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South Africa: Financial Intelligence Centre Act Amended

(May 25, 2017) On April 29, 2017, South African President Jacob Zuma signed into law the Financial Intelligence Centre Amendment Act, 2017, amending the Financial Intelligence Centre Act of 2001, an Act designed to “combat money laundering and the financing of terrorism.”  (Press Release, President Jacob Zuma Signs FICA Bill into Law, South African Government website (Apr. 29, 2017).)  The amending legislation will be implemented once the Minister of Finance gazettes a notice to that effect.  (Financial Intelligence Centre Amendment Act 1 of 2017 (FICA 2017), § 61, GOVERNMENT GAZETTE (May 2, 2017), South African Government website.)

Expansion of Objectives

The legislation expands the objectives of the Financial Intelligence Centre.  The principal objectives of the Centre, which under the 2001 Act were limited to assisting “in the identification of the proceeds of unlawful activities and the combating of money laundering activities and the financing of terrorist and related activities”, will now include “implementation of financial sanctions pursuant to resolutions adopted by the Security Council of the United Nations, under Chapter VII of the Charter of the United Nations.”  (Id. § 2; Financial Intelligence Centre Act 38 of 2001 (FICA), § 3 (Dec. 3, 2001), University of Pretoria website; U.N. Charter (Oct. 24, 1945), United Nations website.)

In addition, the Amendment Act expands the list of institutions to which the Centre will make information it collects available.  Under the 2001 FICA, one of the objectives of the Centre was to make such information available to “investigating authorities, supervisory bodies, the intelligence services and the South African Revenue Services.”  (FICA § 3.)  The legislation expands the list to cover the Independent Police Investigative Directorate, the Intelligence Division of the National Defence Force, a Special Investigating Unit, the office of the Public Protector, and an investigative division in an organ of state.  (FICA 2017, § 2.)    

Rules on Customer Identification and Due Diligence

In addition to those prescribed under the 2001 FICA, the amending legislation imposes rules on customer identification and due diligence.  It bans accountable institutions from establishing “a business relationship or conclud[ing] a single transaction with an anonymous client or a client with an apparent false or fictitious name.”  (FICA 2017, § 8.)  It requires every accountable institution to “develop, document, maintain and implement” a Risk Management and Compliance Programme (RMCP), “a program for anti-money laundering and counter-terrorism financing risk management and compliance.”  (Id. § 27.)  It states that a RMCP, among other duties, must:

(a) enable the accountable institution to—

(i) identify;

(ii) assess;

(iii) monitor;

(iv) mitigate; and

(v) manage,

the risk that the provision by the accountable institution of products or services may involve or facilitate money laundering activities or the financing of terrorist and related activities;

(b) provide for the manner in which the institution determines if a person is—

(i) a prospective client in the process of establishing a business relationship or entering into a single transaction with the institution; or

(ii) a client who has established a business relationship or entered into a single transaction;

(c) provide for the manner in which the institution complies with [the rule banning the creation of a relationship with a unanimous client or a client with an apparent false name.] (Id.) 

The Amendment Act imposes additional due diligence requirements on certain customers.  For instance, if the transaction or business relationship involves a juridical person, in addition to the due diligence requirements described above, the accountable institution, among other measures, must establish the nature of the client’s business, the ownership and control structure of the client, and the identity of the beneficial owner.  (Id. § 10.)  If the client is a foreign prominent public official (including head of state, member of a royal family, government minister, or high-ranking member of the military), or a domestic prominent public official, the accountable institution must, among other steps, “take reasonable measures to establish the source of wealth and source of funds of the client … and … conduct enhanced ongoing monitoring of the business relationship.”  (Id. Schedule 3B.)  The same scrutiny must be applied to family members or close associates of such prominent public officials (these include current or previous spouses, civil partners, or life partners; children, step-children, and their spouses or partners; parents; and close relatives by consanguinity or affinity.)  (Id.)

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Germany: Purchase of Lethal Dose of Narcotics for Painless Suicide Not Deniable in “Extremely Exceptional Situations”

(May 24, 2017) On March 2, 2017, Germany’s Federal Administrative Court (Bundesverwaltungsgericht (BVerwG)) held that the constitutionally guaranteed general right to protection of personality includes the right of seriously and terminally ill patients to decide how and when to end their lives, provided that the patients are able to form the decision of their own free will and to act on it. In “extremely exceptional situations,” this right might obligate the state to grant authorization to the patient for the purchase of narcotics that allow for a “painless and dignified” suicide.  The decision was published on May 17, 2017.  (Bundesverwaltungsgericht [BVerwG] [Federal Administrative Court], Mar. 2, 2017, docket no. 3 C 19.15, BVerwG website (in German); Basic Law for the Federal Republic of Germany (May 23, 1949), BGBl. I at 1, as amended, art. 2, ¶ 1 in conjunction with art. 1, ¶ 1, GERMAN LAWS ONLINE (unofficial English translation).)

