Keynote remarks by the Deputy Minister of Police, Hon. Ms. Makhotso Maggie Sotyu (MP) at the Tobacco Institute of Southern Africa (TISA) Annual Anti-Illicit Trade (AIT) Conference
Programme Director
Members of the Diplomatic Corp represented here
TISA Executive
All Participating Countries
South African Government Departments
Distinguished Delegates of the Conference
Ladies and Gentlemen
On behalf of the Minister of Police and the South African Government, I would like to extend a very warm welcome to all delegates and special guests of this important Conference.
We acknowledge, with gratitude, the presence of various enforcement agencies, revenue services and customs agencies from the 18 countries across the African continent and across the globe. You are all most welcome to our country, South Africa.
I know you have already been meeting since yesterday, busy finding ways to tackle this enormous global problem – the illicit trade in cigarettes. By now, you are must be all aware of the scale and scope of this challenge.
But, I am tempted to start with the good news, before bombarding you with the worrying trends and statistics.
Our Department of Police is confident that the illicit trade of cigarettes appear to have stabilised and starting to show a decline during the period 2013/2014 and 2014/2015, from 31% to 23% drop, respectively.
This reduction is not a coincidence, Ladies and Gentlemen. It is precisely because the regional law enforcement agencies, in the form of the Southern African Regional Police Chiefs Cooperation (SARPCCO), have put a lot of effort and zeal to address this problem.
Not only has SARPCCO regarded the smuggling of cigarettes as a priority crime, but the members states of these organisation, have also gone ahead and held simultaneous cross-border operations, such as Operation Usalama (RSA, Swaziland and Mozambique), and Operation Tugela, a joint operation with Mozambique, Malawi and Lesotho.
South African National Defence Force (SANDF) is also disrupting the activities of “mules” crossing our borders with illicit products. Likewise, the National Prosecuting Authority (NPA’s) Specialised Tax Unit also contributes to the fight through vigorous prosecutions of illicit traders.
Our revenue services are also playing an important role. South African Revenue Service (SARS) continues to recognise the illicit trade as a strategic priority and has committed itself to intensify the efforts.
These increased law enforcement actions and enhanced administrative controls in South Africa and other member-states of SARPCCO, are yielding the desired results, albeit at a painful snail pace.
This means, more needs to be done, as more related problems, challenges, and worrying trends still remain, nationally, regionally and globally.
For instance, experts tell us that, according to global estimates of illicit trade markets, South Africa currently ranks amongst the top 5 countries in the world with the highest incidence of trade in illicit cigarettes, together with Malaysia, Iraq, Brazil and Pakistan.
If this trend is not tackled decisively, we will continue to have the following crisis:
- Organised crime: We are informed that the majority of illicit cigarettes are manufactured here in South Africa, in both approved factories and illegal covert operations. They are illicit because they are not declared to SARS, resulting to money laundering and funding criminal groupings across the globe.
- Financial Impact: The trade in illegal cigarettes erodes legitimate job creation and economic development and undermines the tobacco regulations and other laws such as the Tobacco Products Control Act, No. 83 of 1993 and Customs and Excise Act, No. 91 of 1964. This means, South Africa continues to be deprived of the much needed tax revenue by our Government, in order to subsidise our education system, and other basic human needs such as water, sanitation and electricity. It is said, loss to the fiscus since 2010 can be conservatively estimated at more than R21billion.
- Health Impact: The consumption of illicit cigarettes in society weakens the South African Government’s efforts to reduce the consumption of tobacco products due to the availability of cheap cigarettes of dubious quality. Many of the current illicit cigarette packs lack appropriate health warnings and exceed maximum tar and nicotine levels and non-compliance with Reduced Ignition Propensity Regulations.
The above-mentioned worrying trends do indicate to us that, the illicit trade of cigarettes is very sophisticated, very complex, and very organised in nature of the crime involved.
And, South Africa in particular, is continuing to be at critical risk because it has many points of exposure to the illicit trade.
South Africa is a manufacturing hub, a point of distribution and a nexus point for smuggling into and from our neighbouring countries.
Furthermore, the sophisticated financial systems of our country heighten the success ratio for laundering opportunities of the ill-gotten proceeds from this trade.
This means we must be as sophisticated, and as smart when we begin to tackle this scourge. The first smartest way is to acknowledge and identify illegal cigarette trade as one of top priority crimes that wrecks havoc to the development of our communities.
To this end, we will, with immediate effect, smartly use our membership as Interpol’s Global Executive Committee member, the only African country to hold such a position.
Our Minister of Police, Mr. Nkosinathi Nhleko, has already committed to using this position to promote the interests of the African Continent in the global fight against international organised crime.
Tackling the illicit cigarette trade in the region will form part of this commitment. We regard it as the ideal opportunity for South African Law Enforcement Agencies to input the regional challenges of cross- border smuggling of tobacco products.
The second smartest way to address this challenge is to partner with each other, integrate our efforts, and commit to our coordinated activities to tackling the illicit trade.
It is a fact that neither Government nor the Legal Industry can tackle this problem singularly. Therefore, to synergise our efforts, we need to do the following specifically:
1. Inter-Departmental collaboration: We must enhance the Justice, Crime Prevention and Security (JCPS) ministerial cluster, to ensure proper and monitored cooperation of the South African Police Service (SAPS), National Prosecuting Authority (NPA), Directorate for Priority Crime Investigation (DPCI)/HAWKS, State Security, Home Affairs, Agriculture and South African Revenue Service (SARS).
2. Border Management: The nature of the illicit trade demands better cross border coordination and cooperation. This Conference, represented by so many countries, plays an important role in the forging of closer relationships, sharing of information, and coordination of activities so that cross border smuggling can be properly tackled.
3. Public-Private Partnerships: In this instance, we would like to congratulate Tobacco Institute of Southern Africa (TISA) for establishing and running this annual conference in order to actively facilitate this public/private collaboration.
4. Effective Law Enforcement: We need more resources to conclude and prosecute existing investigations. We must certainly improve on the pace at which enforcement efforts move from investigation to arrests and subsequent prosecution.
In conclusion, distinguished delegates and special guests, I would like to reiterate that an integrated approach to address illicit trade of cigarettes is required.
We do need to have a joint working groups where all role players are represented, each bringing their unique skills, knowledge, capacity and resources to bear on this problem.
And, as the Ministry of Police, and as the South African Government, we will continue to make a special effort to ensure that this is happening.
I wish you well in your deliberations.
I thank you all.
