National Treasury acting director general Ismail Momoniat. Picture: MARTIN RHODES
“SA has a relatively high volume and intensity of crime and more than half of reported crimes fall into categories that generate proceeds. The main domestic proceeds-generating predicate crimes are tax crimes, corruption and bribery, fraud, then trafficking in illicit drugs, and environmental type crimes.”
Like any other country SA allows for the legal creation of varied corporate entities such as companies, trusts and nonprofit organisations, which can then trade, set up other entities, employ people and bid for contracts. There are several advantages: beneficial tax arrangements, less risk exposure for the owner, or an entity that can exist beyond the lifetime of its creator. The entity exists in its own name, can open bank accounts, deal with assets and enter into contracts.
Corruption Watch also demonstrated how trusts, companies and arrangements were abused by the beneficiaries of state capture. For example, it is alleged that Salim Essa used Regiments Capital and, out the back door to entities associated with the Guptas. When Trillian was red-flagged, Essa is said to have quickly found a new vehicle for moving money in the form of Nkonki Inc.
A few weeks ago parliament’s standing committee on finance asked for and received public comment on the bill. Corruption Watch could draw on its earlier work to swiftly make. But many NGOs and interest groups were not similarly placed and voiced their concern about the unusually short timeframe, prompting parliament to extend the deadline to October 25.
Effective sanctions and measures to ensure compliance are possibly not effective — a mere administrative fine will have no effect if it is cheaper to pay the fine than to incur costs to comply; and