Adequacy of law enforcement and prosecution of economic crimes in South Africa

Publication Date08 May 2018
AuthorAndries P. Swanepoel,Jacolize Meiring
SubjectAccounting & Finance,Financial risk/company failure,Financial crime
Adequacy of law enforcement and
prosecution of economic crimes in
South Africa
Andries P. Swanepoel and Jacolize Meiring
Department of Taxation, University of South Africa, Pretoria, South Africa
Purpose Economic crime is a serious challenge to business leaders, government ofcials and private
individuals in South Africa. Given the important role of law enforcement, prosecution and sentencing in
deterring economic crimes, the purpose of this paper is to determine if law enforcement, prosecution and
sentencingpractices are deemed to be adequate in South Africa.
Design/methodology/approach Primary data from Web-basedand manual questionnaires were used
to empirically analyse the perceptions of sentenced economic crimeoffenders and role-players regarding the
statement that law enforcementand prosecution practices of economic crimes relatingto fraud, corruption or
tax evasion in South Africa are not adequate. The nal realised sample included a total of 345 from the
various populations of key role-players and a total of 82 economic crime offenders from a Gauteng-based
correctionalinstitution. MannWhitney U tests were used to testfor signicant differences between the views
of role-playersand economic crime offenders.
Findings The majority of both groupsof respondents is of the opinion that law enforcement, prosecution
and sentencing practices in South Africa are not adequatewith regard to economic crime offences, although
statistically signicant differences exist in the degree of agreement. The challenge is thereforeto prosecute
more economic crime offenders by improving law enforcement, prosecution and sentencing practices. The
study also revealed that people have a reluctance to speak out about fraud, corruption or tax evasion or to
report suchoffences for various reasons.
Originality/value The research assisted in identifying the challenges economic crime presents
and the shortcomings in current law enforcement, prosecution and sentencing practices in South
Keywords South Africa, Law enforcement, Corruption, Prosecution, Fraud, Tax evasion,
Economic crime
Paper type Research paper
1. Introduction
Possible reasons for economic crime have been a topic of debate for quite some time. Altas
(2008, p. 56) believes that some economic crime offenders may choose a life of crime over
conformity to socially acceptable behaviourbecause they have less self-control and do not
fear criminal punishmentand they are typically facing a serious personal problem that
they feel forces them to choose risky behaviour.Altas (2008, p. 56) furthermore contends
that some criminalsare more likely to desist from crime if they believe future earningsfrom
criminal activities will be lowand other attractive but legal income-generating
opportunities are available. The successful prosecution of an economic crime offender
depends on adequate law enforcement and adequate prosecution practices. Effective law
enforcement is paramount for successful prosecution. If an economic crime offence is not
investigated properly, the case may not stand the legal argumentsof the defence in a court
of law and the accused economic crime offender may escape a sentence because of the
Journalof Financial Crime
Vol.25 No. 2, 2018
pp. 450-466
© Emerald Publishing Limited
DOI 10.1108/JFC-12-2016-0081
The current issue and full text archive of this journal is available on Emerald Insight at:
technicalities relatedto a poor investigation coupled with a lack of evidencepresented to the
Snyman (2014, p. 38) indicated that the Constitution of the Republic of South Africa 108
of 1996 in section 35(5) stipulates that every accused person has a right to a fair trial.
Paragraph (l) of this subsection further provides that this right to a fair trial includes the
right not to be convicted for an act or omission that was not an offenceunder either national
or international law at the time it was committed or offended.
The efciency and adequacy of prosecution practices could hinder the effectiveness of
the judicial system. Prosecutors should aim to maintain high levels of moral standards in
any court of law to avoid the temptationof crossing over the allowable ethical limit (Braswel
et al.,2005).
Successful prosecution normally results in the punishment of an offender. OMahony
(1993, p. 214) argues thatthe main purpose of a sentence is that it is:
[...] intended to deter, to reform, to extract retribution, to express the moral values of the public
and to declare the collective will with regard to what will be acceptable and unacceptable types of
Sentencing in essence involves the fundamental issue of measuring individual interests
against societal needs and the ethical issue here is to determine the ideal balance between
the two (Braswel et al., 2005).
Given the important role of law enforcement, prosecution and sentencing in deterring
economic crimes, the objective of this research was to determine if law enforcement,
prosecution and sentencing practicesare deemed to be adequate in South Africa. Economic
crime is a serious challengeto business leaders, government ofcialsand private individuals
in South Africa. According to the PWC biennial Global Crime Survey, South African
organisations reported a considerably higher frequency in the incidence of economic crime
in comparison to their African and globalpeers (PWC, 2016a, p. 1). Economic crime damages
internal processes, erodes the integrity of employees and tarnishes reputation. It is like a
stubborn virus that persists despite ongoing efforts to combat it and the exact direct loss
associated with economic crime is difcult to assess (PWC, 2016b, p. 1). More specically,
this research considered the perceptions of sentenced economic crime offenders and role-
players in the prevention, detection and prosecution of economic crime offences in South
Africa regarding the adequacy of law enforcement and prosecution practices in South
The remainder of thisarticle is structured as follows: section two providesan overview of
recent literature concerning the three concepts relevant to this study, namely, law
enforcement, prosecution and sentencing. This is followed by a section where the research
methodology and data analysis techniques are discussed. Section four provides the
empirical research results, where after the limitations of the study and implications for the
law enforcement industry are elaborated upon. The study then concludes with a summary
of the ndings and provides directionsfor future research.
2. Literature review
The primary function of criminal law and the common law is to publicise the standards of
behaviour and ascribe penaltiesto any deviation from it (Murungu and Biegon, 2011). In this
regard the state hasa duty to punish those who may deviate from this set of rules.An ideal:
[...] direct enforcement system would include not only an adjudicating body, but would be
vertically integrated and a comprehensive international criminal justice system consisting of all
Adequacy of
law enforcement
and prosecution

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