South Africa: Combating Economic Crime — The World is Watching
| Pages | 408-414 |
| Date | 01 February 1996 |
| DOI | https://doi.org/10.1108/eb025748 |
| Published date | 01 February 1996 |
| Author | Franso van Zyl |
| Subject Matter | Accounting & finance |
South Africa: Combating Economic Crime — The
World is Watching
Dr Franso van Zyl
Journal of Financial Crime — Vol. 3 No. 4 — International
For post-election South Africa, much is coming its
way, both good and bad.
The arrival of free markets, the relaxing of trade
barriers and the development of a more open
economy are welcomed with open arms. There is
no doubt that the initial, and usually long-term
benefits, arc unrivalled for creating wealth and
happiness among the population. But, as with all
things, there are less savoury aspects that inevitably
follow, that can best be summarised as 'the out-
pouring of greed'.
In the wake of the honest, entrepreneurial spirit
comes corruption, dishonesty, crime syndicates,
international drug rings, industrial espionage,
embezzlement and bribery, to name just a few.
One should not be lulled into a false sense of
security by believing that only prominent business-
men and tourists will flock to South Africa now
that sanctious have been lifted.
Economic crime has become a big and lucrative
business in South Africa. Not a day goes by with-
out reports of corruption, bribery, fraud, company
mismanagement or foreign exchange contraven-
tions.
The Director of the Office for Serious Eco-
nomic Offences quoted figures of more than
R16,000m in 1995 relating to more than 22,700
suspected cases of economic crime being investi-
gated at the end of January 1995 by his Office and
the Commercial Branch of the South African
Police Services.
The vast majority of economic crime is not even
reported, which makes the staggering values
attached to reported crime even more alarming.
The responsibility for combating economic crime
lies with the public, business sector and various
regulatory and prosecuting authorities. Many
people believe mistakenly that laws will cure evil.
Persons licensed for instance in terms of some law
to do business, are considered as credible,
endorsed by Government since they have a licence.
The public believes that somebody is taking
responsibility for them and that they do not need
to guard against harm. Government (Big Brother)
has put legislation in place to protect them. This is
a false sense of security which can be very danger-
ous.
No guarantee against fraud exists. However
good a system of regulation is set up, some fraud
will get through, because that is the nature of
fraud. It is committed by people whose purpose it
is to beat the system. The public should be alert in
the detection and reporting of suspected cases of
fraud or other incidences of commercial crime.
The business sector should shoulder much of
the blame for the proportions economic crime is
taking. Business ethics and economic morality
have probably reached their lowest ebb in South
Africa's commercial history. The regulatory
authorities (Financial Services Board, Registrar of
Banks, Registrar of Companies, Business Practices
Committee, Securities Regulation Panel etc) and
prosecuting authorities (Police, Attorney-General's
Office, Office for Serious Economic Offences etc)
are ill-equipped to deal with commercial crime.
The procedures and powers at their disposal are
lengthy, costly and cumbersome. The resources
available to prevent and prosecute economic crime
successfully do not meet the increasing sophistica-
tion of the methods employed by the perpetrators
REASONS FOR RISE IN ECONOMIC
CRIME
Economic crime might be motivated by the need
to provide a nest egg for those wishing to leave the
country. Others may use economic crime to pro-
vide capital to enable a bigger penetration into the
South African economy. Whatever the reason, an
unsurpassed opportunity to commit crime exists.
The following may have contributed thereto.
Political and economic climate
With the uncertainty and upheaval associated with
the change of government, white collar crime is
likely to increase. In South Africa, the process of
transition to a new political dispensation has been
marked by an alarming decline in ethical standards.
An unstable political climate and social unrest have
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