’Difficult to imagine’ currency act is unconstitutional
While there are a number of potential constitutional concerns over provisions in section nine of the Currency and Exchanges Act‚ it is difficult to imagine that it is unconstitutional in its entirety.
By Ernest Mabuza
While there are a number of potential constitutional concerns over provisions in section nine of the Currency and Exchanges Act of 1933‚ it is difficult to imagine that it is unconstitutional in its entirety‚ according to Webber Wentzel associate Benjamin Cronin.
Mr Cronin‚ who was commenting on entrepreneur Mark Shuttleworth’s legal challenge to the Currency and Exchange Act‚ added: "The presence‚ however‚ of clearly problematic provisions such as the discretion to potentially retrospectively criminalise conduct or overturn legislation through presidential regulation should hopefully trigger a new legislative process through Parliament to redraft the empowering law. This would likely be beneficial to all stakeholders‚ including the South African Reserve Bank."
Mr Shuttleworth has launched a bold challenge against the section of the Currency and Exchange Act of 1933‚ arguing that it was unconstitutional in that it gave the president unfettered legislative powers.
He wants the North Gauteng High Court to set aside a levy of more than R250m he had to pay to get some of his assets out of the country in 2009‚ and order the Bank to return the money. Mr Shuttleworth had assets worth more than R4.27bn in South Africa when he emigrated‚ but transferred them out of South Africa in 2008 and 2009‚ each time paying a 10% levy. His concern about the regulation was that the power to enforce the levy on money leaving the country was not conferred by legislation.
Mr Shuttleworth’s advocate‚ Gilbert Marcus SC‚ argued on Monday that the system of exchange control in South Africa was governed not by laws‚ but by the dictates of an organ of state which were not accessible to the public. They did not follow any constitutionally required process of promulgation and violated numerous constitutional rights‚ he said.
Jeremy Gauntlett SC‚ for the Bank‚ argued that the order sought by Mr Shuttleworth was "the most radical court order imaginable".
"If the applicant succeeds in striking down section nine of the currency act and declaring all orders and rules unconstitutional‚ there would be no inhibition on removing capital from this country at all."
Mr Gauntlett said Mr Shuttleworth claimed it was in the interest of all South Africans to destroy the entire exchange control system.
"He couldn’t get his money out of the country. Now he wants to pull the whole system down. Why should this financial refugee‚ living on the Isle of Man‚ speak on behalf of the entirety of South African society?" he asked.