1 INTRODUCTION
Money laundering and proceeds of crime legislation was initially aimed at the proceeds
of drug trafficking. In the Republic of South Africa, the Drugs and Drug Trafficking Act
140 of 1992 contained the original legislation in this regard. However, the need for more
general legislation directed at money laundering and proceeds of crime was soon realised
internationally. These measures should not only relate to drug trafficking, but should at
least include matters involving corruption, fraud and other major money generating
crimes in which organised crime involves itself.
Accordingly, the original limited provisions in the South African drug trafficking
legislation, were replaced by the general provisions of the Proceeds of Crime Act 76 of
1996. These measures are supplemented by the relevant provisions of the International
Co-operation in Criminal Matters Act 75 of 1996. This statute enables the RSA to
participate in international mutual assistance in the fight against organised crime, money
laundering and the confiscation of proceeds of crime. It includes provisions to effect
crime investigation, obtaining evidence, the registration and enforcement of foreign
sentences, compensatory orders, restraint orders and confiscation orders, as well as the
transfer of proceeds of crime across national borders, to facilitate international action
against criminals.
An important statutory measure which is awaited in South Africa, is a dedicated money
laundering statute. The statute should, inter alia, make provision for a central authority
with the necessary infrastructure and expertise to set up a comprehensive central data
bank for the purpose of investigating money laundering. Although a bill has been drafted
in this regard, it is not in a final form and has not been introduced to Parliament.
In the absence of comprehensive money laundering legislation, the Proceeds of Crime Act
contains some (interim) measures criminalizing money laundering and imposing a duty
to report suspicious transactions.
2 DEFINING "PROCEEDS OF CRIME"
In the RSA the "proceeds of crime" of a defendant is defined in s 3 of the Proceeds of
Crime Act 76 of 1996 as "any payment or other reward received or held by the
defendant or over which the defendant has effective control at any time, whether before
or after the commencement of this Act, in connection with any criminal activity carried
on by him or her or any other person".
Read with the definition of "proceeds" and "property" in s 1, it refers to any interest in
any kind of property, including property representing property derived directly or
indirectly from the commission of a criminal offence. The "proceeds of crime" also
include the proceeds of such property.
3 VALUE OF PROCEEDS OF CRIME: THE UPPER LIMIT OF A
CONFISCATION ORDER
From a constitutional perspective, it is of prime importance that the value of the proceeds
of crime should constitute the upper limit of a confiscation order. This restriction provides
the foundation for the argument that confiscation orders are not punitive, but merely
remedial. Constitutional justification for the imposition of criminal sanctions in addition
to confiscation orders, can be found in the remedial nature of the orders. To the extent
that such orders may be regarded as punitive, it can be strongly argued that they form part
of the criminal sanction, and should be considered as such in the decision on sentence.
If this is not done, because the orders are, for example, considered separately in a civil
process, arguments based on constitutional guarantees against excessive punishment and
even double jeopardy, can be expected.
The definition of "proceeds of crime" in the RSA act extends beyond payments and
rewards "received" by the defendant, to include payments and rewards "held" by the
defendant, or over which the defendant has "effective control". However, the value of a
defendant's proceeds of crime relates only to the payments and rewards "received" by
the defendant in connection with criminal activity carried on by him or her or any other
person. (See s 9, which must be read with s 5.) S 12(3)(a) creates a presumption that
certain property "held by" or "transferred to" the defendant who is found to have
benefited from an offence, was "received" by him or her, at a particular stage, as proceeds
of crime. It is the value of the defendant's proceeds of crime, that, in terms of s 8(1)(a),
constitutes the upper limit of a confiscation order. S 2 also requires a payment or reward
to have been "received" by a defendant before the defendant can be found to have derived
any "benefit" (s 8) from the offence or any related criminal activity. Such a benefit is a
prerequisite for a confiscation order in terms of s 8. (The provisions should be read with
the presumptions in s 12 that the defendant has derived a benefit from an offence and that
certain property was received as proceeds of crime.)
This value is calculated by leaving forfeited property out of account. (See s 9(2)(a).)
Those proceeds of crime taken into account in determining the amount to be recovered
under a previous confiscation order against the defendant, are also left out of account.
(See s 9(2)(b).) The logic of these provisions is obvious: Confiscation orders are intended
to be remedial and not punitive. However, it is not explicitly provided in the Proceeds
of Crime Act that restitution and compensation to the victim should diminish the amount
of the confiscation order.
The remedial nature of the confiscation order, as a measure imposed "in addition to any
punishment", would probably in any event require the presiding officer to take restitution
or compensation to the victim into account in the consideration of the "appropriate"
amount of a confiscation order. (See s 8(1).) If this is not done, the amount of the
confiscation order might be challenged constitutionally, because it would then have
obvious punitive consequences, which might disproportionately augment the criminal
sanction imposed on the defendant. These circumstances might in appropriate instances
even necessitate a decision by the court to refrain from enquiring into any benefit derived
from an offence, or, if an enquiry into such benefit has nevertheless been conducted, not
to make any confiscation order. The repeated permissive language of s 8(1) might have
been specifically intended to enable the court to avoid unacceptable punitive
consequences: "... the court... may... enquire... and... the court may... make an order...
of such amount as it may consider appropriate...". Another option which is open to a
potentially prejudiced victim, is to make representations to the prosecutor or the Attorney-General. No confiscation order can be made without an application by the prosecutor,
with the written authority of the Attorney-General. (See s 8(1) and (4).) To the extent that
the victim has an interest in specific property of the defendant, it is also possible for the
victim to object to the inclusion of that interest in the "realisable property" of the
defendant and the inclusion of the value of such interest in the amount which might be
realised. (See s 5(1)(a)(ii) and s 10(5).) S 8(1)(b) provides that the amount of the
confiscation order shall not exceed the amount which might be realised. The provision
that the court may only delay the benefit enquiry to a later stage (after the sentencing of
the defendant), if it is reasonable and justifiable, is another precaution against
unconstitutional punitive consequences. It ensures that the sentence and the confiscation
order are normally considered together, although the confiscation order is made "in
addition to any punishment... impose(d)...". (See s 8(1) and (2).)
An argument that the restitution or compensation to the victim is the result of civil, as
opposed to criminal steps taken against the defendant, will not make any difference to
the punitive nature of the consequences in the circumstances. The South African
Constitutional Court will have the USA jurisprudence at its disposal in a constitutional
challenge directed against civil measures resulting in disproportionate punitive
consequences. It can be expected that the true nature of such consequences will be
decisive in the approach to be adopted by the South African Constitutional Court. This
would be the case, even if the South African legislature should decide to adopt legislation
providing for civil forfeiture procedures completely unrelated to any criminal steps that
might be taken against the defendant.
