whereby old evidence can be used because of the litigious issue of the proportionality of crime test. This is where the defence could argue that the loss of property is not warranted in comparison to the post-January 1999 evidence. In order to convince a court to take away the property, the State would need the weight of pre-1999 evidence to show the seriousness of the instrumentality.
Comments and questions by committee members
Mr Nel (ANC) expressed concern about the proportionality test because of the recent comments of a judge who deemed the extent of the instrumentality as not proportional to the loss of the property although, according to Mr Nel, there was extensive evidence of the conduct of crime.
Mr Hofmeyr replied that they were not going to tighten the law on the basis of the obiter comments of one judge. Certainly if it were to be repeated in several more cases, there may be a need to revisit this.
Mr Guam (NNP) communicated the concerns of certain members of the legal profession regarding the onus on lawyers to ensure that there are no "reasonable grounds to suspect" that reimbursement by clients is from the proceeds of crime. He asked for a less stringent test and suggested changing the wording to "strong grounds to suspect".
Chairperson de Lange asserted that money laundering world-wide often takes place through lawyers. He said there is a considerable amount of evidence that lawyers' trust accounts are being used to hold the proceeds of crime. He feels that a loophole is already being created with the innocent third party clauses so he was against providing a further loophole in terms of lawyer privileges.
His comments were echoed by Ms F Chohan-Kota (ANC) and Adv M Masutha (ANC) who believe that this issue reflects the credibility of lawyers - some of whom have difficulty accepting the principle that it is wrong to receive payment out of money that has been stolen.
Mr J Delport (DP) was concerned that not only is the burden of proof on the legal owner but in weighing up, if there is some doubt, then preference is given to the State and not the defendant.
Chairperson de Lange replied that quite simply if the owner cannot prove that he is the legal owner, he should not be given the benefit of doubt. Further there were enough checks and balances built into the system.
Mr H Schmidt (DP) was concerned about the burden of proof on an innocent owner. Chairperson de Lange said that unlike the USA where the seizure process is done administratively, in South Africa there is a constitutionally acceptable judicial process which has two phases: the seizure stage (onus is on the owner) and the forfeiture stage (onus is on the State). There is a different level of onus as one moves closer to forfeiture. If no one comes forward to claim the seized goods, then the matter is over. If someone opposes the seizure all they have to do is prove legal ownership with no retrospectivity applying.
Chairperson de Lange summarised the concerns:
There was uneasiness on the part of the DP on where the onus rests. The DP would come with formal proposals the next day after they had caucused the issue.
With regard to Mr Guam's concern for the legal profession, Mr de Lange said that if these lawyers wanted to make a submission, such lawyers were welcome to do so but they would have to do so before Friday.
Mr de Lange himself was concerned with the proviso regarding "all reasonable steps" which he felt was broad and therefore created too much of a loophole
Section 8 of B41-99
Mr Hofmeyr said that this section needs to be very clear with a narrow interpretation because of the money laundering cases that are currently being prepared by the State.
Section 9 of B41-99
This changes the Preamble to the Act as Mr Hofmeyr said that it was too focussed on organised crime and money laundering and it is a difficult requirement in every case to show a connection to organised crime and money laundering . These two terms have been replaced by "unlawful activities".
Ms S Camerer (NNP) said that one needed to distinguish between criminal activity and organised crime and requested that they bring out the sentiment of organised crime in the Preamble. If this was not done, one might find all stolen property being seized by the State and the legal owners or heirs being excluded from what is rightfully theirs.
In response Mr Hofmeyr said that cases of ordinary theft by individuals would not be pursued by the prosecution unit focussing on organised crime. Mr de Lange also felt that there was no cause for such a concern but requested the drafting team to look at the preamble with a view to creating specific linkages without tying them down to organised crime. He added that the important amendment in that section was the phrase "irrespective of when the unlawful activities took place".
Mr de Lange requested the drafting term to soften the phrase "right to benefits" in the Preamble as the law should not even acknowledge that there is such a right for criminals. He also asked for the addition of the phrase "to provide for a civil remedy for the preservation and forfeiture of property" in the Preamble.
In conclusion Mr Hofmeyr said that this amendment Bill (which dealt with the issues of no rights to benefits; civil forfeiture and retrospectivity) was not changing the original Act but was merely making it more clear.
The committee went over the previous day's amendments which had been effected by the drafting team especially the four options for the wording of Section 2 [Section 26 (8) of the Principal Act] and the options for Section 3 [Section 29 (A) of the Principal Act] so that they are ready for voting on. The committee will vote on this Bill on Monday 23 August 1999.
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