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ANALYSIS

Terrorism financing: The perfect ruse for a state security clampdown on NGOs and churches

Terrorism financing: The perfect ruse for a state security clampdown on NGOs and churches
Minister in the Presidency, Khumbudzo Ntshavheni. (Photo: Gallo Images / Luba Lesolle)

Registered non-profits (including churches) must now annually submit additional information to the Department of Social Development (the exact nature of which will be determined in consultation with the Financial Intelligence Centre and the minister of finance) about their office bearers, control structures, management and operations.

The State Security Agency (SSA) has proposed legislation requiring security clearance for anyone wanting to “establish and operate” a non-government or faith-based organisation (NGOs and FBOs).

This potentially gives the SSA the power to force people to resign from an organisation, or even to shut down that organisation. Authorities say it’s a necessary step because South Africa was greylisted after failing to meet international standards set to curb terrorism financing (a crime which NGOs and churches can potentially facilitate).

But the move is questionable: For one, legislative reforms aimed at removing SA from the greylist have already been made, with both the Hawks and the Financial Intelligence Centre gaining greater powers to investigate NGOs and FBOs. And then there’s the SSA’s reported history of sabotaging civil society.

Widespread backlash from civil society has erupted against the security clearance provision contained in the General Intelligence Laws Amendment Bill of 2023 (Gilab), submitted to Parliament in August. Gilab was meant to address malfeasance at the SSA, including political factionalism, irregular expenditures and poor oversight; these problems were identified during the Zondo Commission of Inquiry into State Capture, which also heard testimony of the SSA actively monitoring and sabotaging civil society organisations deemed “hostile” to the regime.

Security clearance is granted or denied after the SSA conducts a vetting investigation (in terms of the National Strategic Intelligence Act). Vetting is a risk assessment normally reserved for government employees or contractors with access to sensitive government information.

The process gives the SSA access to any personal information they deem relevant (such as health and banking records), and can include the interception of private communications.

However, the Minister in the Presidency responsible for the SSA, Khumbudzo Ntshavheni, recently assured civil society that only those posing a threat to “national security interests” would be vetted. She maintained that such vetting was necessitated by South Africa’s placement on a “greylist” of countries making insufficient efforts to curb terrorism financing.

Questionable statements

According to EWN, which first reported the minister’s statements, Ntshavheni said Gilab was in line with laws of democratic countries like the United States (US) and the United Kingdom (UK).

The minister’s statements, especially on the use of security vetting in response to the greylisting, are particularly questionable.

Ntshavheni’s claims relate to an evaluation report from the international Financial Action Task Force (FATF), a watchdog body that sets international standards for in-country legislation to curb terrorism financing. In October 2021, the FATF published a report following its investigation of South Africa’s measures to stymie terrorism financing. A key finding included the country’s weakened institutional capacity to address such financing following State Capture.

The 2021 FATF report was produced in cooperation with South Africa, and contained details of the country’s performance measured against 40 standard FATF recommendations (to which all countries strive to adhere). The report put forth 67 recommended actions specific to SA to remedy shortcomings.

The country had a year to implement the plan, but failed and was greylisted in February this year. (Greylisting is an unofficial reference to a collection of countries that the FATF has placed under “increased monitoring”, and which are working with the FATF to better meet its standards.)

Of the 40 recommendations, number eight deals specifically with strengthening laws that counter the abuse of non-profit organisations (including churches) to facilitate terrorism financing. The 2021 FATF report concluded that recommendation eight had not been satisfied, since South Africa had “not yet done an assessment of their broader NPO sector to identify those organisations, based on their characteristics or activities, that put them at risk of Terrorist Financing abuse” and had “no capacity to monitor or investigate” such NPOs once identified.

To explicitly address these issues, South Africa enacted two successive laws last year: The General Laws (Anti-money laundering and combating terrorism financing) Amendment Act 22 of 2022, and the Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act 23 of 2022.

Taken together, the acts (22 and 23) have strengthened the Hawks’ and the Financial Intelligence Centre’s (FIC) powers to investigate persons and organisations suspected of involvement in terrorism financing.

In particular, Act 22 amends the 1997 Non-profit Act; organisations donating to entities outside South Africa and who provide “humanitarian, charitable, religious, educational or cultural services outside of the Republic’s borders” must register with the Directorate of Non-profit Organisations within the Department of Social Development (DSD).

Registered non-profits (including churches) must now annually submit additional information (the exact nature of which will be determined in consultation with the FIC and the minister of finance) about their office bearers, control structures, management, and operations to the DSD.

