NATIONAL CONVENTIONAL ARMS CONTROL AMENDMENT BILL Briefing to the Portfolio Committee on Defence 12 August 2008

GENERAL BACKGROUND NCACC is a Govt Function that seeks to achieve responsible, accountable and regular trade. NCACC is a Govt Function that seeks to achieve responsible, accountable and regular trade. This function gives effect to the new value system of the current South African society. This function gives effect to the new value system of the current South African society. This function is part of a wider govt system of the South African arms control system (SAPS Firearms Registry and DTI’s Non Proliferation Council). This function is part of a wider govt system of the South African arms control system (SAPS Firearms Registry and DTI’s Non Proliferation Council). This function exists because there is a defence industry base in South Africa. This function exists because there is a defence industry base in South Africa.

CONSENSUS THAT GUIDES ARMS CONTROL  International consensus on the sensitivity of defence industry products and services.  International consensus on requirement for effective Arms Control.  Domestic consensus on Responsible Trade, Regularity and Accountability.  South Africa to be a Responsible Player in global market.  Promotion of Certainty, Predictability, Responsibility, Accountability, Regularity and Objectivity.

CONTEXT The Current Act been in operation since The Current Act been in operation since Lot of lessons learnt during its implementation which necessitated the review of the Act and Regulations. Lot of lessons learnt during its implementation which necessitated the review of the Act and Regulations. These, inter alia, include: These, inter alia, include: Practical admin challenges. Practical admin challenges. Legal challenges. Legal challenges. Realities of industry both domestically and internationally. Realities of industry both domestically and internationally. Requirement to forge effective relationship with the industry. Requirement to forge effective relationship with the industry. Issues of responsibility and maturity. Issues of responsibility and maturity.

THE REVIEW PROCESS Review Process commenced in Review Process commenced in An Interdepartmental Workgroup was set up for the Review. An Interdepartmental Workgroup was set up for the Review. Amendments were approved by NCACC and certified by the State Law Advisor. Amendments were approved by NCACC and certified by the State Law Advisor. On 14 May 2008 Cabinet approved the proposals contained in the Bill. On 14 May 2008 Cabinet approved the proposals contained in the Bill. The 2008 Defence Industry survey contributed to the process. The 2008 Defence Industry survey contributed to the process. The Bill has been introduced to Parliament in June The Bill has been introduced to Parliament in June 2008.

PROPOSED AMENDMENTS Key Objectives Key Objectives Improve and facilitate the Regulatory role of the NCACC. Improve and facilitate the Regulatory role of the NCACC. Bring the Act in line with the reality of business. Bring the Act in line with the reality of business. Scope of Application Scope of Application Correct the orientation of the Act. (Trade bias) Correct the orientation of the Act. (Trade bias) Include domestic transfers. Include domestic transfers. Include possession. Include possession. Include reference to dual-use goods listed in the Wassenaar Arrangement. Include reference to dual-use goods listed in the Wassenaar Arrangement.

Definitions Definitions Armed conflict. Armed conflict. Controlled items to include conventional arms, dual-use goods an tech and services. A list to be published. Controlled items to include conventional arms, dual-use goods an tech and services. A list to be published. Relate definition of Conventional Arms to Munitions List of the Wassenaar Arrangement Relate definition of Conventional Arms to Munitions List of the Wassenaar Arrangement Incorporate controls related to Dual Use Goods and Services. Incorporate controls related to Dual Use Goods and Services. Domestic Transfer. Domestic Transfer. Permit definition to be related to Section 14. Permit definition to be related to Section 14. Prohibition of Mercenary Activities Act. Prohibition of Mercenary Activities Act. Scrutiny Committee definition related to Section 7A. Scrutiny Committee definition related to Section 7A.

Possession. Criminalise but exclude possession by legal govt security agencies. Possession. Criminalise but exclude possession by legal govt security agencies. Objects of the NCACC (Sec 3) Objects of the NCACC (Sec 3) Extend the object to include: Extend the object to include: Regulation of domestic transfer & possession of controlled items. Regulation of domestic transfer & possession of controlled items. Implement the Prohibition of Mercenary Activities Act. Implement the Prohibition of Mercenary Activities Act. Functions of the NCACC (Sec 4) Functions of the NCACC (Sec 4) Extend to include the functions of the NCACC ito the Prohibition of Mercenary Activities Act. Extend to include the functions of the NCACC ito the Prohibition of Mercenary Activities Act. Over and above the SAPS requirement to obtain NCACC approval when certain export threshold are reached, give the NCACC powers to prescribe thresholds for other possible future Acts on arms. Over and above the SAPS requirement to obtain NCACC approval when certain export threshold are reached, give the NCACC powers to prescribe thresholds for other possible future Acts on arms.

