A number of government departments, and law enforcement and prosecution agencies are piloting an initiative which they say will 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.
The announcement was made this week in a statement jointly issued by the director of the Financial Intelligence Centre, Xolisile Khanyile; the head of the Directorate for Priority Crime Investigation and the chairperson of Anti-Corruption Task Team (ACTT), General Godfrey Lebeya; the national director of Public Prosecutions, Shamila Batohi; and the commissioner of the South African Revenue Service (Sars), Edward Kieswetter.
They said the joint venture, which was operating under the auspices of the ACTT, would better enable South Africa to confiscate criminal proceeds, in line with the Financial Action Task Force’s recommendation in this regard.
The participating agencies have entered into a memorandum of agreement to formalise their collaboration and the implementation of the initiative in the cases to be selected, and to regulate the confidentiality of information shared among the agencies.
The agencies will use existing asset recovery legislation to secure court orders to confiscate unexplained wealth.
“The provision in our existing asset recovery legislation that targets unexplained wealth is a legislative tool that requires the state to prove that a defendant’s legitimate sources of income are not sufficient to justify assets that the defendant owns. This puts the onus 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 statement said.
Unexplained wealth orders used elsewhere
It said the UK, Australia, Ireland, Mauritius and Kenya were examples of countries that have adopted the concept of unexplained wealth orders (UWOs) as legislative tools and have successfully recovered such assets.
The aims of the inter-agency initiative were:
- To strengthen and supplement the use of existing legal frameworks to preserve and forfeit assets by targeting unexplained wealth;
- To determine whether existing legislation can be used effectively or whether it should be augmented with standalone UWO legislation; and
- To test how inter-agency co-operation can be operationally achieved to expand the limits of the current legislation by creating case law through court proceedings.
The initiative was started in November 2020 to test the feasibility of a UWO asset recovery regime in South Africa under chapter 6 of the Prevention of Organised Crime Act and through inter-agency collaboration.
A project steering committee has been established, and a task team was set up to conduct research and benchmarking and make recommendations on a way forward.
Preparatory activities for the next phase were in progress to select an appropriate case to test in the courts the existing provisions that target unexplained wealth, the statement said.