Additionally, Act 22 introduces several criteria for the disqualification of NPO office bearers. Some of these include being an unrehabilitated insolvent and committing various offences governed by a slew of financial laws. Theft, fraud, forgery and perjury can all prohibit one from taking up a position on an organisation’s board.

Currently, South Africa still has to address eight “strategic deficiencies” to get off the greylist. For instance, the country needs to demonstrate a “sustained increase in law enforcement agencies’ requests for financial intelligence from the FIC” during investigations into terrorism financing. The country must also improve risk-based supervision of Designated Non-Financial Businesses and Professions (such as doctors, lawyers, casinos, and insurance brokers.) Non-profits are not mentioned.

Acts 22 and 23 alone do not preclude the SSA’s involvement in terrorism financing investigations into NGOs and FBOs; it falls squarely within the agency’s mandate. It is, however, unusual to apply vetting during such investigations, and subsequent claims that Gilab’s vetting provisions are in line with similar laws in the US and UK are false.

In the US, vetting applies to prospective federal employees or contractors to the federal government who will, as part of their government job, have access to sensitive government information or locations. The same practice applies in the UK.

Vetting is essentially a risk assessment: can an employee be trusted to manage sensitive material, or are they likely to be blackmailed, bribed, or to forget a briefcase with top-secret blueprints on the bus? Until now, in SA, vetting has served this same purpose; the process has never been used, as Gilab proposes, to sniff out potential terrorists.

Pre-emptive criminal investigation

Through Gilab, however, it seems the SSA wants to repurpose vetting into a type of pre-emptive criminal investigation. Normally, if an organisation or person is suspected of involvement in terrorism financing, state law enforcement would investigate it as a crime, with the administration that goes with that – a case number, court orders, evidence preservation, and so forth.

On the other hand, the vetting proposed in Gilab would be a response to a potential threat to national security (as identified and defined by the SSA). However, the agency has the power to classify all information related to its operations – including the reasons for a vetting investigation and information about the procedures and outcomes related to such an investigation.

This creates the potential for the SSA to operate outside the constraints of the judicial system by removing, for the vetting subject, all statutory protections that a legal criminal investigation affords a person accused or suspected of criminal involvement. As Gilab stands now, an employee or board member at an NGO of FBO could potentially be forced to resign as a result of the classified details of a vetting investigation.

The basis for such a vetting investigation is also unclear, creating additional room for abuse.

While Act 22 makes explicit who is unfit to serve on a non-profit’s board, factors that constitute a threat to “national security interests” are ill-defined in Gilab. Writes constitutional expert Pierre de Vos: “If passed, it [Gilab] will vastly expand the categories of people subject to security clearance, and will grant additional discretionary powers to the minister, often in vague and general terms.”

New legislation to curb terror financing has already kicked in, tightening controls on non-profits and churches. If Gilab becomes law, state security forces could effectively launch extra-legal investigations and shut down organisations based on vague conceptions of national security. DM

Heidi Swart is a senior investigative journalist specialising in intelligence and security matters. She is currently the research and journalism coordinator for Intelwatch, a non-profit organisation based in South Africa and dedicated to strengthening public oversight of state and private intelligence actors in Africa and around the world.

Gallery

Comments - Please in order to comment.

  • Rod H MacLeod says:

    The SSA is becoming BOSS II.

  • Notinmyname Fang says:

    Shameful
    Scared of NGOSs? Call them terrorists
    Sounds familiar…

  • Michele Rivarola says:

    Enough said, see you in court Maam

  • Middle aged Mike says:

    Communist harder comrades!

  • Mark Gory Gory says:

    Religious industry needs some kind of regulation. Too much harm (and huge profits) generated in the name of god

    • Middle aged Mike says:

      I agree that they need regulation and taxation but not this. This is quite clearly aimed at limiting push back against the ANC ineptocrats by the misuse of the SSA.

  • Bean Moodly says:

    The government has been targeting the church for some time. Either through CRL trying to exclusively regulate the church (not other religions), or creating new laws to tax the church (whilst the same is not being said about taxing other religions, I would believe mosques receive monies from their members, sangomas collects moneies from the client etc). The fact is that the church belongs to God and the battle for ages of trying to capture the church has not prevailed because the church is still standing.

    • Middle aged Mike says:

      A lot of places of worship are quite clearly organised around extracting money from their followers for the purpose of enriching their leaders. It infuriates me that any of them are exempt from the taxes paid by other businesses.

