Makwakwa’s alleged return to SARS must be explained

The DA has been reliably informed that Mr Jonas Makwakwa, who has been on special leave pending the outcome of an investigation into how large amounts of money ended up in his bank account, will return to work any day now.
The DA has therefore written to the Chairperson of the Standing Committee on Finance  (SCOF) to request that SARS be required to report in detail on the Makwakwa matter.
This must include:

  • A detailed explanation for the alleged return to SARS of Jonas Makwakwa;
  • An unabridged copy of the Hogan Lovells investigation report;
  • Whether the Financial Intelligence Centre has been informed of the outcome of the Hogan Lovells investigations; and
  • What has been the outcome of the criminal investigation into the Makwakwa/Elskie matter by the Hawks?

On the 15th of September 2016, SARS commissioned Hogan Lovells to investigate FICA referrals that large amounts of cash deposited into Makwakwa’s as well as Kelly-Ann Elskie bank accounts.
Despite repeated requests by the DA for progress reports on the Hogan Lovells investigation SARS have steadfastly refused to give any reports.
It now appears that the Hogan Lovells investigation has been concluded and Makwakwa has returned to work.
Information received indicates that Makwakwa will be assigned to a new position at SARS and that all cell phones, including that of the SARS Commissioner, Tom Moyane, have been prohibited from being taken into Block A of the SARS Head Office in Pretoria that houses SARS senior management.
SARS must confirm Makwakwa’s return and fully account for it.

Battle over the implementation of the FIC Amendment Act far from over in Parliament

We welcome the fact that the Minister of Finance, Malusi Gigaba, has signed and gazetted the Financial Intelligence Centre Amendment Act (No. 1 of 2017), which is one of the most important “legislative weapons” in the fight against corruption in South Africa.
However, the battle over the implementation of this legislation is far from over because the implementation of the provision ensuring that “Domestic Prominent Influential Persons”, doing business with the state above a certain threshold amount, will be subjected to enhanced scrutiny by financial institutions, is now going to be delayed until after 02 October 2017.
There is a risk that the process of determining the threshold amount, taken together with the process of generating the required database, may cause an undue delay or even an indefinite delay, in implementing the Financial Intelligence Amendment Act (No. 1 of 2017).
Moreover, an “inter-departmental forum”, which is not provided for in the legislation, and for which there is no authority in law, will be established to replace the “Counter-Money Laundering Advisory Council”.
There are no particulars provided about the establishment of the “inter-departmental forum”, but there is a real risk that it may be dominated by the “security cluster”, and amount to a “power grab” by the “security cluster”, who are desperate to get control of the Financial Intelligence Centre.
The formation of the “inter-departmental forum”, taken together with the delay in implementing the provisions relating to “Domestic Prominent Influential Persons” doing business with the state could have the effect of “defanging” the Financial Intelligence Centre Amendment Act (No. 1 of 2017).
That is why we will write to the Chairperson of the Standing Committee on Finance, Yunus Carrim, requesting that he schedule a hearing on the progress of implementing the Financial Intelligence Centre Act (No. 1 of 2017).

There is now a risk Malusi Gigaba may delay the implementation of the Fica Bill

There is now a risk that the Minister of Finance, Malusi Gigaba, may delay the implementation of the Financial Intelligence Centre Amendment Bill [B33D-2015], which is one of the most important legislative weapons in the fight against corruption in South Africa.
The Financial Intelligence Centre Amendment Bill provides for the ongoing monitoring of the business relationships, sources of wealth and sources of funds of “domestic prominent influential persons”, and family members and close associates of “domestic prominent influential persons”, in South Africa.
What this means is that President Jacob Zuma and his most important clients, the Guptas, are going to feel the heat as their business relationships, sources of wealth and sources of funds are subjected to ongoing monitoring by financial institutions in South Africa.
However, the battle is far from over and there could still be significant delays in implementing the legislation because, despite being signed into law by President Jacob Zuma, the legislation only actually commences on a date to be determined by the minister and published in the Government Gazette.
The Financial Intelligence Centre must, for example, still produce an official list of “domestic prominent influential persons” and of family members and known close associates of “domestic prominent influential persons”.
This will be a massive task because the list of “domestic prominent influential persons” includes, for example, senior executives, as well as family members and close associates of senior executives, of all companies supplying goods and services above a threshold amount, which must be determined by the minister and published in the Government Gazette.
There are also doubts about whether the Financial Intelligence Centre, which only has a budget of R289 million for 2017/18, will have the resources to effectively implement the Financial Intelligence Centre Amendment Bill.
The minister will no doubt be under political pressure to delay the implementation of the legislation to protect his political master’s most important clients, the Guptas.
The minister should, therefore, take decisive action and set out clear timeframes and budgets for the implementation of the Financial Intelligence Centre Amendment Bill.
Whatever the case, we will have to very carefully monitor the implementation of the Financial Intelligence Centre Amendment Bill.
And I will, therefore, be requesting the Chairperson of the Standing Committee on Finance, Yunus Carrim, to schedule a meeting to probe the readiness of the Financial Intelligence Centre to implement the Financial Intelligence Centre Amendment Bill in South Africa.