Stefano Betti, Deputy Director of the Transnational Alliance to Combat Illicit Trade (TRACIT), Juan Carlos Buitrago, former General Director of Fiscal and Customs Police in Columbia. and founder and CEO of Strategos BIP, Lettia Davids, General Manager at the South African Liquor Brand Owner Associations (SALBA) and South African journalist Georgina Crouth. Photo: Robin-Lee Francke/IOL
The Europe, Middle East and Africa (EMEA) Security Conference and Exhibition has kicked off in Dubai in the United Arab Emirates where stakeholders from around the world gather to find solutions to combat the illicit trade on the black market.
The conference which runs from November 8 until November 9, brings together an international audience of over 300 leading specialists discussing the latest trends, developments, threats, and solutions relating to illicit trade and counterfeiting across industries.
The conference was last held in 2020, and this year’s theme is: “The power of collaboration and unity in the fight against illicit trade and counterfeiting”.
During a panel discussion, moderated by South African business journalist, Georgina Crouth, a delve into the problems facing South Africa, illicit trades, and possible solutions were highlighted.
On the panel was Juan Carlos Buitrago, former General Director of Fiscal and Customs Police in Columbia and founder and CEO of Strategos BIP, a consulting firm that specialises in intelligence and security risk management; Letitia Davids, General Manager at the South African Liquor Brand Owner Associations (SALBA); and Stefano Betti, Deputy Director of the Transnational Alliance to Combat Illicit Trade (TRACIT).
According to Betti, TRACIT released a report on organised crime, corruption, and illicit trade in South Africa in February this year.
In the report it said while South Africa may be one of the largest and most diversified economies in Africa and the only country represented in the G20 and BRICS economic groupings, it faced challenges from illicit trade on multiple fronts including but not limited to alcohol, cigarettes, fishing, mining, counterfeit electronics, pharmaceuticals, food, and apparel.
“The magnitude of the losses is staggering, draining revenue and resources from an economy that could usefully benefit from increasing investment in infrastructure and improving living conditions for citizens. For example, the South African Revenue Service (Sars) estimates that illicit trade costs the South African economy R100 billion annually.
In terms of lost tax revenues, Business Leadership South Africa (BLSA) estimates that the country loses around R250 million a day.
Furthermore, the OECD estimates that South Africa is losing $3.5 billion to $5 billion yearly, or more than 1% of its GDP, to illicit financial flows,” part of the report read.
Betti said illicit traders are distorting businesses and legitimate businesses have to now compete with illicit traders.
He urged South Africa to provide resources and power to the NPA to prosecute these crimes to curb illicit trading and counterfeiting.
The issue of partnerships was brought up during the panel discussion and Davids said it has been a struggle to partner with law enforcement, however, over this past year there has been some stride in this direction.
She said SALBA has partnered with Sars and the South African Police Service (SAPS), noting that the SAPS is under-resourced.
She said the illicit traders have become increasingly adept with their counterfeiting that it has become difficult to identify illicit goods.
Those found trading in illicit goods could face up to 50 charges as SALBA has now started working closely with the National Prosecuting Authority (NPA).
“Some cases are running for five years and some have not even reached the desk of the prosecutor. There is space for improvement and we would like to have more cases go to court and have successful prosecutions,” Davids told the conference.
She said the top challenge is now ensuring there is a limit to increases in taxes as the increase in taxes leads consumers to pique their interest in illicit goods as they are cheaper and more affordable. In turn, having legitimate role players in the sector suffering.
Davids is also of the view that if a link is made between the illicit trade and organised crime law enforcement agencies will be more involved.
Emphasis should also be made on educating consumers on what they’re buying and in turn bringing about awareness as to not scare them off.
“Just one national illicit trade task team (for all sectors) will make a difference and have so many successes,” she said.
In the last study, Davids said the alcohol industry reported a loss for fiscal at R20.5 billion, which is 22% of the entire market.
However, a study is currently under way and the report is yet to be published.
While the talks are under way way with the NPA, Davids said the association is willing to partner with any NPA region and national office to train prosecutors in this complex industry and have enough knowledge to take the case forward to prosecute individuals.
Buitrago said SA’s illicit trade is its biggest threat. He compared SA to Panama which he stated sees eight billion illegal cigarettes in transit annually from Asia.
He said illicit trade is revenue growth for organised crime, and much like organised crime has become rampant in South Africa, Colombian cartels are known across the world and this funding for organised crime comes from illicit trading.
“In the Organised Crime Index, South Africa has the third highest criminality in Africa.
“South Africa is number one with Columbia in their regions, both being in the top 10 among 193 countries.
“There is no doubt organised crime abuses the fragility of countries like South Africa, Panama, Ecuador,” Buitrago said.
Before his retirement, he was part of an operation that dismantled 93 illegal organisations with 25 linked to international serious crimes, confiscating illicit goods and money and arresting 1,500 people.
Buitrago said if government agencies joined hands with the private sector, these illicit trades could be eradicated.
robin.francke@inl.co.za
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