      • Bean Moodly says:

        That shouldn’t be the problem because law enforcement agencies should deal with that. There are sufficient laws in place to deal with that. If you know of any place of worship ‘extracting money’ from their followers for the purpose of enriching their leaders, why won’t you report to the nearest police station? People are making noise about people being extorted by ‘church’ leaders but no one dares open a case or produces any evidence of such. Church hate or hate for pastors is on the rise. People make all sort of ‘financial’ allegations against the church or pastors but are not willing to come forward with evidence or open cases as ‘responsible’ citizens.

        • Middle aged Mike says:

          You spectacularly missed my point and the fact that I referred to places of worship and not churches. I’d like to see them, regardless of which particular religion they sell, to be subject to the same tax regime as any other business because that’s what a lot of them are. What is this ‘police station’ thing of which you speak other than a place that supplies firearms to criminals?

      • Bick Nee says:

        Money paid to churches (and other religious institutions and places of worship) which comes in the form of tithes, gifts and donations, has already been taxed in the hands of those making those contributions. You’re calling for a form of double taxation by wanting it to be taxed again. As for “leaders” being “enriched”, they pay tax on their income, just like you do.

        Given that much of the tax revenue of this country goes to fattening the wallets of a corrupt and incompetent government, you should rather be calling for a tax revolt, not for more tax to be extracted.

        • Ben Harper says:

          That’s how every business in the country works, the money you spend at Checkers has been taxed already and then Checkers pays taxed based on revenue/profits or are you saying that businesses shouldn’t be taxed?

          • Bick Nee says:

            Well…that’s the difference between an NPO such as a church and Checkers. The one exists to make a profit and pays tax. The other does not exist to make a profit – it operates outside of commercial interests and practices – it is not a business.

  • Ann Bown says:

    The NPO Working Group (NPO-WG) has been working voluntarily on several matters important to the sector since November 2021, including unintended consequences made by governments around the world through the misapplication of FATF recommendations. Often this is a ruse to control civil society activities and financial flows! The FATF Recommendation 8, as stated above, focuses on the non-profit organisation sector, and the potential use of the NPOs as vehicles for Money Laundering (ML) and Terrorism Financing (TF). Part of the Mutual Evaluation Report is for the sector to carry out a Risk-Based Assessment for both registered and unregistered NPOs. This process is currently underway in South Africa with the assistance of non-profit organisations, the FIC and banks. So the big question here is why hasn’t the SSA taken this move into account before drafting GILAB?
    The Global NPO Coalition on FATF, in partnership with 40 countries including the NPO Working Group, has proposed amendments and necessary changes to Recommendation 8 for consideration during the FATF plenary in Paris on 23 October 2023. These revisions seek to address the problem of over-application of R8 made by governments and the financial sectors. FATF has agreed to work alongside civil society after recognising the negative impact this can have on legitimate activities. A revolutionary change is anticipated so watch this space. In the meantime the NPO-WG will be endorsing Intelwatch and preparing for the public participation phase of GILAB!

  • Hilary Morris says:

    It seems that, in addition to general incompetence, we are now in some danger of being vetted by an agency that may well be a greater threat to democracy than any common or garden NGO or FBO. Ms Ntshavheni is someone to be watched – preferably from a distance.

  • I agree too many of these so called churches deal in cash and the “pastors” drive luxury cars while taking from the poor. NGO’s too – board members earn R3 million plus to attend meetings.

  • Samuel Ginsberg says:

    “Theft, fraud, forgery and perjury can all prohibit one from taking up a position on an organisation’s board.”
    But none of those seem to prevent one from being in government, even in the cabinet.

  • Miss Jellybean says:

    The 2021 FATF report concluded that recommendation eight had not been satisfied, since South Africa had “not yet done an assessment of their broader NPO sector to identify those organisations, based on their characteristics or activities, that put them at risk of Terrorist Financing abuse” – considering that the main reason for FATF (ie: The USA) doesn’t have similar laws this seems like an overreach

    • Heidi Swart says:

      Hi Mandy B, Thank you for this comment. Please can you do me a HUGE favour and contact me urgently on [email protected] Recommendation 8 is and important aspect of the article and, if there is an omission in the piece, it obviously needs to be corrected as soon as possible; accuracy and detail is of utmost importance here. Thanks in advance. Best, Heidi.

  • Pieter van de Venter says:

    Anything spoken by this minister, is suspect.

  • Bob Kuhn says:

    ….but supporting Hamas is OK?….hypocrites.

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