If the court should disregard the possibility of restitution or compensation to the victim,
it is not only the punitive consequences for the defendant that might give rise to
constitutional challenges. In appropriate circumstances a confiscation order might deplete
the estate of the defendant. Especially in such instances where an appropriate fine has
been imposed on the defendant, there could hardly be justification, from the point of view
of the victim, for the State to receive an additional benefit in the form of a
disproportionate confiscation order. The resulting frustration of the victim's civil claim
for restitution or compensation, could constitute an unconstitutional limitation of his or
her fundamental rights. S 10(1) read with s 10(4)(a)(ii) gives a certain priority to an
obligation to pay an amount under any "resultant order" made by the court, before the
making of the confiscation order. These provisions might provide some protection for the
victim where the court has made a compensation order in his or her favour.
The legal dispensation in the UK differs from that in the RSA in this regard. Preference
is given to victim compensation in the UK. Even the confiscation orders provide a
substantial benefit for victims in the UK, who may not have the means to enforce their
civil claims against the criminal. Monies recovered in terms of a UK confiscation order
can be awarded as compensation to the victim, to ensure that he or she is not prejudiced.
The victim also benefits accordingly from the court orders which are ancillary to the
making and enforcement of a confiscation order, such as restraint, disclosure, repatriation
of assets and receivership orders. This benefit of the victim is enhanced by the fact that
the courts are required to give reasons why compensation orders are not made if they
could have been made. (See Candler 18 et seq, who points out that the law in the USA
differs from that of the UK in this regard.)
The 1997 UN Corruption Report (par 45) advocates the use of forfeited assets for
restitution for victims and to finance law enforcement investigations.
4 ENVISAGED CIVIL "IN REM" FORFEITURE ORDERS
Confiscation orders are orders "in personam" and not orders "in rem". That means the
confiscation orders are directed against specific persons and not against specific property
interests. Confiscation orders are accordingly not property specific and relate to the
payment of an amount of money. Any property can theoretically be realized to satisfy a
confiscation order. To a certain extent such confiscation orders are preferable to and
reach further than forfeiture orders concerning specific property or property interests. The
American dispensation involving "in rem" forfeiture orders has, on occasion, been
labelled as inflexible and sentiments have been expressed preferring the UK model of "in
personam" confiscation orders. (See Candler 40. Civil forfeiture is provided for in 18
USC s 981; 21 USC s 881 and criminal forfeiture in 18 USC s 982; 21 USA s 853. See
also 31 USC s 5313(a), 5316 and 5324; 18 USC s 1956, 1957 and 1960; 21 USC s 853
(narcotics offences); 18 USC s 1963 (racketeering offences); 18 USC s 982(a)(1) (money
laundering offences).) It has become clear that the objective to take away all the economic
advantages gained through crime, requires confiscation to reach beyond seized objects
to the criminal's other assets. (See 1993 UN Corruption Document par 67.)
Nevertheless, the success experienced in terms of the American dispensation is enormous.
Foreign criminal justice officials have often regarded it with envy, categorizing it as a
highly efficient scheme to deprive organized crime of its profits, while simultaneously
generating vast funds and resources to combat organized crime.
Two important factors contributing greatly to the American results, merit special emphasis. In the first instance, it is civil, rather than criminal forfeiture that has proved to be a powerful and efficient weapon in the hands of the prosecuting authority. Secondly, the introduction of the power to make forfeiture orders against immovable property, gave a particularly strong impetus
to the forfeiture measures. (See Mayveal 658). The combination of these two measures
in the hands of enterprising prosecutors, has resulted in enormous gains for the State.
However, as was to be expected, over-zealous abuse of the measures has lead to a
constitutional backlash, demonstrating that some of the spectacular "successes" were
indeed too good to be true.
It is not possible to determine the efficiency of money laundering and proceeds of crime
legislation in the European and the international community yet. A proper assessment
should only be possible with reference to an evaluation of the long term results. It is
nevertheless apparent that the requirement of a criminal conviction often constitutes an
insurmountable problem, preventing the State from reaching the assets of organised
crime. Consequently, criminal forfeiture measures, requiring proof of guilt beyond
reasonable doubt, have been proved to have a relatively limited value. Civil forfeiture
measures are not burdened with the heavy onus of proof. The lighter civil burden of proof
on a balance of probabilities can also, traditionally, be more readily reversed to alleviate
it even further. In the American dispensation, for example, a burden of "probable cause"
requiring only some evidence indicating a link between certain assets and a crime, could
result in a burden on the individual to prove that the assets are not forfeitable. (See
Candler 6.) The risks for the individual resulting therefrom, lead to the proposal of new
legislation at the first session of the 105th Congress, elevating the burden on the State to
"a preponderance of the evidence", or even to "clear and convincing evidence". Specific
provisions have also been proposed to safeguard the interests of the "innocent owner".
The American dispensation is based on an archaic presumption that the State acts against
the offending property ("in rem" - hence citations such as United States v One 1970
Pontiac GTO 529 F.2d 65 (9th Cir 1976); United States v $405,089.23 U.S. Currency 33
F.3d 1210 (9th Cir 1994)). (See also Mayveal 658; 661.) This initially led to a false sense
of security that such measures are not punitive, but merely remedial in nature and cannot
be challenged constitutionally as an excessive form of punishment, or as measures
resulting in double jeopardy. With the advent of the Austin case in 1993, it became clear
that the Supreme Court would not close its eyes for the punitive effects of forfeiture
orders. (See Mayveal 658; 660.)
The problem with in rem forfeiture orders is particularly obvious with reference to the
forfeiture of "instrumentalities" rather than "proceeds" of crime. Whether the forfeiture
of an instrument of crime would be excessive, is not always an easy question to answer.
Focussing on the "taint" of the property, is a suggestion offered in the concurring opinion
of Scalia J in the Austin case. According to him, the value is irrelevant and drug scales
made from pure gold should be forfeited. From this he distinguishes property which
cannot really be regarded as an instrumentality of the offence, because it does not have
a close enough relationship with the offence - such as a building where an isolated drug
sale has occurred. It can certainly be argued that this suggestion might not always provide
satisfactory results and a number of variations on this test can be found in the
jurisprudence of the USA. One such variation includes the obvious factor of the role and
culpability of the owner. (See Mayveal 660.)
Although to a certain extent debated in the USA, there can hardly be any room for doubt
that the proportionality test will play a decisive role to determine the constitutionality
of forfeiture provisions in the South African context. The archaic assumption that the
State may with impunity assume ownership of an instrument of crime, merely on the
ground of the substantial nature and frequency of its involvement in crime, as though the
instrument itself were "guilty" of crime, will not pass constitutional muster in this
jurisdiction.
