Cape Town - The country’s financial authorities are piloting a new legislative tool to target unexplained wealth.
The National Prosecuting Authority (NPA), Directorate of Priority Crime Investigation (DPCI), Department of Justice (DoJ) and the South African Revenue Service (Sars), led by the Financial Intelligence Centre (FIC) and operating under the auspices of the Anti-Corruption Task Team (ACTT), are collaborating on the joint project to "deprive" those who support their lifestyles with "ill-gotten gains" from their unexplained wealth.
In a joint statement, the authorities said it would make it more “cost effective, faster and easier to investigate and recover assets acquired through suspected unlawful activities such as corruption, fraud, tax evasion and money laundering”.
“This will better enable South Africa to confiscate criminal proceeds in line with the Financial Action Task Force (FATF) recommendation in this regard. The law enforcement agencies will use existing asset recovery legislation to secure appropriate orders issued by our courts to confiscate unexplained wealth, thereby enabling the South African authorities to recover suspected ill-gotten gains,” they added.
Currently it falls on the State to prove that a defendant’s legitimate sources of income are not sufficient to justify assets that the defendant owns.
Now the onus will be on the defendant to prove that the source of the funds for the assets owned is legitimate and that the assets were not acquired from the proceeds of criminal activities.
“A court can therefore make an order to confiscate unexplained wealth on the basis that the wealth of a person or entity is disproportionate to the lawful income derived or declared by the person or entity and that the defendant is unable to justify or explain how the wealth was lawfully acquired. This approach will enable law enforcement agencies and Sars to act, even in cases where such unlawful activity cannot be proven beyond reasonable doubt,” the authorities added.
The participating agencies have entered into an inter-agency memorandum of agreement to formalise their collaboration and the practical implementation of the initiative in the cases to be selected; and to regulate the confidentiality of information to be shared among the agencies.
They said preparatory activities for the next phase are in progress in order to select an appropriate case to test the existing provisions that target unexplained wealth in the courts.
Cape Times