SARS disrupts illicit fuel trade with operations across three provinces

The South African Revenue Service (SARS) is collaborating with law enforcement agencies to combat the illicit fuel trade, a crime that costs the fiscus billions annually.

Over the past four months, the National Joint Operational and Intelligence Structure (Natjoints) has implemented several key interventions to disrupt illegal fuel trade operations.

A joint intelligence team made up of SARS and SAPS officials identified 23 targets across Gauteng, Mpumalanga and KwaZulu-Natal.

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In addition, 13 criminal cases were registered with the SAPS, supported by SARS trade investigators, for violations of customs and excise laws and fraud.

“The intelligence-driven joint enforcement operations included search-and-seizure actions at selected fuel storage facilities and depots, along with random sampling of tanker transports to test fuel viscosity and composition,” SARS stated.

“In some instances, diesel analysed during the investigations contained up to 68% paraffin.”

Over the past decade, the Maputo Corridor, spanning SA, Eswatini and Mozambique, has become a hotspot for the illicit fuel trade, driven by organised networks that smuggle and illegally adulterate fuel.

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SARS found that some importers declare fuel quantities of 40 000l or less, while investigations show they actually import up to 60 000l.

“This practice is known as under-declaration and falsified documents are used to conceal this fraudulent activity,” SARS explained.

“SARS has also identified a national trend of fuel-storage and distribution depots adulterating fuel products, particularly by illegally mixing diesel with paraffin.”

According to the International Trade Administration Commission, fuel adulteration alone costs the fiscus about R3.6b annually.

Faced with this well-planned criminality, government agencies are collaborating closely to detect, prevent and combat fuel adulteration while enforcing the Customs and Excise Act.

SARS noted that the illicit economy is a global threat that endangers SA’s society, economy and national security.

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“Tax evasion, smuggling, illegal transactions, illicit manufacturing and fraud undermine the rule of law, erode public trust, distort markets, drain government revenue and fuel corruption and organised crime,” SARS said.

“The widespread nature of these illicit activities demands that all enforcement agencies work together to curb their harmful impact.

“The illicit economy is complex and demands a whole-of-government response, involving public entities, the private sector, civil society and international partners.”

SARS commissioner Edward Kieswetter thanked the SARS and SAPS teams and other government departments for their efforts to detect and prevent the scourge of the illicit economy.

“The criminal syndicates behind these brazen acts have grown emboldened to act with callous disregard and no restraint in pursuit of their rapacious criminal gains,” the commissioner stated.

“These syndicates 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 effort to crush them.”

Kieswetter affirmed that State agencies would collaborate and operate within the law to confront illicit trade.
Among the joint intelligence team’s findings:

• Some 953 515l of contaminated diesel fuel;

• Six fuel depots in contravention of Section 37 of the Customs and Excise Act 91 of 1964, as amended;

• Assets and contaminated fuel valued at R367 274 330, leading to further investigation and criminal and civil liabilities;

• Two so-called fuel “washrooms”, one a rare mobile “washroom” fitted on a transport truck, used to remove paraffin markers;

• Twelve fuel transport trucks were identified after a suspected false declaration on importation of an average of 15 000l fuel per tanker.