Facts of the Case

In his current suit, the plaintiff asks the Federal Administrative Court to declare that the Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte (BfArM)) was obligated to grant his wife, who is now deceased, authorization to acquire a lethal dose of sodium pentobarbital allowing her to end her life. (BVerwG, supra, at 1.)  In 2002, the wife was in an accident that left her paralyzed from the neck down; she received artificial respiration and needed around-the-clock medical care and treatment.  In addition, frequent spasms caused her severe pain.  (Id. at 2.)  According to the doctors, there was no chance of recovery or improvement of her condition.  The wife felt that such a life was undignified and unbearable and therefore wished to end it.  She had discussed her wish to die with the plaintiff, their daughter, her doctors, a psychologist, her caretakers, and a priest. (Id.)

In November 2004, she applied to the Federal Institute for Drugs and Medical Devices to grant authorization for her to acquire 15 grams of sodium pentobarbital, by means of which she would be able to end her life. She stated that purchasing the drug was the only way for her to kill herself without pain and risk.  Travelling to Switzerland, where it was legal to use the drug for an assisted suicide, was not an option for her in her condition.  (Id.)  The Federal Institute for Drugs and Medical Devices denied her application in December 2004 and also rejected her administrative appeal against the refusal.  It stated that her wish to use the drug for a suicide was in contravention of the purpose of the German Narcotic Drugs Act.  In February 2005, the plaintiff and his wife travelled to Switzerland, where the wife committed suicide with the help of an organization for assisted dying.  (Id. at 3.)

Legal Proceedings

The 2006 action originally filed by the plaintiff at the local administrative court was denied as inadmissible, because the court held he had no standing. The appeals court upheld that decision. The Federal Constitutional Court declined to accept the case for review.  (Id. at 4.)  On July 19, 2012, the European Court of Human Rights held that the German courts’ refusal to examine the merits of the plaintiff’s motion violated his own right to respect for private life under article 8 of the European Convention on Human Rights (ECHR), but that his complaint about a violation of his wife’s rights was inadmissible.  (Id. at 5; Koch v. Germany, July 19, 2012, application no. 497/09, HUDOC; Convention for the Protection of Human Rights and Fundamental Freedoms (Nov. 4, 1950), 213 U.N.T.S. 221, European Court of Human Rights website.)

The plaintiff’s reinstated action at the German administrative court was dismissed as unfounded. (BVerwG, supra, at 6.)  His appeal was also dismissed.  (Id. at 7.)  His further appeal to the BVerwG was partially granted. (Id. at 10.)

Decision

The BVerwG held that the refusal of the Federal Institute for Drugs and Medical Devices to grant authorization to the plaintiff’s late wife had been unlawful, because it did not examine whether there was an exception to the general prohibition to acquire narcotics to commit suicide. (Id. at 14 & 17.)

The Court reiterated that the constitutionally guaranteed general right to protection of personality grants every individual an autonomous sphere of private life in which he or she can develop and maintain his or her individuality. That includes the right of every human being to self-determination and to decide his or her own destiny.  A manifestation of that autonomy is making medical decisions.  (Id. at 23.)

The Court stated that in light of the constitutionally guaranteed general right to protection of personality, an exception to the general prohibition on acquisition of narcotics to commit suicide has to be made in extremely exceptional situations for seriously and terminally ill patients. It further requires that the patient make a free and informed decision to end his or her life because the situation feels unbearable to the patient and that there is no reasonable alternative such as palliative medical care.  (Id. at 31.)  In such cases, in the Court’s view, a patient may not be denied authorization to acquire a drug that allows a dignified and painless suicide.  (Id. at 32.)

