SA losing billions to illegal tobacco and alcohol trade
According to the South Africa Illicit Economy 2.0 Report, South Africa's economy continues to be threatened by illegal trade, specifically in sectors such as alcohol, tobacco, food items, pharmaceuticals, agri-chemicals, counterfeiting, mining, and wildlife trafficking.
Image: Pixabay
This is according to the South Africa Illicit Economy 2.0 Report, launched by the Transnational Alliance to Combat Illicit Trade (TRACIT) in conjunction with Business Unity South Africa.
'Illicit trade continues to pose a serious threat to South Africa's economic stability, governance, and international standing,' the report said. This comes at a time when the country is endeavouring to get itself removed from the Greylist of undesirable investment destinations.
South Africa was grey listed by the Financial Action Task Force (FATF) in February 2023 for not complying with international standards that relate to money laundering and addressing illicit financial flows.
In February, National Treasury said the country had, or mostly, resolved 20 out of the 22 items flagged by the FATF as requiring action. The two remaining items are expected to be addressed in the reporting period from March to June this year, it said.
South Africa intends to address both outstanding action items by June 2025 to enable an exit from grey listing by October 2025.
Among the aspects that still need to be resolved is demonstrating a 'sustained increase in investigations and prosecutions of serious and complex money laundering, in particular involving professional money laundering networks/enablers and third-party money launderers in line with its risk profile'.
TRACIT's report stated, 'South Africa's continued placement on the FATF grey list underscores persistent shortcomings in anti-money laundering and counter-terrorism financing frameworks'.
It noted that there are systemic gaps in oversight, regulation, and inter-agency coordination in areas such as supply chain intermediaries, criminal enablers, and illicit trade.
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