Allowing everyone with an interest in the property to be forfeited an opportunity to make
representations, is a method that could in some instances make a valuable contribution
to shield forfeiture provisions from a verdict of unconstitutionality. Although the South
African Proceeds of Crime Act does not deal with forfeiture of specific assets, it contains
analogous provisions allowing parties with interests in property that could be realised by
the State, to be heard before a decision is made. A similar approach is followed in s 35
of the Criminal Procedure Act 51 of 1977, which provides for the forfeiture of
instruments of crime after a finding of guilty in a South African criminal court.
5 BURDEN OF PROOF AND PRESUMPTIONS
The sphere of the criminal law has been the playing field where the South African
Constitutional Court has demonstrated its commitment to individual fundamental rights.
The court does not tolerate a reversal of the onus of proof, which might result in a finding
of guilty of an innocent accused. (See Annexure "A" listing these decisions.)
Consequently it can be accepted that the utilisation of presumptions is not the easy
solution to the problem that organised crime seems to succeed in protecting its members
from effective prosecution. The question to be answered now, is whether presumptions
or reversal of the onus of proof can be used efficiently to effect forfeiture or confiscation
orders.
To the extent that a criminal conviction is required for forfeiture orders in criminal
proceedings, reversal of the onus is subject to the strict approach adopted by the South
African Constitutional Court. As far as the (criminal) forfeiture itself and civil forfeiture
is concerned, reversal of the onus will, without any doubt, also be prone to constitutional
litigation.
The American experience has shown that the punitive nature of forfeiture orders cannot
ultimately escape the wrath of constitutional adjudicators. Whenever the empowering
legislation allows the possibility of abuse, a constitutional challenge is likely to ensue.
From the point of view of the punitive nature of forfeiture and confiscation orders,
reverse burdens will be challenged on basically the same grounds as reverse burdens that
might lead to the conviction of an innocent person, or to excessive punishment of a
criminal.
All the normal constitutional arguments against reverse burdens will have to be taken into
account when such legislation is drafted, even if the drafter is of the opinion that the
punitive nature argument can be defeated in the specific instance. Care should be taken
to ensure a rational connection between the reversal of the onus and the circumstances
in which the provision will be applicable. Safeguards should also be enacted to avoid the
possibility of abuse.
Even though it can be argued that the individuals or the enterprises concerned should
always be in the best position to provide evidence of the audit trail of their assets and
funds, it would be unwise to accept this as a guarantee of constitutionality, warranting
legislation providing for such a burden in instances where sufficient grounds could be
absent. The proposals to the USA Congress, calling for the burden on the State to be
elevated from "probable cause" to "a preponderance of the evidence", or even "clear and
convincing evidence", bear witness to the objections that can be expected.
Considering the present South African dispensation as embodied in the Proceeds of Crime
Act, it is to be expected that the far reaching presumptions contained in s 12, will not
escape close constitutional scrutiny by the courts. These presumptions are intended to
assist the State in securing efficient confiscation orders against defendants.
Although a finding of guilty in a criminal trial is a prerequisite for the making of a
confiscation order, the further proceedings that might result in the making of the order,
are governed by different rules. For example, s 35 provides that any question of fact to
be decided by a court in any proceedings in respect of an application contemplated in the
act shall be decided on a balance of probabilities. This apparently includes the inquiry
into the commission of "any related criminal activity" of which the defendant has not
been found guilty and the determining of the amount of the confiscation order concerning
the proceeds of crime received by the defendant (in connection with that "related criminal
activity", as well as the crime of which he or she has been convicted). (See s 8(1).)
Although the defendant will not be sentenced with regard to the "related criminal
activity" proved in accordance with this civil burden of proof, the confiscation order may
be substantial. The expected arguments labelling the confiscation order as punitive, will
lead to the contention that the confiscation order provisions are unconstitutional to the
extent that "punishment" is inflicted in connection with "related" crimes proved only on
a balance of probabilities.
Even to the extent that confiscation orders relate to the crime of which the defendant has
been convicted, the lesser burden of proof regarding the confiscation order itself, might
be attacked with reference to the punitive nature of the confiscation order. From a
comparative perspective, it is interesting to note that, for defendants charged prior to 3
February 1995 in the UK, the Criminal Justice Act 1988 requires proof beyond a
reasonable doubt that the defendant has benefited from the offence, while the Criminal
Justice Act 1993 provides for a burden of proof on a balance of probabilities concerning
defendants charged thereafter. (See Candler 15.)
In the RSA the lesser burden of proof will also apply in instances where the defendant has
absconded before any finding of guilty can be made. S 14 provides for an enquiry in the
absence of such a defendant, that may lead to a confiscation order, even though the
criminal trial may not proceed in absentia. Even the question whether any crime has been
committed by the accused will then have to be proved on a mere balance of probabilities.
The absence of the defendant will make it even less difficult for the State to prove the
facts in such circumstances. Once again the punitive nature of confiscation orders can be
used as an argument to attack the validity of these provisions, which might also be
questioned with reference to the defendant's right to a fair trial and fair administrative
action.
The presumptions provided for in s 12 encroach even further upon the interests of the
defendant to require proof by the State. Furthermore, the presumptions lend themselves
to be applied cumulatively by enthusiastic prosecutors to supplement a lack of evidence.
Consequently, the presumptions are bound to be challenged on constitutional grounds:
S 12(1) is intended to assist the State to prove that the defendant has derived a
benefit from crime, where his or her legitimate sources of income are not sufficient
to justify the interests in any property that he or she holds. Such benefit is a
prerequisite for a confiscation order.
S 12(2) assists the State to prove such benefit and that the defendant holds certain
property as proceeds of crime, where the defendant has been ordered to disclose
facts under s 16(7) and has failed to disclose the facts, or has furnished false
information.
S 12(3) requires a finding that the defendant has benefited from an offence. The
presumptions created in this section facilitate proof that certain property is
proceeds of crime and assist the State to prove the value of proceeds of crime. S
12(3)(c)(ii) explicitly provides for the cumulative application of a specific
presumption that certain property is proceeds of crime and the presumption
facilitating proof of the value of the property.
Presumptions and reversal of the onus to assist the State in its efforts against those alleged
to have benefited from crime, is not limited to the South African legal dispensation. The
UK legislation, for example, makes provision for "assumptions" which are equivalent to
the presumptions found in the RSA. (See Candler 13; 15.)
Art 5 par 7 of the 1988 Vienna Convention (United Nations Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances) invites each party to the
convention to consider reversing the onus of proof regarding the lawful origin of alleged
proceeds or other property liable to confiscation. Reversal of the burden of proof is also
recommended in the Hague Seminar Report on corruption in government (p 30).
