FARHAD KHAN: Rica’s recalibration is an opportunity to restore order

Late last year, President Cyril Ramaphosa sent the Regulation of Interception of Communications & Provision of Communication-Related Information Amendment Bill (Rica) back to the National Assembly. This represents an ideal opportunity to rectify and remedy a number of systemic deficiencies that have long plagued Rica. Deficiencies in our law have for too long been contributing to high crime levels and complicating the nation’s efforts to exit the Financial Action Task Force’s (FATF’s) greylist. 

One of the key issues parliament can now address is the significant proliferation of unregistered and improperly registered SIM cards. This deficiency creates an environment where law enforcement cannot successfully investigate crimes, ranging from fraud, extortion, murder and kidnapping to other violent offences. The ease with which SIM cards can be acquired and discarded, without proper registration, means criminal activity is able to thrive with impunity as there is no link to an identifiable actual person.

The scale of the problem is underscored by figures provided by the police minister, which recently revealed that 62% of extortion cases under police investigation involved the use of unregistered SIM cards. There is a direct correlation between inadequate SIM card regulation and the prevalence of crime.

According to the SA Banking Risk Information Centre's annual crime statistics report, released in October 2024, the digital banking sector faced an unprecedented 45% increase in fraud in 2023, resulting in a 47% surge in financial losses exceeding R1.2bn.

Banking app fraud emerged as the dominant threat, accounting for 60% of all digital banking crimes, with an alarming 89% year-over-year increase. Notably, 58% of all mobile banking app fraud incidents involved SIM swaps, highlighting the direct link between SIM card vulnerabilities and financial crime.

The current Rica legislative framework is incohesive and impractical, leaving the Rica system open to abuse. The Independent Communications Authority of SA (Icasa), the departments of communications & digital technologies and justice & constitutional development each hold a piece of the puzzle.

Icasa provides oversight to mobile network operators, and as such is responsible for regulating SIM card registration. But Icasa does not have the ability to enforce Rica effectively. The department of justice & constitutional development, which holds primary legal responsibility for Rica, appears to lack effective enforcement mechanisms and oversight capacity to ensure compliance. This division of responsibilities has resulted in a regulatory vacuum, exploited by a range of actors, often with nefarious intent.

Apart from contributing to high crime levels, the situation has also significantly contributed to SA being on the greylist. Financial transactions, increasingly conducted via mobile devices, are vulnerable to fraud and identity theft. The country's greylisting by the FATF is a consequence of weaknesses in its anti-money laundering framework. These types of crimes must be addressed if SA is ever to get off the greylist — and with its economy struggling the country must do everything possible in this regard. Greylisting has negative economic and reputational consequences, affecting foreign investment, aid and financial sector stability.

The case for comprehensive legislative reform is clear. As experts in the field we have made recommendations to the portfolio committees on police, justice, finance and communications that highlight tangible solutions that can be implemented. Tamper-proof packaging for SIM cards, enhanced verification processes and stricter oversight of distributors will create a more secure provisioning and activation process for SIM cards.

Biometric verification is another step in the right direction as it would enhance security and tracking capabilities. However, its implementation necessitates the involvement of the department of home affairs to facilitate instant validation and document verification, ensuring a robust and reliable system. This is one of the two ways to register a SIM card.

The second — purchasing a preregistered SIM card at a store with a verified Rica agent — contains major flaws. The Rica agent will take your personal information but is not required to verify this information and it is not run against any formal database.

The practice of preregistering SIM cards under false identities, a direct violation of Rica’s intent, must be eliminated. Aligning Rica’s enforcement with financial sector safeguards, as advocated to members of the standing committee on finance, is crucial for protecting the integrity of SA’s financial systems.

The referral of the Rica Amendment Bill back to parliament provides a golden opportunity to address these systemic flaws. This is not merely about amending legislation to satisfy constitutional requirements, it is about creating a robust framework that aligns with the realities of digital communication and financial transactions. Rica must serve its intended purpose. Why create legislation that only does half the job?

The task requires a concerted effort from all stakeholders, including mobile network operators, distributors and regulatory bodies. It demands a legislative framework that is clear, enforceable and aligned with international standards. Given the existing mandate of the portfolio committee on justice and constitutional development to amend the Rica Bill, it would be in SA’s economic and security interests to engage broadly.

This engagement should encompass representatives from affected government departments — justice, communications, police, home affairs and the Treasury — as well as industry stakeholders, industry experts and relevant civil society organisations, to ensure an effective legislative outcome.

In its present form the Rica Bill provides only a partial and temporary fix for a deeply rooted policy flaw. Only a comprehensive and collaborative approach can deliver a lasting solution. By seizing this opportunity SA can restore order to its communication landscape, strengthen its financial security and take a decisive step towards exiting the FATF greylist.

• Khan is an independent telecommunications consultant.