Tobacco information workshops & Disposal of seized goods

Transcription

1 Tobacco information workshops & Disposal of seized goods ANTI-ILLICT TRADE CONFERENCE (10 NOVEMBER 2015) Francois Greyling Independent Consultant to TISA

2 TOPICS Southern African Customs Union - Enforcement factors Southern Africa production region & product flow Enforcement challenges Workshop dynamics LEA actions & Prosecutions Seizures Destructions

3 Southern African Customs Union Botswana Lesotho Namibia Swaziland & South Africa Source: SAM AIT Intel ENFORCEMENT FACTORS: One excise system 5 sovereign states & 5 revenue collection agencies Five different versions of Customs & Excise legislation (similar underlying text) Different versions of Intellectual Property Protection platforms Counterfeit Goods Act South Africa Merchandise Marks legislation / Industrial Property Orders Different versions and levels of Tobacco Products Control legislation South Africa Namibia Botswana Different Law Enforcement Agencies (LEA) with overlapping powers and different levels of enforcement Vast land and sea borders to control

4 SOUTHERN AFRICA PRODUCTION REGION & PRODUCT FLOW Angola Zambia Zimbabwe Transit supply channelling Direct supply channelling Manufacturing capability Special Economic Zone

5 ENFORCEMENT CHALLENGES SOUTH AFRICA S ILLICIT THREAT: More than 60% of the suspect illicit product is locally manufactured and is visually compliant There is a perception that visual compliant product cannot be illicit Manipulation of the current excise control mechanism (integrity) No legal requirement to transport goods with applicable transaction papers No track and trace system required by law Duplication and falsification of tax invoices Sale of products below the applicable tax incidence (minimum tax at risk R14.16) Very little control over imports of unmanufactured tobacco

6 TOBACCO INFORMATION WORKSHOPS ENFORCEMENT SUPPORT: LEA engagement to offer tobacco information workshops RSA & BLNS South African Police Service, South African Revenue Service, South African National Defense Force & other (RSA) Customization of material according to country criteria, audiences and time allocations Regional/Cluster, Stations/Offices, Ports of Entry Product identification & legislative compliance criteria (RSA) Customs and Excise Act Tobacco Products Control Act Counterfeit Goods Act Agricultural legislation National Prosecuting Authority & Asset Forfeiture Unit Successful prosecution Money Laundering INFORMATION SESSIONS FACILITATED: Period Period Attendance

7 TOBACCO INFORMATION SESSIONS DISCUSSION TOPICS: TISA s identity and goals Defining the problem Legislative application - Acts and Regulations Remedial considerations & actions Product differentiation - Unmanufactured and Manufactured Documentation Methods of smuggling

8 LEA ACTIONS & PROSECUTIONS Better knowledge lead to a higher level of awareness Effective LEA initiatives lead to an increase in seizures Cross border interaction Multi-agency involvement Structured operations allowed for the apprehension of more suspects Specialized prosecutions resulted in a higher rate of matters being successfully concluded More stringent sentences Higher deterrent value

9 SEIZURES Increased volumes could not be accommodated by existing storage facilities The auctioning off of seized tobacco was no longer a feasible solution Goods were not stored in ideal conditions Contamination and product liability risks Threat of negative implications on future taxation compliance Risk of legitimate market destabilization The historical burning of seized tobacco products was not an option based on environmental considerations Cost effective and environmental responsible methods had to be sought TISA developed such a capacity Offered destruction assistance

10 Destructions Machines Customized for cigarette destructions Mobile units for easy deployment Light delivery vehicles with a 2.5 liter engine capacity can transport it Powered by diesel engines - easy to maintain Ability to process 50,000 whole display cartons per day Team: 1 x machine operator & 8 x labourers Realistic destruction rate is 32,500 display cartons per day (logistics) TISA has 8 big machines strategically deployed and 1 smaller version

11 Destructions in progress & destruction residue

12 Display cartons destruction residue Agriculture land rehabilitation creation of an artificial water table

13 Display cartons destruction residue Manufacturing soil mixture brick manufacture

14 TOBACCO DESTRUCTION - FIGURES SOUTH AFRICAN CUSTOMS Period Disposal category Cigarettes (sticks) ,949, ,725, ,275, ,422, ,673, ,529,520 Total 1,176,045,972 Master case equivalent 117,605 SOUTH AFRICAN CUSTOMS TOBACCO Period Disposal category Tobacco (kg) , , , , Total 708,220 Master case equivalent 35,411 SACU CUSTOMS (EXCLUDING RSA) Period ( ) Disposal category Cigarettes (sticks) Botswana 144,115,000 Lesotho 4,500,000 Namibia 22,625,200 Total 171,240,200 Master case equivalent 17,124 SOUTH AFRICAN POLICE SERVICE - NORTHWEST Period Disposal category Cigarettes (sticks) ,621, ,035,000 Total 39,656,830 Master case equivalent 3,966 COMBINED SACU / SARS / SAPS Period Disposal category Cigarettes (sticks) ,400,472,522 Master case equivalent 140,047 Master case equivalent 175,458

15 Dr. John C. Maxwell People working together ultimately succeed or fail, based on their commitment to one another. Thank you