In par 73 of the 1993 UN Corruption Document it is suggested that the 1988 Vienna
Convention provides a useful model for the reversal of the onus of proof, which "involves
little risk of unfairness or error". It is submitted in the document that the burden of
identification and explanation of assets should be placed on the possessing official, as a
tactical and psychological weapon against corruption. To avoid the infringement of the
right to a fair trial, the presumption of innocence and the obligation of the State to prove
guilt, the Zimbabwean example is quoted (par 73). The Zimbabwean presumption applies
where certain facts have been established, leaving the accused the possibility of offering
evidence of facts peculiarly within his or her knowledge.
The 1997 UN Corruption Report (par 41) advocates the reversal of the burden of proof
in instances where the suspects "appear to have in their possession or have available,
directly or indirectly, goods and means that are clearly beyond their normal financial
standards". The report warns that such measures might impinge upon the fundamental
rights of the accused, including the right to a fair trial and suggests that the prevailing
circumstances in the respective jurisdictions should be considered to determine whether
the measures would be justified.
6 RIGHT TO SILENCE
Few fundamental rights have been asserted as consistently, as the right to a fair trial and
the right of the accused to silence. A fundamental rights lawyer can now only be amazed
by the explicit attacks on the right to silence, from very respectable and liberal minded
members of the legal fraternity, where allegations of involvement in organised crime,
corruption and money laundering are involved.
The success of organised crime and the incompetence of modern criminal justice systems
to ensure the conviction of those involved, is the source of growing panic in the
international community. Protection of the individual by placing heavy burdens of
disclosure and transparency on the State and its criminal justice system, while shielding
the accused from scrutiny, has lead to calls for a levelling of the playing field.
Organised crime is well developed and its infrastructure is much stronger and more
sophisticated and technologically advanced, than that of many modern criminal justice
systems. The State cannot be seen as the Big Brother bullying the defenceless individual
accused in this context. Any bias in favour of the member of organised crime, spells
disaster for the prosecution.
Unfortunately there is no simple solution to this problem. Not all accused are indeed
members of organised crime. The traditional bias in favour of the accused, is directly
aimed at the protection of the innocent. The philosophy that some criminals should rather
go free than allowing innocent accused to be convicted, cannot merely be discarded.
Consequently, to legislate for (constitutionally sound) exceptional procedures and
burdens of disclosure, to level the playing field between organised crime and the
prosecution, would require an exceptional level of ingenuity.
S 8(5)(a)(iv) of the Proceeds of Crime Act empowers the court to direct the defendant to
tender to the court a statement referred to in s 11(3)(a). S 11(3)(a) places an obligation
on the defendant to comply with the direction of the court by tendering to the court a
statement in writing under oath or affirmation by him or her or by any other person, in
connection with any matter which relates to the determination of the amount which might
be realised as contemplated in s 10(1). Failure to furnish proper information as directed
by the court, is sanctioned by the activation of the presumptions in s 12(2) that the
defendant has derived a benefit from an offence and that any property to which the (non-disclosed or false) information relates, is held by the defendant as proceeds of crime. It
can also be argued that such a failure would constitute an offence in terms of the
provisions of s 32(2).
Failure by the defendant to comply with a s 16(7) order in respect of the discovery of any
facts, including facts relating to any property over which the defendant may have
effective control and the location of such property, constitutes an offence in terms of the
provisions of s 32(2). S 33 provides for heavy penalties, including imprisonment for a
period not exceeding 15 years.
These provisions are not compatible with the notion of an absolute right of the defendant
to remain silent and not to provide evidence which might be harmful to his or her own
interests. The provisions will surely be challenged in terms of the Constitution at some
stage.
International trends and pressure from the international community to limit individual
rights in this regard, must be taken into consideration. Par 11-2 of the 1993 UN
Corruption Document advocates the imposition of comprehensive obligations of
disclosure on government officials, as well as the imposition of sanctions for non-disclosure, approximating the sanctions against corruption. The Hague Seminar Report
contains a recommendation (p 29) of "(o)bligatory disclosure of assets and investments
above a certain threshold, including those of dependants, and disclosure of conflicts of
interests by public servants, officials and politicians in such a manner as to ensure
accountability".
7 PRIVACY AND SECRECY
Individual privacy and secrecy of bank affairs and commercial transactions have for a
long time been given high priority in international fundamental rights dispensations.
Statute books contain a variety of such secrecy and protective provisions. Organised
crime has found the provisions extremely beneficial to their money laundering activities.
The international community is making a determined effort to prevent the legal protection
of privacy and secrecy from jeopardizing investigations into organised crime, corruption
and money laundering. Even formal procedures that might cause delay in the obtaining
of information across borders, are subjected to strong criticism. Statutory measures are
introduced to create exceptions, or exemption from criminal and civil liability, in the
interests of efficient investigations by law enforcement officials.
Financial institutions and other institutions where money laundering activities can be
expected, are required to keep detailed records and to report certain specified transactions
(eg above a threshold of $10 000), as well as transactions they may consider to be
"suspicious". (See, for example, the provisions of the 1991 European Community
Directive and the discussion by Gilmore 23; 35.) Such provisions are also found in
chapter 1 of the UNDCP Model Law on Money Laundering. ("UNDCP" is the acronym
for the United Nations International Drug Control Programme.)
Special provision is made to require extra caution and scrutiny of the individual
concerned in some instances. (See Gilmore 30-2.) Art 8 of the UNDCP Model Law on
Money Laundering contains specific measures for special investigation by financial
institutions, of certain operations.
Financial institutions are also required not to "tip off" the individual concerned. (See
Canadian Guideline and the discussion of the relevant provisions of the 1991 European
Community Directive by Gilmore 35.) This necessarily implies that they are required not
to comply with the audi alteram partem principle and they are at liberty and even obliged
to secretly supply reasons for their suspicions, which might not at all be well-founded.
It is obvious that the privacy, fama and dignity of the individual are seriously threatened
by this new dispensation.
The UNDCP Model Law on Money Laundering even contains provisions to allow
surveillance of bank accounts and telephone lines, as well as access to computer systems
and communication of private records, instruments and documents (art 18). The first
variant requires a mere suspicion for the activation of these drastic powers.
In the context of the investigation of organised crime, money laundering and corruption,
privacy and secrecy have lost much of the original high esteem. It is inevitable that such
inroads made into the protection of fundamental rights are prone to constitutional
challenges. Legislators must take care not to grant carte blanche to investigators, which
will result in the annulment of legislation that might be indispensable to the efficiency of
their investigations. Proper safeguards should be provided to ensure the proportionality
of drastic investigative powers.
South Africa does not have comprehensive money laundering legislation, but the Proceeds
of Crime Act no 76 of 1996 deals to a limited extent with money laundering. Proceeds
of Crime Regulations have been promulgated (Regulation Gazette no 5927 vol 383
Government Notice no R 684 9 May 1997) providing for the information to be reported
and the form in which it should be reported. Much infrastructure and comprehensive
legislation is necessary, however, before centralized investigation with a comprehensive
central data base will be possible.
