PRESS RELEASE
FOLLOWING OUTCRY FROM NPO SECTOR, PARLIAMENT EXTENDS WINDOW FOR COMMENT ON ANTI-MONEY LAUNDERING BILL(UPDATE) PRESS RELEASE BY CAUSE FOR JUSTICE
SUBJECT: FOLLOWING OUTCRY FROM NPO SECTOR, PARLIAMENT EXTENDS WINDOW FOR COMMENT ON ANTI-MONEY LAUNDERING BILL
DATE: 12 OCTOBER 2022
* FOR IMMEDIATE RELEASE *
On Tuesday, representatives of the non-profit (NPO) sector called upon Parliament’s Standing Committee on Finance (the committee) to meet its constitutional obligation to facilitate effective public participation in the law-making process. During public hearings on the controversial General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill (the Bill), [1] stakeholders wasted no time condemning the extraordinary short commentary period and demanding a general extension. [2]
While the overall objective of the Bill serves a necessary and legitimate government purpose and the public interest, [3] human rights and public interest organisation, Cause for Justice (CFJ) and others warn that its current version is likely to have a detrimental impact on the NPO sector.
CFJ had been engaging committee members since last week, stressing the necessity of allowing more time for meaningful engagement with the Bill. Its oral representations to the committee, [4] re-emphasised the constitutional importance of public inputs in the legislative process. CFJ welcomed the Committee’s decision to extend the deadline for comments to Tuesday, 25 October 2022.
According to the human rights organisation, the proposed amendments hold far-reaching and drastic implications for NPOs. Most notably, it will compel all NPOs to register and comply with additional administrative (and by implication, financial) burdens – or face criminal sanctions, including fines and even imprisonment of governors and office bearers. Currently, registration is voluntary and a large number of NPOs choose not to register for various legitimate reasons. [5] Mandatory registration and additional compliance burdens potentially spell disaster for an already over-extended and under-funded NPO sector, and per extension, society’s most vulnerable members. [6]
CFJ cautions that the Bill will not pass constitutional muster if its proposals will not yield a significant net benefit outweighing the cost to the NPO sector and society. Otherwise, it says, this will constitute an unreasonable and unjustifiable (i.e. constitutionally indefensible) limitation of the rights and freedoms of law-abiding NPOs and their governors and office bearers.
In its oral submissions, CFJ focused on three critical pre-preliminary questions relevant to the constitutionality of Bill, namely:
- Whether the measures in the NPO Act, which will become compulsory, are the least restrictive means to achieve the purpose of preventing money-laundering and combatting terrorism financing in the NPO sector (the intended purpose).
- Whether the burden of placing additional compliance obligations on law-abiding citizens and NPOs that choose to operate outside of the scope of the NPO Act – and concomitant penalties and criminal justice consequences for non-compliance – is a constitutionally justifiable cost of reducing and/or eliminating money laundering through the NPO sector.
- What level of assurance there is, that making the NPO Act compulsory will in fact translate to achieving the intended purpose.
According to CFJ, these complex questions require a proper consideration of the constitutionality of both the intended implications and unintended consequences of the Bill, and of the constitutional rights and interests at play. Now the public benefit organisation urges all NPOs and the South African public to seize the extended opportunity to engage Parliament on the contents of the Bill.
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Cause for Justice will now be preparing its substantive submissions (to augment and amplify is brief initial written comments) on the Bill. It remains committed to ensuring that South African laws effectively achieve constitutionally compliant purposes without causing unforeseen detrimental consequences to society.
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End notes:
[1] The Bill seeks to amend certain provisions of the Nonprofit Organisations Act, 1997 (the Act).
[2] A mere nine and a half working days as opposed to the typical (at least) 30 calendar days.
[3] Namely addressing money laundering and terrorism financing, and to prevent the Republic’s grey-listing by global watchdog, Financial Action Task Force.
[4] See [01:18:29] to [01:29:08] of “Standing Committee on Finance, 11 October 2022”.
[5] Such as minimising the time, funds and other resources necessary to meet legal and administrative compliance requirements.
[6] It will take up valuable capacity and resources, and hinder NPOs from doing good public benefit work.