The South African Supreme Court of Appeal today found in my favour in a case about exchange controls. I will put the returned funds of R250m plus interest into a trust, to underwrite constitutional court cases on behalf of those who’s circumstances deny them the ability to be heard where the counterparty is the State. Here is a statement in full:

Exchange controls may appear to be targeted at a very small number of South Africans but their consequences are significant for all of us: especially those who are building relationships across Southern Africa such as migrant workers and small businesses seeking to participate in the growth of our continent. It is more expensive to work across South African borders than almost anywhere else on Earth, purely because the framework of exchange controls creates a cartel of banks authorized to act as the agents of the Reserve Bank in currency matters.

We all pay a very high price for that cartel, and derive no real benefit in currency stability or security for that cost.

Banks profit from exchange controls, but our economy is stifled, and the most vulnerable suffer most of all. Everything you buy is more expensive, South Africans are less globally competitive, and cross-border labourers, already vulnerable, pay the highest price of all – a shame we should work to address. The IMF found that “A study in South Africa found that the comparative cost of an international transfer of 250 rand was the lowest when it went through a friend or a taxi driver and the highest when it went through a bank.” The World Bank found that “remittance fees punish poor Africans“. South Africa scores worst of all, and according to the Payments Association of South Africa and the Reserve Bank, this is “..mostly related to the regulations that South African financial institutions needed to comply with, such as the Financial Intelligence Centre Act (Fica) and exchange-control regulations.”

Today’s ruling by the Supreme Court of Appeal found administrative and procedural fault with the Reserve Bank’s actions in regards to me, and returned the fees levied, for which I am grateful. This case, however, was not filed solely in pursuit of relief for me personally. We are now considering the continuation of the case in the Constitutional Court, to challenge exchange control on constitutional grounds and ensure that the benefits of today’s ruling accrue to all South Africans.

This is a time in our history when it will be increasingly important to defend constitutional rights. Historically, these are largely questions related to the balance of power between the state and the individual. For all the eloquence of our Constitution, it will be of little benefit to us all if it cannot be made binding on our government. It is expensive to litigate at the constitutional level, which means that such cases are imbalanced – the State has the resources to make its argument, but the individual often does not.

For that reason, I will commit the funds returned to me to today by the SCA to a trust run by veteran and retired constitutional scholars, judges and lawyers, that will selectively fund cases on behalf of those unable to do so themselves, where the counterparty is the state. The mandate of this trust will extend beyond South African borders, to address constitutional rights for African citizens at large, on the grounds that our future in South Africa is in every way part of that great continent.

This case is largely thanks to the team of constitutional lawyers who framed their arguments long before meeting me; I have been happy to play the role of model plaintiff and to underwrite the work, but it is their determination to correct this glaring flaw in South African government policy which inspired me to support them.

For that reason I will ask them to lead the establishment of this new trust and would like to thank them for their commitment to the principles on which our democracy is founded.

This case also has a very strong personal element for me, because it is exchange controls which make it impossible for me to pursue the work I am most interested in from within South Africa and which thus forced me to emigrate years ago. I pursue this case in the hope that the next generation of South Africans who want to build small but global operations will be able to do so without leaving the country. In our modern, connected world, and our modern connected country, that is the right outcome for all South Africans.

Mark

9 Responses to “Exchange controls in SA provide no economic guarantees of stability, but drive up the cost of cross-border relationships for everyone”

  1. Mark Shuttleworth Says He Will 250 Million Awarded To Him By SCA To Help Others Fight The System | SevAfrica.com Says:

    […] “I will commit the funds returned to me to today by the SCA to a trust run by veteran and retired constitutional scholars, judges and lawyers, that will selectively fund cases on behalf of those unable to do so themselves, where the counterparty is the state. The mandate of this trust will extend beyond South African borders, to address constitutional rights for African citizens at large, on the grounds that our future in South Africa is in every way part of that great continent.” He said on a statement in his website. […]

  2. Thoriso Mashego Says:

    Thank you Mr Shuttelworth, I am in the beginning stages of developing my company Mashcor Group PTY(ltd) and I was shocked to learn your about your case. People really have no clue that you are not allowed to do what you want with the money you earned fairly and legally.

