Sars teams up with law enforcement to combat illicit fuel trade

Image credit: Dawn McDonald on Unsplash

In the past four months, the National Joint Operational and Intelligence Structure (Natjoints) has carried out several interventions.

A joint intelligence team, comprising Sars and South African Police Service (Saps) officials, has identified 23 targets across Gauteng, Mpumalanga and KwaZulu-Natal.
In addition, 13 criminal cases were registered with Saps, supported by Sars trade investigators, for customs and excise contraventions, and fraud.

“The intelligence-driven joint enforcement interventions included search-and-seizure operations targeting certain fuel storage facilities and depots, as well as random sampling of tanker transport to test the fuel viscosity and composition. In some cases, adulterated diesel – analysed in these investigations – had up to 68% paraffin content,” Sars said.

Over the past decade, countries along the Maputo Corridor (South Africa, Eswatini and Mozambique) have become primary targets of the illicit fuel trade, which is driven by organised criminal networks that smuggle and illegally adulterate fuel.

Sars has established that some importers declare fuel amounting to 40,000 litres or less, whereas investigations reveal that up to 60,000 litres of fuel are imported.

“This is called under-declaration and documents are falsified to perpetuate this fraudulent activity. Sars has also detected a national trend, where many of the fuel-storage and distribution depots are involved in the adulteration of all fuel products, especially through illegal mixing of diesel with paraffin.

“Fuel adulteration costs the fiscus approximately R3.6bn per year, according to statistics by the International Trade Administration Commission,” Sars said.
Faced with such carefully planned criminality, government agencies are working together more closely to detect, prevent and combat fuel adulteration, and enforce the Customs and Excise Act.

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Sars noted that the illicit economy is a global phenomenon that threatens South Africa’s society, economy, and national security.

“Tax evasion, smuggling, illegal transactions, illicit manufacturing and fraud undermine the rule of law, erode public trust, distort markets, deprive governments of revenue, and enable corruption and organised crime.

“The pervasiveness of these illicit activities in our country demands that all enforcement agencies work jointly to curb their harmful practices. The illicit economy is complex and requires a whole-of-government response among public entities, the private sector, civil society, and international partners,” Sars said.

Sars commissioner Edward Kieswetter expressed his appreciation to the Sars and Saps teams and other government departments for their untiring efforts to detect, combat and prevent the scourge of the illicit economy.

“The criminal syndicates engaged in these brazen acts have become emboldened to act callously, with no restraint, in pursuit of their rapacious and criminal gains.
“These syndicates can only underestimate our resolve to eradicate this criminality at their peril. These acts threaten the very foundation of our society. Our message is clear: we will spare no efforts to crush them,” the commissioner said.

Kieswetter said State agencies will collaborate and work within the law to confront illicit trade.

The joint intelligence team also found the following:

• 953,515 litres of contaminated diesel fuel.
  
• Six fuel depots that were in contravention of Sec. 37 of the Customs and Excise Act 91 of 1964, as amended.
  
• Assets and contaminated fuel to the value of R367,274,330, leading to further investigation, and criminal and civil liabilities.
  
• Two so-called fuel ‘washrooms’, one of which is a rare mobile ‘washroom’ fitted on a transport truck, used to remove paraffin markers.
  
• Twelve fuel transport trucks, which were identified after a suspected false declaration on importation of an average of 15,000 litres of fuel per tanker.