On 24 February 2023, the South African Revenue Service (SARS) announced that cooperation and collaboration between it, the South African Police Service (SAPS) Directorate of Priority Crimes (DPCI) known as the Hawks had been bolstered with the signing of a new Memorandum of Understanding (MOU) that promotes the exchange of information, joint initiatives and more effective operational arrangements in line with Financial Action Task Force (FATF) requirements.
The historic MOU was signed in January by the SAPS National Commissioner General, the Lieutenant General of the National Head of the DPCI, and the SARS Commissioner.
This important accord, which comes into effect immediately, boosts the ability of the country’s law enforcement agencies to enhance the combatting of corruption, tax evasion, money laundering and other financial crimes, and further strengthens the national financial intelligence system. It underlines the commitment by the heads of these agencies, amongst others, to build and strengthen institutional trust at the Organisation for Economic Co-operation and Development (OECD) workshop on Tax Crime and Inter-Agency Co-operation held in Pretoria in July 2022.
The MOU regulates, strengthens and formalises matters of mutual cooperation, assistance and exchange of information between the three parties, in the fulfilment of their concomitant legislative responsibilities and obligations as prescribed by the SARS Act, the SAPS Act or other legislation, in particular, Section 17F of the SAPS Act, Section 36 of the Financial Intelligence Centre (FIC) Act, Section 73 of Prevention of Organised Crime (POCA) Act and Section 34 of the Prevention and Combatting of Corrupt Activities (PRECCA) Act.
The MOU provides for:
- The reporting of criminal complaints regarding the commission of tax, customs and corruption-related offences to ensure effective and efficient investigation and prosecution;
- Mutual cooperation and the sharing of information in respect of offences that fall within the legislative mandates of the parties, as envisaged by Section 73 of POCA, in order to avoid duplication of activities and ensure optimal utilisation of resources,
- Disclosure of information and records in respect of accountable institutions (such as banks, financial and legal firms, insurance companies and casinos), as prescribed by Section 36 of the FIC Act, who:
o have received or are about to receive the proceeds of unlawful activities;
o are used or may be used in future for money laundering purposes; or
o are party to a suspicious and/or unusual transaction or series of transactions as contemplated in Section 29(1)(b) read with Section 268 of FIC Act,
- Access to information held by SARS in respect of offences other than tax, customs or corruption as permitted by law, and
- The secondment of personnel to achieve a multidisciplinary approach to address national priority crimes as envisaged by Section 17F of the SAPS Act.
- SARS’s obligation as prescribed in Section 34 of PRECCA to report to the SAPS any knowledge and/or suspicion of corruption, theft, fraud, extortion, forgery or uttering of a forged document, involving an amount of R100 000 or more perpetrated in or against SARS.
The parties are committed to enhancing knowledge, skills and an understanding of the functions of the respective parties through initiatives designed to share expertise and skills in common areas. Envisaged areas of cooperation in respect of best investigative practice include, amongst others, the following:
- Forensic methods and techniques in investigating financials.
- Development and enhancement of forensic analysis.
- Financial investigation and analysis of information to determine the financial aspects of a crime.
- Investigative methodologies in combatting crimes within the mandates of the parties.
- Modern law enforcement techniques and the collection of evidence and related matters.
To maintain confidentiality and to operationalise the provisions of the MOU, and to ensure that the unique requirements and mandates of specific investigative capacities in the SAPS/DPCI and SARS are addressed, separate Operational Framework Agreements, which will form part of the MOU, will be put in place.
The parties have also agreed to establish a Working Committee to discuss matters of policy, investigation and prosecution of tax, customs and/or corruption-related offences, provision of information, newly enacted legislation, evidentiary requirements, methods to enhance the transfer of knowledge and skills, unresolved disputes escalated to it, and any other matters related to the implementation and execution of the MOU.
