15 February 1996 Issued by: SA Communication Service
STATEMENT ISSUED BY THE DEPUTY MINISTER OF FINANCE ALEC ERWIN ON THE JOINT PUBLIC/PRIVATE SECTOR INITIATIVE TO COMBAT FRAUDULENT TRADE AND RELATED PRACTICES
The integration of the South African economy into the global markets has given rise to the increasing incidence of fraudulent imports, exports and the evasion of excise duties and vat on traded products. Perpetrators of these offences are undoubtedly taking advantage of the present low capacity of Customs and Excise and Inland Revenue to effectively counter such sophisticated practices.
The Government has approved the restructuring of Customs and Excise and Inland Revenue into a new autonomous body, the South African Revenue Services, with its own budget and other resources with effect from 1 April 1996. It will, however, take time to fully restructure these administrations so as to fully enhance their law enforcement capacity.
In the interim special steps will be taken to deal with the escalating incidence of fraudulent trade practices. The continuation of such practices could destabilise South Africa's industrial and international trade policies, causing job losses and undermining ax morality. Certain industries have been particularly heavily affected. These industries have as a consequence established a Customs and Vat Enforcement Caucus, with its own constitution and secretariat and, with the support of organised labour, approached the department of Finance with proposals aimed at strengthening the law enforcement capacity of the authorities to police fraudulent trade practices.
The public authorities involved in the policing of trade-related frauds, namely Customs and Excise, Inland Revenue, South Africa Police Service, the South African Reserve Ban (Exchange Control) and the Department of Trade and Industry, have now established a Customs Law Enforcement Task Group which will share information relating to alleged fraudulent trade practices. This Group will evaluate reports of alleged contraventions, co-ordinate investigations and make staff available for this purpose in accordance with the agreement outlined in the Customs Law Enforcement Task Group document.
The Customs and Vat Enforcement Caucus, comprising the various sectoral industries affected by the fraudulent trade practices, will route, via its secretariat, reports from the various sectoral industrial task groups to the Customs Law Enforcement Group. The sectoral industrial task groups will provide, if necessary, investigative resources, audit functions and legal services to the Customs Law Enforcement Task Group to assist in the prosecution of transgressors.
The Government welcomes and supports this joint effort by the law enforcement authorities, the caucus group and organised labour to join forces inorder to stem the rising incidence of fraudulent trade practices. The Government is determined to do everything in its power to stamp out all forms of corruption and transgressors will be mercilessly prosecuted. The Government will also seek to obtain the co-operation of Botswana, Lesotho, Namibia and Swaziland to improve the policing of cross border trade frauds.
Enquiries: Dr J Jcobs (012) 323 1912