The oppressive guises of the anti-money laundering requirements and their harsh effects on the economy

To the assertion of various guises of perversion, or to be sure, the manifestation of fascism, is the use of the instrument called reputational risk, relied on by no other than banks, the writer says. Picture: Karen Sandison, Independent Newspapers.

To the assertion of various guises of perversion, or to be sure, the manifestation of fascism, is the use of the instrument called reputational risk, relied on by no other than banks, the writer says. Picture: Karen Sandison, Independent Newspapers.

Published Nov 13, 2023


By Bheki Gila

The beginning of 2023 has ushered in an era of anti-money laundering legislation through the General Laws Amendment Act promulgated into law in the final days of December 2022.

It could hardly be argued that the due diligence mechanisms it introduced were not presaged by similar inclinations ever since the New York twin towers succumbed to a terror attack on September 11 of 2001.

It is now official however.

The era of uncertainty is upon us!

When laws are drafted such that the authority of enforcing them is not determined by statute, it leaves the citizen without anyone to hold accountable.

Worse still, the procedure leading up to the determination and subsequently pronouncement of money laundering or otherwise, is unpredictable, unknown, partial, insidious and altogether a preserve of a legally unaccountable clique.

There is no definition of what money laundering is, the drafters of the legislation fervently hoping that everyone already knows what it connotes.

For its inelegance, the Act introduced a very strange philosophic basis of relationship between citizens and capital. By this dexterity, all money is presumed dirty and laundered until proved otherwise.

Somewhere in the arcane folds of due diligence, is found a new kind of presumed criminal which criminal law does not know. This is a ‘politically exposed person’ or ‘PEP’. It is not a defined term and by extension, the presumed culpability attributable to this presumed criminal, is importunately inchoate, considering that there are hundreds of thousands of South Africans who fall into this category merely by reason of having been employed by the government.

And therefore they are subsumed into a new class of suspects who are presumed guilty until they prove themselves innocent.

It beggars the quintessential question, why would anyone want to be employed by government if unwittingly, they would be branded as such simply by rendering their best talents learnt for the purpose.

Also, all politicians in Parliament, in the provinces, the municipalities and in the executive, past and present, are presumed walking criminals, continually struggling to exculpate themselves from the appellation, as they try explaining themselves to invisible and unseen committees with inscrutable agendas who have more power than the Constitution or the courts designed to enforce it.

How did Parliament and its ubiquitous wisdom agree to this arrangement? Time has got all the answers but only money can tell.

By extension, most recipients of cash from offshore jurisdictions are presumed counterparts to money laundering until they prove themselves innocent.

When the representatives of the people assembled in the hallowed chambers of Parliament delegate their powers to bankers away from the prying eyes of the impartial law courts, small wonder fascism has come to stay, all in the fundamentalist holy cause of preventing money laundering.

It is instructive to be reminded of the fair treatise of Arthur R. Hogue, the common law historian, that the legacy of the medieval law resides in the persistence and force in the modern world that there are limits to the power of ruling, that all government agencies and the law courts themselves must operate according to known rules and procedures.

And so should bankers!

Jason Stanley describes fascism’s choreography of deception and the science of coercing masses through spineless governments by using ten steps. Primary among all of them, is the tool of a mystic past.

In the past, when there was no BRICS, all money was clean.

There are many versions of this perversion of our legal expectation from the prescripts of a Constitution that prides itself as the best in the world.

The expectation, as a starting point, flows from a social compact between the blood of the owners of the Constitution and the keepers of its sanctity that the Constitution shall prevail at all times. And as it commands, so shall we oblige.

The premium of this compact, lies in its believability and trust, the only two parts of our sovereignty that no one and no secret banking committee must violate. If any one of them or by dint of misfortune both are impugned, the guardrails that protect the sanctity of life and the many inviolable freedoms that undergird it shall be lost.

As a consequence, our ordered existence may be visited by violence, making our lives, short, nasty and brutish.

To the assertion of various guises of perversion, or to be sure, the manifestation of fascism, is the use of the instrument called reputational risk, relied on by no other than banks.

It is not defined anywhere. No one knows what it is. The law courts to our collective chagrin, are not curious in wanting to know what it is.

They are only content that if the bankers use it, even if to violate rights of individuals or corporates, then it must be necessarily and incontestably justified.

Setting a country on a slope of wholesale injustice, takes a few incorrigible judicial missteps.

It is not certain whether or not grey-listing and anti-money laundering fiat is an arteriosclerosis of our economic blood flow intended to achieve a sophisticated version of regime change.

It is not impossible also. The fact however, is that our financial inflows from foreign direct investment have trickled to an asphyxiating halt. And everywhere in the Republic, there is a thick aroma of regime change billowing up into dark and voluble cantankerous clouds.

Parliament must urgently convene to consider the draconian powers of this legislation and its deleterious effects on the lives of the citizens and their inviolable freedoms.

All they have to do is to prescribe how a money laundering investigation must be conducted, by who, for how long and the template of announcing the outcome of such due diligence.

It should be possible to prescribe what the limits of such an investigation are, and to the extent determinable, what is the legal status of the information collected by the individual investigator.

For indeed, a due diligence is a legal investigation into the life of an individual even on matters completely unrelated to sending or receiving money.

Ambassador Bheki Gila is a Barrister-at-Law.