an overview to the illegal / covert economy in south africa · • historically - exploitation of...
TRANSCRIPT
An overview to the Illegal / Covert Economy in South
Africa
TISA AIT Conference – Cape Town
12 November 2013
The Tobacco Institute of Southern Africa
When you hear the word “piracy”
– what do you think of
OR
Illicit economy was estimated at R178bn
(10% of GDP) in 2007
20 Serious Crimes Number
of Cases
Total 2,126,537
Murder 16,259
Sexual Crimes 66,387
Robbery 53,540
Robbery with Aggravated Assault 105,888
Illegal Possession of Firearms 14,872
Drug Related Crimes 206,825
Commercial Crimes (Fraud) 91,569
Crimes Direct Impact on
Business
253,973
2012 – 425 killed
YTD 2013 – 515 killed
R6.5bn lost
R742mn
R2bn
R5bn +
R3bn
30 000 jobs
Identifying Illicit Product in South Africa
Is the product compliant with National Health
Regulations?
No
Yes
Is the product sold below the
industry determined minimum
commercially viable price?
Yes
R 15-50
The size and impact of illicit cigarettes
Economic and Social Illicit trade approx. 3rd of total industry
5,613
7,580
9,406
3,225
21%
26%
30%
28%
2010 2011 2012 2013 YTD May
Illicit Size (Mns) Illicit Incidence
2,860
4,208
5,533
2,007
2010 2011 2012 2013 YTD May
R14.5Bn, Est. Govt losses since 2010
Sources of Illicit in SA % Volume Contribution
0%
20%
40%
60%
80%
2010 2011 2012 2013
Zimbabwe South Africa Botswana Dubai/China
Illicit Trade : Operating Methods
Manufacturing Outside of South Africa
• Historically - Exploitation of Customs Processes
• SARS Customs Modernisation forces change to:
Mis-Declaration of product
Non-Declaration of product
Concealed Consignments
Outright Smuggling
Manufacturing Inside South Africa
• Excise Account Manipulation
Concealment Methods
Public – Private Sector Co Operation
Operational capabilities across the
supply chain
Active Participation and
Pro Active Ongoing
Engagement
Regional
Engagement Full Support on
Administrative
Controls aimed at Illicit
Increased awareness of illicit
and tactical projects
What we need break the back of illicit trade
From Authorities:
From Industries:
Penalties &
Sanctions
Enforcement
Authentication / Verification
& Track and Trace
Technologies Decisive Industry Reaction
to Traders of Illicit Goods
Ie Rogue Trader
Develop Clearer
understanding
of illicit/covert
econonmy
Active Industries
collaboration with
Government Engagement
ADMINISTRATIVE
CONTROLS
Illicit Trade Protocol
Customs 2 Customs
Excise Controls
