LSSA raises problems experienced by foreign nationals with banking sector

October 1st, 2013

By Barbara Whittle

Earlier this year the LSSA’s Immigration and Refugee Law Committee raised areas of concern with the Banking Association of South Africa relating to problems being experienced by various ‘categories’ of foreign nationals with the banking sector generally.

The issues raised by the LSSA fall into two broad areas, which cover –

  • the freezing of clients’ bank accounts where the client’s permit has lapsed; and
  • the position of the person whose status as a South African citizen or permanent resident has been withdrawn or amended, in consequence of having false identity documentation.

The LSSA clarified the legal position of refugees and asylum seekers, on the one hand, versus other foreign nationals on the other. The asylum seekers’ ‘interface’ with the Immigration Act 13 of 2002 is usually a very narrow and limited window of no more than 14 days. Once the person has a s 22 asylum seeker permit issued in terms of the Refugees Act 130 of 1998, the person falls to be dealt with in terms of the Refugees Act and not the Immigration Act. The latter comes with presumptions of being a refugee and assorted protections. The LSSA stressed the importance of dealing separately with refugees and asylum seekers, and with the handling of their permits.

As regards persons who hold permits issued in terms of the Immigration Act, the LSSA set out the issues ranging from where persons had allowed their permits to expire, for whatever reason, to those situations where the expired permit ‘status’ was solely the doing of the Department of Home Affairs.

Two different scenarios were raised in terms of the legislation: On the one hand, s 10(8) of the Immigration Act provides expressly and clearly that ‘an application for a change in status does not provide a status and does not entitle the applicant to any benefit under the Act’.   The de facto legalisation occurs, therefore as a matter of practice or reality rather than legality. The s 10(8) injunction did not address applications for the extension of an existing permit or for the re-issue of or for a change in the conditions of an existing permit (which would be the case where, for example, a company name had been changed or the department erred in the wording of the permit it issued).

In terms of the canons of statutory interpretation, the silence of the Act speaks volumes in the face of the express wording of s 10(8). The LSSA noted that it would be invaluable to hear from the department on the above and the consequences of this as the legal basis for the freezing of bank accounts.

False identity documentation

As regards bank products and foreign nationals, the LSSA inquired whether this related to the position, principally, of persons who took advantage of the Zimbabwean amnesty in 2010, and specifically those persons who were in possession of false South African identity documents and who had handed those over and had been issued with temporary residence permits. At the time, and because the department did not promulgate the rules or terms or even the fact of the amnesty, some people had been arrested and prosecuted.

The LSSA committee had raised this with the department and had been assured that, whereas the amnesty was a cabinet decision; all organs of state at every level were bound by the decision. Therefore, the state was not going to prosecute any Zimbabwean who had applied for relief in terms of the amnesty for having a false identity document.

The LSSA pointed out that this meant that the banks may now have clients who, for example, hold a 20-year bond or other bank product, in the name of a purported SA citizen or permanent resident, which person now holds a three-year temporary residence permit.

The LSSA indicated that these persons were so ‘embedded’ that there was no effective way of purging the population register without there being an amnesty that offered a complete solution to them.

In addition, the LSSA also noted the further category of persons with false identity documentation who had voluntarily and successfully approached the department to correct their status. This raised the question of how their relationships with the banks could be set right.

Compiled by Barbara Whittle, communication manager, Law Society of South Africa,

This article was first published in De Rebus in 2013 (Oct) DR 20.