Yusuf Abramjee on the fight against SA’s criminal kingpins…

The year ended badly for Julius Malema funder – and alleged cigarette smuggling kingpin – Adriano Mazzotti. His Carnilinx was among a group of tobacco manufacturers that failed in their urgent bid to interdict SARS against installing CCTV cameras at their warehouses. In his reaction, Tax Justice South Africa’s Yusuf Abramjee calls on the Fair Trade Independent Tobacco Association (FITA) to come clean on what they have to hide. He also speaks to BizNews about the modus operandi of the big crime syndicates; some of their tax avoidance tricks; the lack of law enforcement against the crime lords; the lifestyle of the kingpins; and Dubai as a hub of criminal operations – and a destination of choice for fugitives from the law. – Chris Steyn

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Relevant timestamps from the interview

00:00 – Introductions
00:23 – Latest failed legal attempt
03:19 – Percentage of cigarettes illicitly sold in SA
05:07 – Who will be most affected by the cameras?
07:01 – How are the cigarettes smuggled?
12:26 – Cigarette barons are likely to lose billions as a result
13:39 – South African fugitives and Dubai

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Highlights from the interview

___STEADY_PAYWALL___

The failed urgent application to stop SARS installing CCTV surveillance in cigarette warehouses:
“…SARS took a decision about two or three years ago to install closed-circuit television cameras in all cigarette factories and warehouses in South Africa…we at Tax Justice welcomed it and we are delighted that multinational British-American Tobacco together with the controversial Gold Leaf Tobacco…decided some time ago to install closed circuit television cameras in the factories. However, FITA (The Fair Trade Independent Tobacco Association) that represents some 80% of the so-called cheaply manufacturing brands, including Carnilinx, Mazotti’s company, they decided that they’re taking it on review. That review application is still pending.

“But in the meantime, they went to the Gauteng North High Court in an urgent application, in an attempt to force the courts to make sure that they don’t have to be compelled to install these cameras… the Gauteng North High Court issued a ruling that rejected the application, saying there was no urgency. And now we’re back at square one. And that is why we welcome the court’s decision.”

Calling on FITA to come clean:
“What do they have to hide? Why are they scared to install cameras in their factories?

“Now, FITA is using the argument of privacy laws and using legal jargon. And there’s absolutely no time to waste on this rubbish. I’m saying that if countries like the SADC (Southern African Development Community) countries, even India, which is the world’s largest democracy, Mauritius, can have these cameras in their factories, why is South Africa the exception? And for them to use the argument that only undemocratic countries like China have these cameras is absolutely hog wash, and we reject it outright.

“…we know we know the culprits are…It’s no secret that FITA represents a number of the so-called cheapie brands. Carnilinx is one of the companies and they were also part of the core challenge.”

The multi-billion rand illicit cigarette market:
“We estimate as much as 70 to 80 percent (of cigarettes sold in South Africa is illicit).

“We estimate that between 27 and 30 billion rand a year gets lost (to the economy).”

Lack of law enforcement against illicit trade kingpins:
“We’ve seen the runners being arrested. But why are the king pins not behind bars? Why are the factories where these cigarettes are coming out from not being closed? Why are the licenses not being revoked?

“Al Jazeera had a worldwide exposé on the illicit trade, the gold smuggling, the money laundering. There were whistleblowers that came forward. President Cyril Ramaphosa got up in Parliament in response to a question promising that action will be taken, investigations are underway. Some banks were even implicated…All they did was to suspend those officials. We are asking months later, why are those people implicated not being arrested? What’s happened to the keepers involved in the illicit trade, whether it’s gold or tobacco?”

The modus operandi of the cross-border cigarette smuggling syndicates:
“Well, we know that the RG brand specifically, manufactured in Zimbabwe, has been smuggled for the past few years. We have truckloads coming…They come across the border. They carry them in boxes, in bags….Sometimes they declare them with different goods and they come to the border post…(there are) even allegations that they’re bribing customs officials and policemen…some time ago, we exposed the fact that some of these trucks were even exported by marked police vehicles from the border right into Gauteng. There were some names mentioned. We gave the information to the police and up to now no arrests have been made. So those allegations are very, very clear. They’re on record. We know there’s allegations that approximately 100,000 rand, if not more, is paid to export a load from the Zimbabwe border post right into Gauteng, because that load is worth about 15, 20 million rand.”

Hidden factories and warehouses:
“There’s also allegations of hidden factories and hidden warehouses, and that is why we are pleading to anyone with information about these hidden factories and warehouses to come forward and to pass on the information – even anonymously – so that we can get to these culprits and make sure that they are arrested.”

Other ways in which tax is avoided:
“Underreporting is a problem. The so-called export fraud, when they claim they’re exporting the goods out of South Africa, it never happens. There’s invoices, there’s fake custom stamps and SARS stamps that go on. We know they don’t pay their full taxes. We know that at one stage, SARS got a curator to take over one major cigarette company because they had to freeze their assets because they were outstanding debts running into allegedly billions of rands. And it’s a real problem.

“These criminals use every trick in the book…They are stealing from the system.”

The lifestyle of the kingpins:
“We know allegations of some of them linked to politicians. We know allegations of them getting protection. We know some of them allegedly working with corrupt cops. The lawlessness just continues.

“The gold mafia exposé showed how billions of rands were being laundered out of South Africa through our banks, believe it or not, by manipulating the system. That meant money ended up in Dubai. One alleged money launderer, the kingpin, fled South Africa just before the exposé, and is now living a life of luxury in Dubai.

“Those people should be extradited and brought back to South Africa. We know one particular businessman from Zimbabwe, his name came up repeatedly in the Al Jazeera exposé. Why is he not being arrested and charged? We know investigations, by the way, take a very long time, but clearly years and years and years; and this information was lying right at the doorstep of the various law enforcement officials, and they did very little, it does raise a lot of questions and concerns as well.”

Dubai as a haven for criminals from SA:
“We know during some of the kidnappings of business people in South Africa, you are forced to pay the money through the Hawala system in Dubai. And that is where the criminals were collecting the cash. That system in Dubai we know is hopelessly useless and criminals are getting away with it. And even the Dubai authorities fail to act. So Dubai is seen as a haven.

“During the gold mafia expose again, you saw how bags of gold was being taken, their footage from Zimbabwe right into Dubai on the plane on Emirates in first class. And no questions are being asked. And so what does it tell you? It tells you that the system is rotten. It tells you that the systems are not in place to control the illicit trade and the movement of cash and other illicit products and it is a growing problem.”

Hopes that 2024 will see action:
“…I think the time has now come…after all the years of talking and talking. This year 2024, we hope, will be a year of action. The illicit trade is stealing from the poor. It’s stealing from people that need schools, health facilities, education, basic services that we don’t have.

“And we know billions of rands get lost annually. And as much as SARS is trying, and they’re trying to bring an end to the illicit trade, we believe in this last lap they now need to go the extra mile and make sure that they act. And I think SARS must show their muscle.”