second-hand goods bill, [b 2b-2008] briefing to the ncop select committee on security and...

SECOND-HAND GOODS BILL, [B 2B-2008]

BRIEFING TO THE NCOP SELECT COMMITTEE ON

SECURITY AND CONSTITUTIONAL AFFAIRS

6 MAY 2008

EXISTING LEGISLATION

Primary legislation: Second-Hand Goods Act, 1955 (Act

No. 23 of 1955)

Purpose: To regulate the business of dealers

in second-hand goods

EXISTING LEGISLATION

In terms of the current Second-Hand Goods Act: dealers must register with the SA Police Service

and keep stock registers. Minister for Safety and Security may exclude

certain goods from the operation of some or all of the provisions of the Act.

Numerous exemptions made many years ago caused deregulation of important items - such as household and office equipment.

REASON: REVIEW OF 1955 ACT

Trade in stolen goods flourishes in a legislative environment inadequate to combat such trade.

Illicit market for aluminium and copper stimulates theft of millions of Rand worth of electrical cabling, crippling telecommunications and electrical systems at huge costs.

Theft and robbery of motor vehicles for “chop shops”.

Computers, laptops, camera’s office and household equipment obtained through theft, robbery and housebreakings/robberies.

EXISTING LEGISLATION

The present legal framework is outdated and has serious shortcomings.

The SAPS formulated a Draft Bill, based on the 1955 Act.

Business Against Crime facilitated interaction with the industry.

The Draft Bill was published in Gazette during 2003 for comment, from all role-players and stakeholders.

CONSULTATIONS

Taking into account the inputs from the stakeholders, the draft Bill published in 2003, was totally redrafted to reflect the principles which emanated from consultations.

The Draft Second-Hand Goods Bill, 2005. was published again on 28 October 2005 for comments by stakeholders in Government, industry and the public.

COMMENTS ON DRAFT SECOND-HAND GOODS BILL PUBLISHED IN GAZETTE

NOTICE 2017 OF 2003

Association of Importers of Worn Overcoats - South Africa; Barloworld Ltd; Bowman Gilfillan Attorneys; Cash Converters; Cash Crusaders; DamRail (Pty Ltd); Eurotrade Metals Africa (Pty) Ltd; Edward Nathan & Friedland Attorneys; Ford National Dealer Council; International Trade Administration Commission; Iscor Ltd; KPMG; Mangaung Local Municipality; Metal Recyclers Association of South Africa;

2003 Consultation process cont…

Metropolitan Police Services South Africa Nodal Point; MDI; NADA; Recycling Association of South Africa; Retail Motor Industry Organization; Second Hand Dealer and Pawn Board; Senwes Ltd; South African Police Service; Vodacom (Pty) Ltd; Voorspoed Scrap Metals CC T/A Scrap Metal Dealers; Volkswagen SA and Wesbank.

CONSULTATIONS

As a result of the comments, extensive consultations followed with role players in the following categories: Scrap Metal Dealers General Dealers and Pawnbrokers Vehicle dealers Government and Parastatals

CONSULTATIONS

With Government: the DTI was specifically consulted in

respect of the imported goods market (second-hand clothes, vehicles etc).

Spoornet, Transnet, Eskom, Telkom and some Local Governments were consulted regarding theft of non-ferrous metals

CONSULTATIONS

Draft Bill tabled in Trade and Industry Chamber of NEDLAC in 2006.

Government, Business and Labour discussed the draft, no disagreements were noted and the principles in the Draft Bill supported by stakeholders.

Introduction in Parliament of Draft Bill supported by the JOINTS meeting, as well as the JCPS Directors-General Cluster meeting.

SUBMISSIONS DRAFT SECOND-HAND GOODS BILL, 2005, PUBLISHED IN GAZETTE, NOTICE 1937 OF

2005

Metal Recyclers Association of South Africa B Maguire and others and Edward Nathan and

Friedland Attorneys Recycling Association of South Africa

I M Davie and others - Eurotrade Metals Africa Retail Motor Industry Organization

G McGraw and others - NADA and MDI Independent Dealers Association

N Bosch and others D Toerien - Bowman Gilfillan Attorneys P Forshaw and others - Cash Converters

2005 Consultation process cont…

J Camacho and others - Cash Crusaders T Fuhri and C Preller - Second Hand Dealer and

Pawn Board E Anstey - Association of Importers of Worn

Overcoats - South Africa SA Police Service (several members) International Trade Administration Commission

(ITAC) - M P Snyman Import & Export Control Business Unity South Africa

Business Against Crime SACOB

Working group - Trade and Industry Chamber of NEDLAC.

INDUSTRY REQUIREMENTS

Each industry segment have unique challenges and requirements

Regulations should create a separate and tailored framework for each of the different industry segments

Ideal is to harmonize the needs of Government (SAPS) in preventing crime with that of second-hand dealers.

APPLICATION OF THE ACTClause 2 Act does not apply to second-hand

goods sold by way of public auction authorised by warrant of execution or order of court of law.

Act does not apply to dealer who is a member of accredited association, to the extent members are exempted by Minister.

Only members of associations accredited by National Commissioner may be exempted.

