South Africa needs a well-resourced, independent, specialized agency to investigate illegal trade. The call was made at a panel discussion hosted by the South African Consumer Goods Council on Thursday.
Judge Dennis Davis, chairman of the Davis Tax Committee, said the number of reports he received about illicit trade was enough to convince him that the NPA could not deal with such crimes. By itself.
The Davis Fiscal Committee evaluates the country’s fiscal policy framework.
“Not a day goes by that I don’t get a call from one industry or another telling me that, to a large extent, their business is vitally affected by illegal trade coming into the country under circumstances where duty and customs are not paid, so the illegal component replaces the legal component,” Davis said.
“I am sure that the National Public Ministry alone is not capable of dealing with this because it cannot be asked to deal with all cases of state capture and on the other hand try to make a very significant advance in the illicit trade. ”.
The NPA derives its mandate from section 179 of the Constitution, which empowers the tax authority to initiate criminal proceedings on behalf of the state.
“The Hawks recently reported that they have 48% vacancies to fill. The government is losing revenue, they are losing excise taxes because of goods being smuggled into the market,” Davis said.
On Tuesday, the Priority Crime Investigation Directorate (Hawks) said the unit was operating at only 52% capacity with around 1,500 positions still to be filled.
Davis said it was vital to reconstitute something similar to the Scorpions, one that would focus on the illicit trade. “The Hawks’ understaffing is inconceivable. When it comes to syndicated organized crime, we want a specialized integrated NPA that can start operations like we used to so we can get better results and we should invest as much money as it takes to get the right people.
“Unless there is the political will to curb rent seeking and essentially attack head-on [illicit trading]I am really concerned that the illicit economy will continue to overwhelm society,” Davis said.
Mark Shaw of the Global Initiative Against Transnational Organized Crime agreed with Davis, saying a well-resourced, specialized and independent investigative body was needed.
“The Hawks are doing a good job, but I would say they are short on resources. It would also raise issues around their independence from how they are structured. Essentially a lot of what we’re doing is reactive until we switch to a more proactive mode, I think we’re going to have a hard time responding appropriately,” Shaw said.
The Hawks target organized and economic crime, corruption and other serious crimes referred by the President or another division of the South African Police Service.
It is impossible to quantify the exact costs of illicit trade to the economy, but according to the 2019 Global Financial Intelligence (GFI) report, South Africa loses around R152 billion a year due to illicit economic activity.
Carina Bruwer, a senior fellow at the Institute for Security Studies, said South Africa also needed to work with other countries.
“Many of the products mentioned today are traded internationally and are a very important part of international organized crime. It is important that South Africa begins to cooperate with other regions of the world where these products come from or transit.” Bruwer said.
In the case of illicit cigarettes, for example, most of that market was taken up by locally made ones, while other brands smuggled in from neighboring countries like Mozambique and Zimbabwe made up the rest, according to the Institute for Security Studies.
“I think it’s important not to necessarily focus on solving things in South Africa, but to make sure that we have an international relationship. [so] that we can cooperate with other countries fighting illegal trade,” Bruwer said.