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European Union: Exclusive Competence over Marrakesh Treaty Confirmed

(May 23, 2017) On February 14, 2017, the Court of Justice of the European Union (CJEU), in line with a CJEU Advocate General’s opinion, ruled that the EU enjoys exclusive competence in defining copyright rules concerning materials intended for use by people with disabilities. The Court stated that the Treaty falls, to a large extent, within an area covered by common EU rules.  (CJEU, Opinion 3/15 of the Court, ¶ 129 (Feb. 14, 2017), CURIA; CJEU, Opinion Procedure 3/15, Opinion of Advocate General Wahl (Sept. 8, 2016), CURIA.)

This matter is covered by the Marrakesh Treaty (MVT) of 2013, which was signed by the EU in 2014 and entered into force in September 2016.  (Summary of the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled (MVT) (2013), World Intellectual Property Organization (WIPO) website; MVT, WIPO (June 27, 2013).) To date, more than 80 countries have signed the MVT and 27 have ratified it. (WIPO Administered Treaties: Marrakesh VIP Treaty, WIPO website (last visited May 19, 2017).)

To implement the MVT, the European Commission (the EU executive body) has put forward two legislative proposals:

The CJEU Ruling

The case upon which the Grand Chamber of the CJEU based its Opinion arose from the 2001 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society, which allowed Member States to introduce optional exceptions and limitations to the rights of reproduction and communication for the benefit of persons with disabilities. (Directive 2001/29/EC, art. 5(3)(b), EUR-LEX.)

As part of the body of law administered by the World Intellectual Property Organization, the MVT requires the contracting parties to facilitate access to published works for persons who are blind, visually impaired, or otherwise print disabled and to introduce in their national legislation provisions that would allow certain entities such as non-profit organizations or government institutions to reproduce or distribute a wider choice of books published in adapted formats, such as braille or large lettering, or in audio digital recordings. The Treaty also provides for cross-border exchange of books in adapted formats.  (MVT, art. 5 on Cross-Border Exchange of Accessible Format Copies and art. 9 on Cooperation to Facilitate Cross-Border Exchange.)

The MVT was presented for ratification by the European Commission, but the ratification faced delays because of a blocking minority of Member States in the Council who questioned the timing of the ratification and the very EU competence to ratify it (i.e., whether it was an exclusive competence of the EU or shared competences of the EU and the Member States).  They argued that the MVT falls within the area of shared competences and therefore must be concluded not only by the Union but by all Member States.  (EU Council Decision 8305/14 ADD1, P1 39, Apr. 9, 2014, EUROPA.)

The European Commission asked the CJEU to provide its opinion on whether the EU itself (without the participation of the Member States) could conclude the Marrakesh Treaty.  Eight Member States – Finland, France, Hungary, Italy, Lithuania, the Czech Republic, Romania, and the United Kingdom – took part in the opinion procedure claiming that the EU does not have exclusive competence to conclude the MVT. (CJEU, Opinion 3/15 supra, ¶¶ 40 & 50.)

The CJEU ruled in favor of the European Commission and asserted that the conclusion of the Marrakesh Treaty does fall within the exclusive competence of the European Union. (Id. ¶ 60.)

Prepared by Micaela Del Monte, Law Library Visiting Research Fellow, in collaboration with Peter Roudik, Director of Legal Research.

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New Zealand: Ratification of Trans-Pacific Partnership Agreement Completed

(May 23, 2017) On May 11, 2017, the New Zealand government completed the formal process for ratifying the Trans-Pacific Partnership (TPP) Agreement, becoming the second signatory country, after Japan, to do so. (Press Release, Todd McClay, McClay Says TPP Ratification Keeps Options Open, BEEHIVE.GOVT.NZ (May 11, 2017).) The notification of the completion of New Zealand’s applicable legal procedures for the entry into force of the TPP Agreement followed the passage of legislation in November 2016 to ensure that domestic legislation complies with the country’s obligations under the Agreement. (Kelly Buchanan, New Zealand: Trans-Pacific Partnership Bill Passed, GLOBAL LEGAL MONITOR (Nov. 22, 2016).)

Japan’s ratification process was completed on January 20, 2017. (Press Release, Ministry of Foreign Affairs of Japan, Notification of Completion of Domestic Procedures for the Trans-Pacific Partnership (TPP) Agreement (Jan. 20, 2017).) At that time, the Japanese government stated that it “intends to continue to tenaciously encourage other original signatories to promptly complete their domestic procedures toward the entry into force of the TPP Agreement, in light of the significance of the TPP.” (Id.)

