The government is piloting a project targeting people or entities with “unexplained wealth”. The National Prosecuting Authority, Directorate of Priority Crime Investigation, Department of Justice and the South African Revenue Service (SARS), led by the Financial Intelligence Centre and operating under the auspices of the Anti-Corruption Task Team, are collaborating on the project, which aims to facilitate the investigation and recovery of assets acquired through unlawful activities such as corruption, fraud, tax evasion and money laundering.
According to a recent statement by SARS, the agencies will use existing asset-recovery legislation to secure court orders to confiscate unexplained wealth. This puts the onus on the defendant to prove that the source of the funds for the assets owned is legitimate and that the assets were not acquired from the proceeds of criminal activities.
A court can make an order to confiscate unexplained wealth on the basis that the wealth of a person or entity is disproportionate to the lawful income derived or declared by that person or entity and that the defendant is unable to justify or explain how the wealth was lawfully acquired.
This approach will enable law enforcement agencies and SARS to act even in cases where such unlawful activity cannot be proven beyond reasonable doubt.
Internationally, the UK, Australia, Ireland, Mauritius and Kenya are examples of countries that have adopted the concept of “unexplained wealth orders” (UWOs) as legislative tools.
PERSONAL FINANCE