REGISTRATION Clause 3 All persons who carries on business as

dealer must be registered. Application is made to National Commissioner and for every premises.

Dealer includes person who carries on business of second-hand goods, scrap metal dealer and pawnbroker.

Definitions of scrap metal, second-hand goods, precious metals and pawnbroker are relevant to this obligation

CERTIFICATE OF REGISTRATION

Issued by National Commissioner, valid for five years (clause 7)

Provision for amendment, conditions, variation of conditions (clause 8,9)

Termination and cancellation of registration (clause 10)

Renewal of registration- to be applied for at least 90 days before registration (clause 11)

DISQUALIFICATIONS

Previous conviction- sentenced to imprisonment without option of a fine for certain offences (clause 14)

In preceding 10 years convicted for offence in terms of 1955 or this Act.

Unrehabilitated insolvent. Under 18 years. Does not permanently reside in RSA Other law disqualifies person from carrying

on a business Business of which person with interest, a

partner or beneficiary of trust is disqualified

FUNCTIONS OF DEALERS’ ASSOCIATIONS (CHAPTER 3)

Establish categories of dealers according to goods

Establish and maintain minimum legal and ethical standards

Inspect members for compliance Make recommendations to National Commissioner

iro registration Assist members with research and development. Advise the National Commissioner in respect to

industry standards and technological developments in the industry

Must keep members’ registers

RECORDS BY DEALERS (CHAPTER 4)

Identity and particulars of all acquisitions or disposal of goods.

Description of goods. Signature/ name/ identity number of

client. Copies of identity document or

passport Retain documents for 5 years.

FALSE INFORMATION AND SUSPICIOUS TRANSACTIONS

If there is suspicion on information provided Suspicion that goods are stolen Duty to report to police station Reports to be noted in prescribed manner and

complainant issued with acknowledgement Criminal offence if not reported Goods may not be changed or altered within

period of seven days

RESTRICTIONS ON DEALERS AND PAWNBROKERS (Clause 23)

No dealer may- Acquire or accept in pawn goods from any

person under the age of 18 years. Take into his possession goods of which

he not convinced that the person is owner or titleholder and authorised to dispose thereof.

Deliver goods within seven days to be altered or changed.

Accept in pawn firearms or ammunition.

MOTOR VEHICLE RECORDS (CHAPTER 5) Vehicle identification number Odometer reading Exterior trim and colour. Distinguishing marks such as microdot

particulars. Full particulars of person disposing of

vehicle, including id number, full names, address, original id document

Proof of registration of vehicle Keep copy of id document or passport. Keep copies for five years.

OBLIGATION TO REGISTER AS RECYCLER (CHAPTER 6)

Dealer involved in recycling of any controlled metal must register

Only a registered recycler may possess apparatus which can be used for recycling of any controlled metal

Acquisition, possession and disposal of burnt cable is an offence

COMMUNICATION EQUIPMENT (CHAPTER 7)

Full records to be kept. Description of goods. Remember that section 40 of

Interception legislation (RICA) deals extensively with sale of cellular phones and details required.

Bill is subject to section 40 of RICA

ENFORCEMENT (CHAPTER 8) Provision for routine inspections

during working hours. Warrants for search and seizure. Powers in respect of search and

seizure and sealing off of premises. Provision to extend powers in Act to

public entities, to assist with enforcement- eg Spoornet, Telkom and ESCOM

APPEALS (CLAUSE 33)

Minister may decide appeals against against decisions taken by National Commissioner.

OTHERS REGULATIONS Clause 41 Empowers Minister to make

regulations which would suit the law enforcement needs in respect of respective sectors in industry or different types of goods.

Transitional provisions Clause 43 Repeal of 1955 Act, Clause 44 Coming into operation date

determined by President Clause 45

ACCREDITATION (CHAPTER 3) Application to National Commissioner. Refusal requires opportunity for applicant

to make written representations before final decision 30 days.

Dealers association to be notified of decisions in respect of application

Can be cancelled if there is non-compliance.

Opportunity for representations where cancellation is considered 30 days.

INDUSTRY

Regulations must provide for:

General Dealers and Pawnbrokers. Motor Vehicle and Vehicle Parts Dealers. Scrap Metal Dealers. Recyclers. Communication Equipment Dealers. Auctioneers.

ROLE OF ASSOCIATIONS

Each industry segment may be represented by one or more associations.

Regulations will determine the minimum standards for associations to comply with.

Regulations determine minimum standards applicable to the members.

ROLE OF ASSOCIATIONS

The role of the Accredited Associations will be to- Support their members in all respects

(registration application, education, information, business management etc).

Recommend legal changes. Promote ethical trading amongst its

members. Inspect members

SELF-REGULATION

The Bill makes provision for a degree of self-regulation

Bill can operate without any self-regulation

Self-regulation will only apply in areas where there is a proven record and where there is no risk of abuse.

SUMMARY

Bill provides for strong regulatory environment impacting on all second-hand goods and dealers.

Bill will address each market segment uniquely through Regulations.

Legitimate dealers will benefit. Dealers in /recyclers of metals such as

copper and aluminium must be registered as such and no recycling equipment may be kept at any premises other than that of registered recyclers.

Thank you

PC Jacobs South African Police Service