The South African legislation places a general duty on business undertakings to report
"suspicious" transactions and the grounds for the suspicion. (See s 31 of the act and also
the Proceeds of Crime Regulations.) A notable exception is provided for by the explicit
retention of the common law right to professional privilege between attorney and client
in criminal matters (s 31(1)). "Tipping off" is criminalized by s 32(1) and the penalties
provided for in s 33 include imprisonment for a period not exceeding 15 years.
S 31(3) provides that no legal or contractual obligation as to secrecy and other restriction
on the disclosure of information, shall affect the obligation to report suspicious
transactions. It also excludes liability based on such a disclosure. There can be no doubt
that this constitutes a substantial limitation of fundamental rights relating to fama,
dignitas and privacy, which will not be accepted by everyone affected, without a
constitutional challenge. However, the international trends in this regard will strengthen
the hand of the State in its arguments favouring the constitutionality of the limitations:
Art 5 par 3 of the 1988 Vienna Convention sets the scene for legislation
authorising the furnishing of private information, which would otherwise have
been kept confidential in terms of the requirements of bank secrecy. (See Gilmore
6.)
Art 9 of the 1991 European Community Directive provides the institutions
concerned with legal immunity from suit for breach of contract or other legal
obligations such as customer confidentiality. Art 6 provides that the information
may be used only in connection with the combating of money laundering, but
member states may provide that such information may also be used for other
purposes. (See Gilmore 35-6.)
The UNDCP Model Law on Money Laundering (art 16) excludes criminal and
civil liability for a violation of professional secrecy where a report has been made
in good faith, even if the report is proved to be unfounded. Art 19 of the Model
Law also explicitly disallows bank secrecy as an obstacle in this context.
The 1997 UN Corruption Report (par 16) states: "In view of the complex nature
of corrupt practices and the difficulties in detecting and investigating related
crimes, the elimination or curtailment of bank secrecy is essential." To balance the
interests of the individual, it is stated in par 43 that states should adopt measures
to ensure that confidential information is not disclosed to the public or to the
media.
The Financial Action Task Force on Money Laundering (FATF) has also made
recommendations concerning mandatory reporting of certain transactions and
customer identification (discussed by Gilmore 11).
8 EFFECT OF INTERNATIONAL AND FOREIGN LAW ON
CONSTITUTIONALITY
Organised crime and the related money laundering problem is generally viewed as a
global threat, which is immune to the traditional criminal justice systems. International
calls for drastic and even draconian measures to combat organised crime are steadily on
the increase. The measures proposed are in the nature of emergency legislation not
normally associated with the popular concepts of freedom and democracy found in liberal
human rights dispensations.
The highly valued concept of bank secrecy, for example, has already been discarded to
a great extent, within the context of the global fight against money laundering. These
initiatives emanate from liberal western democracies and are enshrined in international
treaties, as well as in the municipal law of liberal democracies where the highest priority
is (otherwise) given to fundamental rights.
At international conferences delegates are encouraged to promote such drastic measures
in their home countries. Strong arguments are presented for limitation of the right to
silence of the accused as a necessary instrument to fight organised crime. Reversal of the
burden of proof is also advocated in this context. Much time is devoted at these
conferences to exchange ideas on more efficient forfeiture and confiscation legislation,
to enable the State to deprive organised crime of its proceeds, even where evidence is
flimsy and criminal prosecution cannot succeed. Some of the ingenious measures
proposed closely resemble the type of legislation traditionally condemned as an abuse of
human rights. (See, for instance, examples of legislation involving detention without trial,
reverse burden provisions and other emergency measures such as those that were
contained in emergency regulations during the South African state of emergency.)
The inevitable conclusion is that we are entering an era of a global state of emergency
caused by the escalation of organised crime and its inseparable companion, corruption.
Draconian enhancements of the criminal justice systems to cope with the threat, are
increasingly perceived to be justified limitations of fundamental rights.
The international response to organised crime and money laundering has direct
constitutional implications in South Africa. S 36 and 39(1)(a) of the South African
Constitution attach special constitutional significance to the dispensations in other open
and democratic societies based on human dignity, equality and freedom. Provision is
made for the limitation of fundamental rights to the extent that it is reasonable and
justifiable in such an open and democratic society. The South African Constitution
furthermore endows international and foreign law with persuasive force in the
interpretation of the South African Bill of Rights. S 39(1)(b) and (c) explicitly requires
the consideration of international law and authorises the consideration of foreign law, for
the purposes of the interpretation.
Drastic provisions in international law and in the municipal law of other jurisdictions
falling in this category of open and democratic societies, will be strongly indicative of the
constitutional validity of similar provisions in South Africa.
The 1988 Vienna Convention opens the door for the confiscation and forfeiture of the
proceeds of crime, as well as its instrumentalities (art 5). The objective is to incapacitate
criminals by depriving them of the physical and financial ability to proceed with crime,
to prevent them from unjustly enriching themselves, to deter them and others from crime
by undermining its profitability and to protect the community from the circulation of
prohibited items. (See Gilmore 5.) The preamble to the 1988 Vienna Convention states
that the parties are: "Determined to deprive persons engaged in illicit traffic of the
proceeds of their criminal activities and thereby eliminate their main incentive for so
doing..."
The international fist was clenched even more firmly with the adoption of a convention
on laundering, search, seizure and confiscation of the proceeds of crime, by the
Committee of Ministers of the Council of Europe, in September 1990. Another instrument
of importance, is the June 1991 Council Directive on Prevention of Use of the Financial
System for the Purpose of Money Laundering (referred to as the 1991 European
Community Directive).
The 1990 European Convention obliges member states to confiscate proceeds of crime
and implicitly encourages wide ranging measures. (See Gilmore 14.)
In the 1991 European Community Directive, the emphasis is on the obligations of credit
and financial institutions to facilitate the efficient detection, prevention, investigation and
prosecution of money laundering. (See Gilmore 16.) Art 15 permits each country to
adopt even stricter measures than those provided for. (Some states have in fact instituted
policies that are stricter than those required by the directive - see Gilmore 24.) This is a
clear indication of the international climate in which individual countries are called upon
to institute drastic measures to combat these crimes. Art 12 of the directive obliges
member states to extend its provisions to include those professions and undertakings
whose activities are likely to be used for money laundering purposes. It is not difficult to
conclude that the logical effect of this approach will be the continuous expansion of the
field of application of the provisions, progressively limiting individual rights as the
process continues. The proportionality between the limitation of the rights and the real
risk of money laundering will have to be determined by the court, if the provisions are
challenged in the South African courts. (See also Gilmore 22; 42.) The courts will also
be bound to take the measures that are internationally considered to be appropriate, into
account.
