South Africa’s two dilemmas: FATF and ICC

Cape Town - The South African state is currently embroiled in two dilemmas, both of which involve its interaction with two separate international legal statutes or conventions, of which it is a member and signatory.

Whether it is a coincidence or not, the tale of the two dilemmas involves Russia, either indirectly or directly.

What is poignant is the differing response of the Ramaphosa government to the two dilemmas – one very compliant to the demands of the one convention for the sake of saving the economy by rooting out the laundering of money from the proceeds of corruption and crime; and the second defiant to the point of threatening to leave the other convention tasked “to bring those who commit genocide, crimes against humanity, and war crimes to justice” – in this case potentially damaging to the country’s international reputation and its commitment and loyalty to membership of international organisations.

The two dilemmas of course relate to Pretoria’s membership of the Paris -based Financial Action Task Force (FATF), the intergovernmental organisation mandated by the G7 to develop policies to combat money laundering and terrorism financing, and of the International Criminal Court (ICC) under whose Rome Statute South Africa is committed to bring those who commit genocide, crimes against humanity, and war crimes to justice.

In February, the FATF classified South Africa as a “jurisdiction under increased monitoring”.

In other words, it put the country on its “Grey List” for failing to fully comply with some 67 recommended actions, or to remedy deficiencies designed to strengthen South Africa’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/ CFT) measures as agreed with the FATF.

Pretoria has until January 31, 2025, to address the eight areas of strategic deficiencies identified by the FATF.

Finance Minister Enoch Godongwana had been bending over backwards to avoid the grey listing. Last December he fast-tracked amendments to the key catch-all laws – the General Laws Amendment Act of 2022 and the Protection of Constitutional Democracy Against Terrorist and Related Activities Amendment Act – aimed at closing some of the loopholes in South Africa’s AML/CFT architecture.

In his 2023 National Budget in February, he even committed some R14 billion over the medium term and R1.7bn for this year to fight crime and corruption, of which a huge chunk is earmarked for the National Prosecuting Authority precisely “to support the implementation of the recommendations of the Zondo Commission and FATF”.

Godongwana recognises “the need to be more effective in implementing our laws, particularly in fighting organised and sophisticated crimes.

Addressing the FATF issues is part of the broader fight against corruption, crime, state capture and the deliberate weakening of the institutions of law and order in our country.”

By being greylisted, South Africa is committed to “actively working with the FATF to address the strategic deficiencies in its regimes to counter money laundering, terrorist financing, and proliferation financing.

“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed time frames.”

Coinciding with South Africa’s grey listing is the suspension of Russia from the FATF in February – the first time in the organisation’s 34-year history that it has taken such unprecedented action, “a step warranted by Russia’s unlawful, immoral, and unprovoked war against Ukraine”.

The FATF, in a stark message at its Paris plenary in February, warned “all member jurisdictions (including South Africa) to remain vigilant of threats to the integrity, safety and security of the international financial system arising from the Russian Federation’s war against Ukraine.

The FATF reiterates that all jurisdictions should be alert to possible emerging risks from the circumvention of measures taken in order to protect the international financial system and take the necessary measures to mitigate these risks”.

The assumption is that the Treasury, FSCA (Financial Sector Conduct Authority) and South African Reserve Bank are actively monitoring for any potential or actual breach by South Africans of the sanctions regime in place against Russian entities and individuals.

In contrast, South Africa, which is hosting the BRICS Head of Governments Summit in August this year, is caught in a foreign policy and diplomatic dilemma which seems to be taking a defiant yet unknown course of its own. The ICC on March 17 issued a warrant of arrest against Russian President Vladimir Putin for war crimes and the unlawful deportation of children from Ukraine to Russia.

An invitation for Putin to attend the summit has already gone out. If he attends the summit, then South Africa, by its accession to the ICC Treaty (called the Rome Statute) and under the preamble of the Rome Statute of the International Criminal Court Act 27 of 2002, is obliged to arrest him and hand him over to the court.

The ICC Act criminalises the crimes of genocide, crimes against humanity, and war crimes under South African law.

ICC membership is enshrined in the South African Constitution and an incumbent government cannot repeal South Africa’s accession to the ICC with a simple parliamentary majority.

There is a sense of déjà vu. In 2016 Pretoria similarly threatened to quit the ICC over a similar series of warrants issued in 2009 and 2010 against then Sudanese strongman General Omar al-Bashir for crimes against humanity.

The Sudanese leader was attending an AU Summit in South Africa amid calls for his arrest.

The handling of South Africa’s quitting or continuing membership of the ICC has been shambolic.

After declaring that Pretoria was retreating from the ICC, President Ramaphosa was forced to retract almost immediately with another U-turn, only to issue a clarification that South Africa remained a signatory to the Rome Statute and would continue to campaign for equal and consistent application of international law.

Incredibly, “this clarification follows an error in a comment made during a media briefing held by the governing ANC on South Africa’s status with regard to the ICC.

“Regrettably, the president erroneously affirmed a similar position during a media session today. South Africa remains a signatory to the ICC in line with a resolution of the 55th National Conference of the ANC – held in December 2022 – to rescind an earlier decision to withdraw from the ICC,” declared Ramaphosa.

South Africa is also working to “invigorate the Malabo protocol that would establish a continental criminal court that would complement the ICC as a court of last resort”. Furthermore, Pretoria, according to the president, is “considering a legislative amendment that would domesticate the Rome Statute so that it reflects all the articles of the Rome Statute.

“This includes provision of Article 98 of the statute that requires a waiver of immunities for persons charged by the ICC from third-party countries where there is no referral by the UN Security Council.

“The manner in which the UK domesticated the Rome Statute to incorporate the provisions of Article 98 has been recommended as a guideline case study.”

The ICC is a controversial institution. It has come under severe and justified criticism for bias, especially in refusing to issue similar warrants against George Bush, Tony Blair, Dick Cheney and others for the illegal invasion of Iraq; US complicity in the murder of President Salvatore Allende of Chile and several other cases.

It remains to be seen how President Ramaphosa handles the Putin dichotomy. He has dispatched several envoys to various capitals to explain Pretoria’s stance on the ICC and the Russian leader.

The above measures to domesticate the Rome Statute and the provision of Article 98 which would grant Putin immunity where there is no referral from the UN Security Council, as intriguing as it sounds, may yet prove to be a summit too early!

Parker is an economist based in London.

Cape Times