The Asset Forfeiture Unit (AFU) intends recommending the minister of justice closes a loophole used to contest legislation that the AFU uses to assist other countries by freezing proceeds of crime hidden in South Africa.
”In many cases the international cooperation in criminal matters law is fairly ineffective,” said AFU head Willie Hofmeyr on Tuesday.
Hofmeyr said what the legislation envisages is that when someone’s assets are frozen overseas, then foreign authorities merely need to send a copy of their court order to their South African counterparts, who in turn can approach the High Court to register the order.
”This would mean that it’s not necessary for evidence and a trial to be heard in South Africa … Our courts then accept the foreign court’s order to freeze assets,” he said.
However, the problem at the moment is that this can only be done when the court order is a ”final order” and not subject to review or appeal.
Hofmeyr said the difficulty is that if an appeal is lodged, it could take ”months or even years to be completed”.
He said the AFU is to ask the minister of justice to delete the requirement that the order be final. This involves a fairly lengthy process of circulating the proposed amendment before Parliament finally approves it.
”We hope to have the amendment in place before the end of the year,” said Hofmeyr.
He said the need for a legislative amendment came to a head with the Cape High Court case of German businessman Alexander Falk, who faces a €500-million fraud case in Hamburg.
The national director of public prosecutions was earlier granted an interim interdict in the Cape High Court to restrain Falk’s South African assets, including €5,2-million in cash held at Standard Bank, and a large wine farm in Wellington valued at R5- to R6-million.
Falk, former chief executive of internet service provider Ision AG, stands accused of ”professional fraud and share pushing” related to the manipulation of his company’s share prices.
Falk allegedly published false sales figures, raising them by nearly a quarter, and then sold three-quarters of the company to United Kingdom concern Energis.
A criminal case against Falk was registered by the German federal police and he has been restrained from accessing his €532-million fortune — allegedly the gains from the scheme — by a Hamburg court attachment order.
An AFU lawyer involved in the case said Falk’s South African attorneys have to file replying papers within the next two weeks.
Meanwhile, the Banking Council of South Africa has ”wholeheartedly” welcomed legislative amendments that could help international anti-money-laundering efforts.
”If anti-money-laundering legislation have holes, there will be opportunities [to exploit]. South Africa can’t afford to be tainted with a reputation of being seen as a money-laundering destination,” said Stuart Grobler, general manager at the council.
Grobler added that South Africa probably has one of the most ”draconian” anti-money laundering legislative frameworks in the world, and he did not believe that it could be considered a ”favourable international centre” for money laundering. — Sapa