In announcing New Zealand’s ratification, Trade Minister Todd McClay stated that the “Cabinet’s decision sends a clear message that we see value in a common set of high-quality rules across the Asia-Pacific and we are keeping all of our options open.” (McClay Says TPP Ratification Keeps Options Open, supra.) The move came ahead of the Asia-Pacific Economic Cooperation (APEC) Meeting of Ministers Responsible for Trade, which took place in Vietnam from May 19-21, 2017.  McClay was the co-chair of a separate meeting of TPP country ministers that was held during that meeting. (Id.) After the meeting, the ministers of the eleven remaining TPP signatory countries issued a joint statement in which they “agreed on the value of realising the TPP’s benefits and to that end, they agreed to launch a process to assess options to bring the comprehensive, high quality Agreement into force expeditiously, including how to facilitate membership for the original signatories.” (Press Release, Todd McClay, Trans-Pacific Partnership (TPP) Agreement Ministerial Statement, BEEHIVE.GOVT.NZ (May 21, 2017).)

The discussions during the APEC meeting followed the January 30, 2017, notification by the United States, the twelfth signatory to the TPP Agreement, stating its intention not to become a party to the agreement.  (Trans-Pacific Partnership Agreement (TPP), New Zealand Foreign Affairs and Trade website (last visited May 22, 2017); Press Release, Office of the United States Trade Representative, The United States Officially Withdraws from the Trans-Pacific Partnership (Jan. 30, 2017).)

In order to enter into force, the TPP Agreement must be ratified by at least six signatory countries that collectively account for at least 85% of the combined gross domestic product (GDP) of the original signatories.  (TPP Agreement, art. 30.5(3), New Zealand Foreign Affairs and Trade website.)   This means that the Agreement cannot come into force in its current form without the ratification of the United States, which accounts for 60% of the GDP of the original signatories.  (Kristen Gelineau, Push to Save Pacific Rim Trade Deal After US Exits TPP Pact, AP NEWS (Jan. 24, 2017).)

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Kenya: Movable Property Security Rights Act Enacted

(May 18, 2017) On May 10, 2017, Kenyan President Uhuru Kenyatta signed into law the Movable Security Rights Bill 2017, legislation aimed at facilitating the use of movable property as collateral for securing a credit line.  (President Kenyatta Signs Movable Property Security Rights Bill into Law, OFFICIAL WEBSITE OF THE PRESIDENT (May 10, 2017).)  It does this mainly by establishing the Office of Registrar of security rights and by providing for the registration of security rights in movable property.  (Id.)  The Act will be implemented once the Cabinet secretary responsible for the registration of security rights issues a notice in the Kenyan Gazette to that effect.  (Movable Property Security Rights Act, 2017, § 1 (May 10, 2017), IKM Advocates website.)

Security Rights and Borrowing

Under the Act, a “security right” is:

(a) a property right in a movable asset that is created by an agreement to secure payment or other performance of an obligation, regardless of whether the parties have denominated it as a security right, and regardless of the type of asset, the status of the grantor or secured creditor, or the nature of the secured obligation; and

(b) the right of the transferee in an outright transfer of a receivable; … .  (Id. § 2.)

The Act makes it easier for persons who do not own real property to secure a credit line by facilitating borrowing against their various types of movable assets.  It states that

(2) A security right may encumber—

(a) any type of movable asset, whether tangible or intangible [including future assets];

(b) parts of assets and undivided rights in movable assets;

(c) generic categories of movable assets; and

(d) all of a grantor’s movable assets.  (Movable Property Security Rights Act, § 7.)

The term intangible asset includes “receivables, choses in action (a right to sue), deposit accounts, electronic securities and intellectual property rights,” whereas tangible asset means “all types of goods and includes motor vehicles, crops, machineries, livestock.”  (Id. § 2.)

Notification of Security Rights and Creditor Rights

The function of the Office of Registrar is “to receive, store and make accessible to the public information on registered notices with respect to security rights and rights of non-consensual creditors” (creditors that obtained the right in the collateral by operation of law).  (Id. §§ 2 & 19.)  An initial notice must include the following content:

  • information about the guarantor and the creditor;
  • a description of the collateral in a manner that makes it possible to identify it;
  • effective dates of the registration; and
  • any other information relevant for statistical purposes.  (Id. §§ 8 & 27.)

Rules on the process for registering a notice and accessing the information collected by the Registrar will be enacted through regulations.  (Id. § 26.)

Application of a security right to a third party requires the registration of the right.  According to the Act, a “security right in any movable asset is effective against third parties if a notice with respect to the security right is registered with the Registrar.”  (Id. § 15.)

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