THE INTERNATIONAL INVESTIGATIONS REVIEW
South Africa is a signatory to the most significant global conventions against corruption and cross-border crime and has enacted a comprehensive domestic legislative framework specifically to give effect to those conventions and generally to facilitate the investigation and prosecution of unlawful conduct.
The following significant Acts form part of the domestic criminal legislative framework: a The Prevention and Combating of Corrupt Activities Act (‘PACCA’) provides measures to combat corruption and corrupt activities in both the private and public sphere. The Act creates a general offence of corruption as well as numerous specific corruption offences. The Act also contains important provisions concerning reporting obligations, extraterritorial jurisdiction and applicable penalties.
The Prevention of Organised Crime Act (‘POCA’) introduces measures to combat organised crime, money laundering and criminal gang activities, and in addition provides mechanisms for the recovery of the proceeds of crime as well as assets used in the commission of crimes.
The Financial Intelligence Centre Act (‘FICA’) creates an important obligation on persons to report suspicious and unusual transactions, and imposes extensive ‘know your client’ requirements on ‘accountable institutions’ as defined in the Act and obliges those accountable institutions to keep records of, inter alia, (1) the identity of the client, (2) the nature of the transaction, (3) the parties to the transaction and (4) the amounts involved.
There are a number of agencies or institutions in South Africa whose mandate includes the investigation of unlawful corporate conduct. The South African police have specialised units, most notably the Directorate of Priority Crime Investigation (known colloquially as ‘the Hawks’), and the commercial crimes unit, which focuses on the investigation of more complicated white-collar crime offences. The police work closely with the National Prosecuting Authority, which is the body empowered to institute and prosecute criminal proceedings on behalf of the state.
One of the significant units established within the National Prosecuting Authority is the Asset Forfeiture Unit, which is empowered by Chapters 5 and 6 of POCA to affect the seizure and forfeiture of the proceeds of crime and assets used in the commission of crimes.
Investigations into unlawful corporate conduct are also carried out by the Competition Commission. The Competition Commission is constituted in terms of the Competition Act and is the statutory body empowered to investigate restrictive business practices, abuse of dominant positions and mergers. The Competition Commission has the power to raid premises and search for and remove information (‘dawn raids’) where it has a reasonable belief that an enterprise or individual within an enterprise has contravened the Competition Act. Dawn raids may be conducted pursuant to a warrant or, in limited circumstances, without a warrant.
Where public entities are involved or are a party to a transaction, a number of other agencies or institutions may also be involved in investigating unlawful conduct. The Special Investigations Unit investigates, inter alia, (1) unlawful, irregular or unapproved acquisitive acts, transactions, measures or practices that have a bearing on state property, (2) the intentional or negligent loss of public money or property and (3) corruption in connection with the affairs of any state institution. The Public Protector is a separate body that investigates any conduct in state affairs, or in the public administration in any sphere of government that is alleged or suspected to be improper or to have resulted in impropriety or prejudice.
In addition, FICA created the Financial Intelligence Centre with the primary objectives of assisting in the identification of the proceeds of unlawful activities and combating money-laundering activities and the financing of terrorist and related activities. Among its further objectives are the provision of high-quality, timely financial intelligence for use in the fight against crime and the exchange of information with similar bodies in other countries.
Investigations into criminal corporate conduct are not normally dependent on the cooperation of the implicated enterprise and are most often conducted – at least initially – without the knowledge of the implicated enterprise. The collection of evidence is not normally cooperation-based and is almost invariably obtained by authorities through the issue of warrants under the Criminal Procedure Act. Close cooperation with police investigations are more common where the enterprise is a victim of crime, or crimes have been committed by individual members, directors or employees within the enterprise.
While there is no general obligation on an enterprise to cooperate in a criminal investigation, there are the usual safeguards preventing the obstruction of an investigation, tampering with or destruction of evidence, and interference with witnesses.
The common law crime of fraud remains an important basis for the criminal prosecution of individuals and incorporated entities making themselves guilty of white-collar crime.