Cape Town Customs rakes in the illegal pickings

10 Dec 1999 - by Staff reporter

Ray Smuts

THE CAPE Town Customs Prevention Unit is making significant headway in its fight against fraud.
Working in close collaboration with the National Special Investigations Unit, Customs recently seized six containers from mainland China manifested as containing ceiling fans and glassware.
On inspection they were found to contain new clothing including suspected counterfeit goods estimated at R12-million.
A follow-up operation yielded a further two containers with counterfeit goods valued at R3-million and a third was later unearthed, making this the biggest single haul yet. A Chinese national, resident in South Africa, is to appear in court shortly.
Another recent success relates to a R1,7 million shipment manifested as cotton fabric rather than the actual content, second hand clothing, for which an import permit is required.
Of all commodities, illegally imported clothing and textiles remain one of the biggest headaches, which is why customs launched a full scale national scrutiny in August aimed at compliance and the protection of jobs in an already sensitive industry.

Mobile task force

As part of the shift in customs transformation, certain Cape Town customs members as well as colleagues throughout the country have been trained into a mobile task force by members of Her Majesty's British Customs department.
Others were assisted by US Customs and the World Customs Organisation in receiving training in anti-smuggling techniques, drug detection, economic fraud and contraband interdiction. Experience gained is now being put to the test by way of selecting and targeting consignments.
Another set of initiatives, referred to as the flavour of the month or flavour of the quarter depending on the extent of investigation required, is in place and an oil company is currently the subject of the latter exercise, comprising a large systems audit followed up with a compliance audit in which all transactions are physically verified.
Our view, explains Fanie Versfeld, Controller for SA Revenue Services (SARS) branch office for Customs and Excise in the Mother City, is to move into a situation where we create business partnerships, mutual responsibility for policing compliance so that one can do spot checks on an ad hoc basis.

Audit team

A successful Cape Town pilot project due to be introduced at other ports as part of SARS' national strategy is that of a seven-member international trade audit team comprising VAT-qualified, customs-qualified and income tax-qualified personnel.
The team has already undertaken 59 audits involving R11-million owing in customs duties and about R5-million in income tax and uncovered VAT fiddling in the second hand motor trade and VAT irregularities in exports to Lesotho and Namibia.
As part of the shift in customs transformation, high dutiable goods such as electronics and clothing - categories in which illegal wrongdoing is commonplace - are now under the spotlight but Versfeld quite understandably declines to disclose the methods employed.
Other measures in place include a system where a computer at random selects any number of entries - about 1% of all incoming goods - for examination.Customs checking officers also have a set of predetermined targets, up to 4% of all consignments, around 17 400 Cape Town sea and airfreight entries a month - or 20% of all port freight in the country.
Last year Cape Town customs collected R15,4 billion and its prime target - 8,45% of the national revenue target - is R16,4 billion for 1999. Of this amount 66% is for excise and fuel levy and 33% in customs duties.
Looking back at the year that almost was, Versfeld says major investigation successes in Cape Town have included illegal dealings in clothing and textiles totalling about R230-million, together with forfeiture and penalties.
Other successes relate to a R500 000 fine and 25-year prison sentence suspended for frive years on a meat importer for manifuplating the value of a R2,3-million shipment and a R560 000 fine and five year suspended senctence for value manifuplation on compact discs amounting to R560 000, being the underpayment prejudiced to the fiscus.
Versfeld is hopeful that Cape Town will soon become the second port after Durban to have its own scanner. Portnet, to our knowledge, has already approved in principle acquisition of the equipment valued at R20-million.
If people fiddle goods it impacts on Portnet's wharfage so they obviously have a vested interst in the matter. Furthermore, the scanner will bring about major benefits to the importer in terms of time and expense as containers will no longer have to be brought to a depot to be physically unpacked.
We will be able to scan a higher percentage of boxes and this will act as a deterrent and hpefully bring about voluntary compliance.
Versfelf, acutely awared of the poor image Customs officials have in the minds of many, believes they are becoming more customer-friendly but emphasises that we still have a long way to go.

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