9 CONCLUSION
It is not surprising that the international community and individual states have embarked
upon a number of initiatives to determine the existence, nature and efficiency of the
municipal money laundering legislation of states.
Countries providing money laundering opportunities to organised crime, can benefit
financially to the detriment of the international community. This point can be illustrated
clearly with reference to the Seychelles. The Economic Development Act adopted by the
Seychelles in November 1995 "to ensure a very high level of sustainable economic
development for the Seychelles and its people" provides immunity from prosecution
calculated to procure investment by organised crime. These measures were even
constitutionally entrenched to make them durable and reliable. The president of the FATF
characterised the enactment as being clearly designed to attract capital by permitting
international criminal enterprises to shelter both themselves and their illicitly-gained
wealth from pursuit by legal authorities. The FATF resolved to place all available
pressure on the government to repeal the legislation. It also invoked FATF
Recommendation 21 and urged financial institutions world-wide to scrutinise closely
business relations and transactions with persons, companies and financial institutions
domiciled in the Seychelles. (See Gilmore 33.)
Countries not implementing efficient proceeds of crime and money laundering measures, will be identified by the international community and sanctioned in an appropriate way. A too liberal protection of fundamental rights, such as the right to privacy and even the right to free economic activity, might eventually lead to international sanctions against a country, if the protection has the effect of enhancing the interests of criminals benefiting from it.
10 BIBLIOGRAPHY
Candler Linda J "Tracing and Recovering Proceeds of Crime in Fraud Cases: A
Comparison of U.S. and U.K. Legislation" The International Lawyer Vol 31 No 1 Spring
1997 p 3 (cited as Candler)
Centre for Social Development and Humanitarian Affairs "Crime Prevention and
Criminal Justice in the Context of Development: Realities and Perspectives of
International Cooperation: Practical Measures against Corruption" United Nations:
International Review of Criminal Policy: Nos 41 and 42 1993 New York 1993 (cited as
1993 UN Corruption Document)
Department of Technical Co-operation for Development and Centre for Social
Development and Humanitatian Affairs "Corruption in Government" United Nations:
Report of an Interregional Seminar in The Hague: 11-15 December 1989 TCD/SEM.
90/2; INT-89-R56 New York 1990 (cited as Hague Seminar Report)
Gilmore William Practice in Europe: European Money Laundering Developments
University of Edinburgh September 1996 (cited as Gilmore)
Mayveal Gary M "Criminalizing Civil Forfeitures" Michigan Bar Journal July 1995 p
658 (cited as Mayveal)
Office of the Superintendent of Financial Institutions (Canada) Guideline for Deterring
and Detecting Money Laundering August 1996 (cited as Canadian Guideline)
Secretary-General of the United Nations "Action against corruption and bribery: Report of the Secretary-General: Addendum" Promotion and Maintenance of the Rule of Law and Good Governance: Action Against Corruption United Nations Economic and Social Council E/CN.15/1997/3/Add.1 8 April 1997 (cited as 1997 UN Corruption Report)
ANNEXURE "A"
CONSTITUTIONAL COURT DECISIONS ON THE VALIDITY OF
PRESUMPTIONS AND REVERSAL OF THE ONUS OF PROOF
(Available on the internet at http://www.law.wits.ac.za/lawreps.html or
http://sunsite.wits.ac.za/law/lawreps.html#bruce)
A CRIMINAL MATTERS
S v Bequinot
CCT 24/95 (18 November 1996)
Constitutionality of the onus of proof being on an accused who is in receipt of stolen goods, in terms of s 37 of the General Law Amendment Act 62 of 1955.
S v Bhulwana; S v Gwadiso
CCT 12/95, 11/95 (29 November 1995)
Constitutionality of section 21(1)(a)(i) of the Drugs and Drug Trafficking Act 140 of
1992.
S v Coetzee and Others
CCT 50/95 (6 March 1997)
Constitutionality of the presumption in s 245 of the Criminal Procedure Act 51 of 1977
relating to the making of a false representation, and the constitutionality of s 332(5) of
the same act relating to the liability of directors and employees of a corporation for
offences committed by that corporation.
S v Julies
CCT 7/96 (11 June 1996)
Constitutionality of s 21(1)(a)(iii) of the Drugs and Drug Trafficking Act 40 of 1992 - the
presumption that a person found in possession of a quantity of an undesirable dependence
producing substance is presumed to be dealing in that substance.
S v Mbatha; S v Le Roux and others
CCT 19/95, CCT 35/95 (9 February 1996)
The constitutionality of s 40(1) of the Arms and Ammunition Act 75 of 1969. The
subsection provides that, where articles controlled by the Act are proved to have been in
or on any premises, a person in charge of or present at or occupying the premises is
presumed to be in possession of those articles.
S v Ntsele
CCT 25/97 (14 October 1997)
Constitutionality of s 21(1)(b) of the Drugs and Drug Trafficking Act 140 of 1992.
Presumption of dealing in dagga when dagga plants found on cultivated land.
Scagell and others v Attorney-General, Western Cape and others
CCT 42/96 (12 September 1996)
Constitutionality of sections of the Gambling Act 51 of 1965, providing evidential
presumptions relating to the offence of playing or permitting the playing of prohibited
gambling games.
S v Zuma and others
CCT 5/94 (5 April 1995); 1995 (2) SA 642 (CC)
Constitutionality of the presumption relating to the admissibility of confessions in s
217(1)(b)(ii) of the Criminal Procedure Act
B CIVIL MATTERS
Prinsloo v Van der Linde and another
CCT 4/96 (18 April 1997)
Constitutionality of the presumption of negligence in s 84 of the Forest Act 122 of 1984.
ANNEXURE "B"
SELECTION OF SOME IMPORTANT PROVISIONS OF THE PROCEEDS OF
CRIME ACT 76 OF 1996
1 Definitions
'proceeds', in relation to an offence, means any property or part thereof which was
derived directly or indirectly as a result of-
(a) the commission in the Republic of such offence;
(b) any act or omission outside the Republic which, if it had occurred
in the Republic, would have constituted such an offence,
and includes any property representing property so derived;
'property' means money or any other movable, immovable, corporeal or
incorporeal thing and includes any interest therein and all proceeds thereof;
3 Proceeds of crime
For the purposes of this Act, any payment or other reward received or held by the
defendant or over which the defendant has effective control at any time, whether before
or after the commencement of this Act, in connection with any criminal activity carried
on by him or her or any other person, shall be his or her proceeds of crime.