    I will try to spread the word so that more people (specifically South Africans) are aware of your generosity and contribution on this matter.

    Thanks again

    Managing Director

  3. Nick-Venter Edwards Says:

    I have always held the notion that financial regulations and operations in South Africa make me feel like I am in the 1980’s. Take Western Union transactions, for instance. I find it a little absurd that one must have a South African bank account to access this global money transfer system.

    Your case was a worthwhile journey to pursue. Posterity will definitely bookmark this. Congratulations, Mr Shuttleworth! It’s one giant step for South Africans!!!

  4. Pat Says:

    Have case that is totally applicable to the Trust Mark is establishing. Its a case against an oragn of state. How do I contact the trust.

  5. Zagrah Darries Says:

    I am pleased with Mr Shuttleworth’s decision to assist those South Africans like myself who cannot overcome obstacles created at a constitutional level due to a lack of funds. I would like to make an appeal to his trust for assistance in my legal battle. Please could you advise me on how to contact the trust or a way forward.

    Kind regards

  6. Harry Terezakis Says:

    Hi there Mark,
    May I humbly request that you take note of my matter,being to challenge the constitutional validity of a temporary maintenance order, the Rule 43 of the Uniform Rules of Court.As an individual and in person doing this.A direct access Rule 18,handwritten by myself was lodged at the Constitutional Court under case CCT 13/12 and basically sent back to a High Court with no order as to costs.My respondents are my estranged wife and the Minister of Justice.Im now in the Western Cape High Court,Cape Town for hearing setdown for 30 October 2014.If you like,I will let you know what happens.
    With thanks and best wishes.
    Yours sincerely,
    Harry Terezakis.
    cell 0734455566.

  7. Foxinni Says:

    Wow Mark,

    You really are the classiest Z-african I can think of. Great work.

    M

  8. Erik Marais Says:

    Dear Mark
    Finex SA is a registered outsourcing Treasury at the Reserve Bank.We are 2 months operational but I have been a forex trader for years and worked at a South African bank as fx trader. We are investigating the possibility to apply for our own banking license in a few years. Exchange control make it difficult for exporters and importers to fully benefit the volatility of our currency. The SA Banks are also protected in the fact that they control this highly lucrative market in SA. It is very difficult to apply for a license. We focus on the small to medium importers and exporters by managing their currency exposure, unfortunately to do this properly we need a fx license. Thank you for taking on the State and I hope that the next step would enable companies like Finex SA to expand and be much more creative on the fx market for their clients.

    Kind Regards
    Erik

  9. Llewellyn Andrew Says:

    Dear Sir.

    Thank you for the battle you are waging on behalf of our fellow South Africans.

    I have often communicated with family members and friends back home only to hear how they have to battle each day as their resources are drained. I was surprised to find that Europe is significantly cheaper than South Africa. I can come by on much less than I needed back home.

    I read about your case and even mentioned it in political circles, I believe it helped win over more people to the cause I represent which is the cause of Liberty.

    In 2007/2008 I published a letter to the Independent where I called a Floor Crossing a Great Evil worth fighting. I could not ignore the abuse of power and how Politicians expected South Africans to give up their liberty and enslave themselves to the whims of the corrupt.

    It caused a wave as the IFP first responded in favour and more responders copying the ideas I set forth fought back. The argument against floor crossing had finally been won and to some degree liberty restored but this battle is far from over seeing that South Africans still face a Mountain.

    I am not a politician, have very little interest in politics but understand South Africans need powerful men to defend their freedom against those who will plunder without conscience.

    Much of the information relating to this is being suppressed and South African minds are numbed by the government fed media except a few stars.

    I want to liberate South Africans by creating a free media. I need support in this and believe the internet is the key, so too operating systems which are affordable.

    I currently use Ubuntu and switched most of my computers to it. With your support we can create an environment where online media and free expression can flourish in South Africa. I do not ask for money but simply support.

    With kind regards.

    Llewellyn Andrew