Cross Referencing (various Sections) Cross Referencing (various Sections) Prohibition of Mercenary Activities Act Prohibition of Mercenary Activities Act Firearms Control Act. Firearms Control Act. Non-Proliferation Act. Non-Proliferation Act. Explosives Act. Explosives Act. Electronic Communication Act. Electronic Communication Act. Scrutiny Committee (Sec 7A) Scrutiny Committee (Sec 7A) Legislate for the SC, its composition and functions. Legislate for the SC, its composition and functions. Dealing with Dual-Use Good (Sec 13) Dealing with Dual-Use Good (Sec 13) Set less onerous control standards for dual use good and technologies (Sec 13). Set less onerous control standards for dual use good and technologies (Sec 13).

End User Certificates (Sec 17) End User Certificates (Sec 17) As a measure of control, oblige recipient countries to provide EUCs. As a measure of control, oblige recipient countries to provide EUCs. Provide selective and considered exemptions on good cause shown. Provide selective and considered exemptions on good cause shown. This will be done on a case by case, for foreign country onwards export without EUC encumbrances. This will be done on a case by case, for foreign country onwards export without EUC encumbrances. To cater for the market realities where defence industry operations are arranged on value chain addition principle (Warehousing and Integration). To cater for the market realities where defence industry operations are arranged on value chain addition principle (Warehousing and Integration).

Disclosure and Non-disclosure of Information (Sec 23) Disclosure and Non-disclosure of Information (Sec 23) Retain the NCACC’s reporting obligations to the United Nations and Cabinet Retain the NCACC’s reporting obligations to the United Nations and Cabinet Propose for annual reporting to Parliament as opposed to quarterly and annual reporting. Propose for annual reporting to Parliament as opposed to quarterly and annual reporting. Retain the NCACC’s discretion on level and kind of information to be released (In line with PAIA). Retain the NCACC’s discretion on level and kind of information to be released (In line with PAIA). Retain the obligation on NCACC to provide reasons on admin decisions taken. ( In line with PAJA). Retain the obligation on NCACC to provide reasons on admin decisions taken. ( In line with PAJA).

Offences and Penalties (Sec 24) Offences and Penalties (Sec 24) Cater for trading and possession violations. Cater for trading and possession violations. Administrative Penalties (Sec 24A) Administrative Penalties (Sec 24A) Provide for an administrative mechanism to deal with less serious offences. Provide for an administrative mechanism to deal with less serious offences. Empower the NCACC accordingly. Empower the NCACC accordingly. Retain the court process option. Retain the court process option. The administrative penalties process to be comply with fair administrative action The administrative penalties process to be comply with fair administrative action

Exemptions (Sec 25A) Exemptions (Sec 25A) Exempt the SAPS and the SANDF from permit requirements in instances of emergency operations and deployments. Exempt the SAPS and the SANDF from permit requirements in instances of emergency operations and deployments. Special consideration for urgent export authorisation (Chair NCACC + 1 Member) with ex post facto ratification. Special consideration for urgent export authorisation (Chair NCACC + 1 Member) with ex post facto ratification.

Industry Internal Compliance Program (ICP)-Regulations Industry Internal Compliance Program (ICP)-Regulations To cater for the promotion of best practice in the industry. To cater for the promotion of best practice in the industry. Provide for a platform to issue guidelines in the Regulations. Provide for a platform to issue guidelines in the Regulations. In terms of these regulations, companies to establish mandatory internal compliance programs. In terms of these regulations, companies to establish mandatory internal compliance programs. Link to this Program will be the grading of companies according to their performance. Link to this Program will be the grading of companies according to their performance.

Grading of Companies (Regulations) Grading of Companies (Regulations) Provide a platform for a mechanism to grade companies ( A B C). Provide a platform for a mechanism to grade companies ( A B C). Methodology to grade companies to be provided for in the Regulations. Methodology to grade companies to be provided for in the Regulations. Methodology to, inter alia, include: Methodology to, inter alia, include: Compliance with permit conditions Compliance with permit conditions Company internal compliance programs Company internal compliance programs

Program Approvals (Regulations) Program Approvals (Regulations) Introduce the program approval concept. Introduce the program approval concept. Allow for multiple export/import permits. Allow for multiple export/import permits. This is to be informed by how the company conducts itself and how it is graded. This is to be informed by how the company conducts itself and how it is graded. Mandatory Reconciliation requirements. Mandatory Reconciliation requirements. No derogation from the Arms Control principles. No derogation from the Arms Control principles.

Regulations and Notices Regulations and Notices Empower the NCACC to Issue Notices Empower the NCACC to Issue Notices Cater for periodic publication of lists of conventional arms, dual use goods and services. Cater for periodic publication of lists of conventional arms, dual use goods and services. Empower the NCACC to make regulations on any area of the Act e.g. Empower the NCACC to make regulations on any area of the Act e.g. Types of permits Types of permits Conditions applicable. Conditions applicable. Information to be released. Information to be released. Delegations Delegations The Implementation of the Amendments will be best achieved through Proper Regulations The Implementation of the Amendments will be best achieved through Proper Regulations

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