5 Value of property
(1) For the purposes of this Act, the value of property, other than money, in
relation to any person holding the property, shall be-
(a) where any other person holds an interest in the property-
(i) the market value of the property; less
(ii) the amount required to discharge any encumbrance on the
property; and
(b) where no other person holds an interest in the property, the market
value of the property.
(2) Notwithstanding the provisions of subsection (1), any reference in this Act to
the value at a particular time of a payment or reward, shall be construed as a reference to-
(a) the value of the payment or reward at the time when the recipient
received it, as adjusted to take into account subsequent fluctuations
in the value of money; or
(b) where subsection (3) applies, the value mentioned in that
subsection, whichever is the greater value.
(3) If at the particular time the recipient holds-
(a) the property, other than cash, which he or she received, the value
concerned shall be the value of the property at the particular time;
or
(b) property, or any part thereof, which directly or indirectly represents
in his or her hands the property which he or she received, the value
concerned shall be the value of the property, in so far as it
represents the property which he or she received, at the relevant
time.
9 Value of proceeds of crime
(1) Subject to the provisions of subsection (2), the value of a defendant's proceeds
of crime shall be the sum of the values of the payments or other rewards received by him
or her at any time, whether before or after the commencement of this Act, in connection
with the criminal activity carried on by him or her or any other person.
(2) In determining the value of a defendant's proceeds of crime the court shall-
(a) where it has made a declaration of forfeiture or where a declaration
of forfeiture has previously been made in respect of property which
is proved to the satisfaction of the court-
(i) to have been the property which the defendant received in
connection with the criminal activity carried on by him or
her or any other person; or
(ii) to have been property, or any part thereof, which directly or
indirectly represented in the defendant's hands the property
which he or she received in that connection,
leave the property out of account;
(b) where a confiscation order has previously been made against the
defendant leave out of account those proceeds of crime which are
proved to the satisfaction of the court to have been taken into
account in determining the amount to be recovered under that
confiscation order.
ANNEXURE "C"
SELECTION OF SOME RELEVANT LEGISLATIVE PROVISIONS RELATING
TO CONFIDENTIALITY CONCERNING BUSINESSES AND FINANCIAL
INSTITUTIONS
Protection of Business Act 99 of 1978 after amendment by the International
Co-operation in Criminal Matters Act 75 of 1996:
Section 1 (1) Notwithstanding anything to the contrary contained in any law or other
legal rule, and except with the permission of the Minister of Economic Affairs-
(a) no judgment, order, direction, arbitration award, interrogatory,
commission rogatoire, letters of request or any other request
delivered, given or issued or emanating from outside the Republic
in connection with any civil proceedings and arising from any act or
transaction contemplated in subsection (3), shall be enforced in the
Republic;
(b) no person shall in compliance with or in response to any order,
direction, interrogatory, commission rogatoire, letters of request or
any other request issued or emanating from outside the Republic
in connection with any civil proceedings, furnish any information
as to any business whether carried on in or outside the Republic.
FINANCIAL INSTITUTIONS (INVESTMENT OF FUNDS) ACT 39 OF 1984
'financial institution' means-
(a) any institution referred to in paragraph (a) or (b) of the definition of
'financial institution' in section 1 of the Financial Services Board
Act, 1990 (Act 97 of 1990);
(b) any medical scheme registered in terms of the Medical Schemes
Act, 1967 (Act 62 of 1967);
7 Records and entries in account books admissible in evidence
The records of a financial institution and of a nominee company or trust controlled
or administered by that institution and the books of account of the institution, company
or trust are, in any proceedings under this Act, admissible as prima facie evidence of the
matters, transactions and accounts therein recorded, on the production of a document
purporting to be an affidavit by one of the directors, officials, employees or agents of the
institution or company or by an inspector appointed under the Inspection of Financial
Institutions Act, 1984, or section 8A of the South African Reserve Bank Act, 1944 (Act
29 of 1944), or of other sufficient evidence, to the effect that those records or books of
account are or have been the ordinary records and books of account of the institution,
company or trust and that those records have been kept or those entries have been made
in the books of account in the ordinary course of business.
FINANCIAL SERVICES BOARD ACT 97 OF 1990
'financial institution' means-
(a) (i) any pension fund organisation registered in terms of the
Pension Funds Act, 1956 (Act 24 of 1956), or any person
referred to in section 13B of that Act administering the
investments of such a pension fund or the disposition of
benefits provided for in the rules of such a pension fund;
(ii) any friendly society registered in terms of the Friendly Societies Act, 1956 (Act 25 of 1956), or any person in charge of the management of the affairs of such a society;
(iii) any 'unit trust scheme' as defined in section 1 of the Unit Trusts Control Act, 1981 (Act 54 of 1981), or any management company or trustee in relation to such a scheme;
(iv) any 'scheme' as defined in section 1 of the Participation
Bonds Act, 1981 (Act 55 of 1981), or any manager or
nominee company in relation to such a scheme;
(v) any 'stock exchange', 'member' or 'stock-broker' as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act 1 of 1985), or any person referred to in section 4 (1) of that Act managing investments as contemplated in that section;
(vi) any 'financial exchange', 'member' or 'recognised clearing
house' as defined in section 1 of the Financial Markets
Control Act, 1989 (Act 55 of 1989), or any person referred
to in section 5 (1) of that Act managing investments as
contemplated in that section;
(vii) any 'registered insurer' as defined in section 1 (1) of the Insurance Act, 1943 (Act 27 of 1943);
(viii) any agent, broker or other person contemplated in section
20bis of the Insurance Act, 1943;
(ix) any person deemed, in terms of section 60 of the Insurance
Act, 1943, to be carrying on insurance business in the
Republic;
(x) any person rendering or who is to render services contemplated in section 23A(1) of the Insurance Act, 1943;
(xi) any 'central securities depository' or a 'depositary institution'
as defined in section 1 of the Safe Deposit of Securities Act,
1992 (Act 85 of 1992), or any member of such a securities
depository;
(b) (i) a bank as defined in section 1 (1) of the Banks Act, 1990
(Act 94 of 1990), or a mutual bank as defined in section 1 (1)
of the Mutual Banks Act, 1993 (Act 124 of 1993), which
deals with trust property as a regular feature of its business;
or
(ii) any other person who or which deals with trust property as
a regular feature of his, her or its business, but who is not
registered, licensed, recognised, approved or otherwise
authorised to deal so in terms of any Act, other than the
Companies Act, 1973 (Act 61 of 1973), the Close
Corporations Act, 1984 (Act 69 of 1984), and the Trust
Property Control Act, 1988 (Act 57 of 1988);
22 Preservation of secrecy
(1) No member or alternate member of the board or person referred to in section
13 (1) or member of the board of appeal shall disclose to any person, except for the
purposes of the performance of his duties or the exercise of his powers in terms of this
Act or any other law or when required to do so before a court or under any law, any
information relating to the affairs of the board or any other person acquired by him in the
performance of his duties or the exercise of his powers.
