The short answer
Yes, the court ruled that the ZEP was to be deemed still valid until June 2024.
The whole question
Dear Athalie
I need help accessing the funds in my Nedbank investment account to support my children. My bank has denied me access because I need to be FICA compliant, but I am unable to meet the FICA requirements because the Zimbabwean Exemption Permit (ZEP) expired, even though the grace period has been extended.
The long answer
Many Zimbabweans have experienced the same thing. But the court challenge that was brought by the Helen Suzman Foundation and the Consortium for Refugees and Migrants in South Africa in June 2023 against Home Affairs (DHA) about the expiry of the ZEP, was successful: the High Court said that terminating the ZEP was unlawful, unconstitutional and invalid, and the Minister was instructed to reconsider the whole issue and follow “a fair process” that was in line with the relevant laws. The court also ruled that the DHA has been interdicted from arresting, detaining or deporting any ZEP holder for any reason relating to them not having a valid ZEP in their passport.
Although the Minister has said he will appeal the ruling, the ruling remains in force unless it is successfully appealed by a higher court. The court ruled that the ZEP was to be deemed still valid until June 2024. Practically what that means is that as the ZEP has not expired, you are still lawfully living in South Africa and there should be no reason why you cannot be FICA compliant and have access to the money in your investment account.
One of the reasons you may have had such difficulty with Nedbank is that in 2022 Nedbank was fined R35-million (of which R15-million was conditionally suspended) by the Prudential Authority for several instances of non-compliance with FICA after a 2019 check. An article by the financial service provider Moonstone indicates that these instances included failing to risk-rate their clients, applying due diligence controls, updating record-keeping, and failing their obligation to report financial transactions. Nedbank was given a reprimand, a caution, and an order to take remedial action, as well as a fine.
The insistence on stricter FICA controls is also because South Africa was “greylisted” by the International Financial Action Task Force (FATF) in February 2023. As you know, FICA is intended to combat money laundering and the financing of terrorism, and South Africa has been sanctioned (greylisted) for failing to do this effectively.
If you still find difficulty with Nedbank and FICA and accessing your account following the High Court case, you could lay a complaint with the Ombudsman for Banking Services, an office that exists to see that clients are properly treated by the banks. These are their contact details:
Tel: 0860 800 900
Email: info@obssa.co.za
You could also contact one of the following organisations for help and advice:
Email: info@lhr.org.za
Musina 015 534 2203
Durban: 031 301 0531
Pretoria: 012 320 2943
Johannesburg: 011 339 1960
Cape Town: 021 424 8561
Email: info@lrc.org.za
Johannesburg: 011 836 9831
Cape Town: 021 481 3000
In summary: Since the recent court victory declaring the scrapping of the ZEP unlawful, the ZEP is still valid until June 2024 and there should be no reason why you cannot be FICA compliant and have access to the money in your investment account. In 2022 Nedbank got in trouble for non-compliance with FICA, so it may be a good idea to get legal help.
Wishing you the best,
Athalie
Answered on July 9, 2023, 11:19 p.m.
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Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.