(2) Notwithstanding the provisions of subsection (1) the executive officer may
disclose to any foreign financial services regulatory authority information relating to a
particular financial institution or a particular individual who is or was involved in a
particular financial institution or financial service if the executive officer is of the opinion
that taking into consideration the public interest, such information will be of importance
to the relevant foreign financial services regulatory authority.
INSPECTION OF FINANCIAL INSTITUTIONS ACT 38 OF 1984
'financial institution' means-
(a) an insurer registered in terms of the Insurance Act, 1943 (Act 27 of
1943), and includes an agent for brokers or underwriters at Lloyds,
or any other person in respect of whom section 20bis of that Act or
a regulation made under section 23A of that Act applies;
(b) a pension fund organization registered in terms of the Pension Funds
Act, 1956 (Act 24 of 1956);
[NB: Para. (b) has been substituted by s. 32 of the Financial Institutions Amendment Act
83 of 1992, a provision which will be put into operation by proclamation.
(c) a friendly society registered in terms of the Friendly Societies Act,
1956 (Act 25 of 1956), or a person carrying on the business of the
control and administration of the affairs of such a friendly society;
(d) ......
[Para. (d) deleted by s. 13 (a) of Act 6 of 1987.]
(e) ......
[Para. (e) substituted by s. 106 of Act 82 of 1986 and deleted by s. 13 (a) of Act 6 of
1987.]
(f) a medical scheme registered in terms of the Medical Schemes Act,
1967 (Act 72 of 1967);
(g) a management company registered in terms of the Unit Trusts
Control Act, 1981 (Act 54 of 1981), or a unit trust scheme as
defined in that Act;
8 Observance of secrecy
(1) A person carrying out an inspection under this Act shall preserve, or aid in
preserving, secrecy with regard to all matters that may come to his knowledge in the
performance of his duties and shall not communicate any such matter to any person save
to the registrar or the financial institution, person, partnership or company concerned or
its lawful representative or by order of a court of law: Provided that-
(a) any information obtained by the registrar in the course of an
inspection under this Act or from a report by an inspector-
(i) may be used by the registrar or his staff in connection with
any financial institution, person, partnership or company;
and
(ii) may at the discretion of the registrar be conveyed to the
Master of the Supreme Court; and
[Para. (a) substituted by s. 26 (1) of Act 57 of 1988.]
(b) if the registrar has reason to believe that an offence or irregularity
affecting any department of State or the Registrar of Deposit-taking
Institutions has been committed, he may convey information
regarding that offence or irregularity to the department or Registrar
concerned;
[Para. (b) substituted by s. 9 of Act 54 of 1991.]
(c) if the registrar has reason to believe that any person who acted in
the capacity of auditor to a financial institution did not comply with
the provisions of section 20 (5) of the Public Accountants' and
Auditors' Act, 1991 (Act 80 of 1991), the registrar may send a copy
of the report by an inspector who inspected the affairs of such
institution as well as any other information with regard to the affairs
of such financial institution obtained by him as a result of the
application of this Act, to the Public Accountants' and Auditors'
Board referred to in section 2 of the Public Accountants' and
Auditors' Act, 1991;
[Para. (c) added by s. 4 (c) of Act 92 of 1988 and substituted by s. 53 of Act 104 of
1993.]
(d) if the registrar is of the opinion that a report of an inspector who
inspected the affairs of a financial institution, or that any
information obtained by the registrar as a result of the application
of this Act, may assist the liquidator of such institution to carry out
his duties, to perform his functions or to exercise his powers with
regard to the liquidation of such institution, he may submit to that
liquidator a copy of such report or such information.
[Para. (d) added by s. 4(c) of Act 92 of 1988.]
(2) Subject to the provisions of subsection (1) every member of the staff of the
registrar shall preserve, or aid in preserving, secrecy with regard to all matters that may
come to his knowledge in the performance of his official duties from any report by the
registrar or an inspector.
SOUTH AFRICAN RESERVE BANK ACT 90 OF 1989
33 Preservation of secrecy
(1) No director, officer or employee of the Bank, and no officer in the Department
of Finance, shall disclose to any person, except to the Minister or the Director-General:
Finance or for the purpose of the performance of his duties or the exercise of his
functions or when required to do so before a court of law or under any law, any
information relating to the affairs of the Bank or a shareholder or customer of the Bank
acquired in the performance of his duties or the exercise of his functions, or any other
information acquired by him in the course of his participation in the activities of the
Bank.
(2) No person shall disclose to any other person any information contained in any
written communication which is in any manner marked as confidential or secret and
which has been addressed by the Bank to any person or which has been addressed by any
person to the Bank, except-
(a) for the purposes of the performance of his duties or the exercise of
his powers in terms of any law or when required to do so before a
court of law; or
(b) with the written consent of both the sender and the recipient of that
communication.
COMPANIES ACT 61 OF 1973
440I Preservation of secrecy
(1) No person shall, except for the purposes of carrying out his functions or
performing his duties in terms of this Act or for the purpose of legal proceedings under
this Act or when required to do so by any court or under any law, disclose to any other
person any information acquired by him in the carrying out of his functions or the
performance of his duties in terms of this Chapter and relating to the business or affairs
of any other person.
(2) Any person who contravenes the provisions of subsection (1) shall be guilty
of an offence.
CREDIT AGREEMENTS ACT 75 OF 1980
28 Secrecy
No person shall in respect of any business undertaking disclose any information
which came to his knowledge in the performance of his duties or functions under this Act,
except-
(a) for the purpose of performing his duties or functions in terms of this
Act; or
(b) when required in respect of criminal proceedings by order of any
competent court or in terms of any law.
POST OFFICE ACT 44 OF 1958
65 Secrecy
No person shall, in respect of the transactions of any depositor in the Savings Bank
or any holder of a National Savings Certificate, disclose any information (including the
name of any such depositor or holder) which came to his knowledge in the performance
of his duties and functions in terms of this Act, except-
(a) to an employee appointed by the postal company to assist in
carrying out the provisions of this Chapter;
(b) to the Commissioner for Inland Revenue, for the purposes of any
law relating to the imposition of any tax or levy;
(c) to the Master in relation to the administration of the estate of any
deceased depositor in the Savings Bank or holder of a National
Savings Certificate; or
(d) when required by order of a competent court:
Provided that nothing in this section contained shall be deemed to limit the authority of
the auditors of the successor company to require a disclosure of such accounts and
documents as may be necessary to enable them to carry out the duties imposed upon them
by law.
[S. 65 substituted by s. 5 of Act 13 of 1974, amended by s. 13 of Act 37 of 1984 and
substituted by s. 27 of Act 85 of 1991.]