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Tobacco smuggling between Zimbabwe - SA now security threat

by Staff reporter
09 Oct 2023 at 13:49hrs | Views
SOUTH Africa is drowning in illicit cigarette smuggling which has seen the neighbouring country losing at least R50 million (US$2.6 million) daily in potential revenue from well-coordinated syndicates involving high-profile politicians and business tycoons on both sides of the Limpopo River, a Zimbabwe Investigative Journalism Network (ZIJN) investigation — published in collaboration with The NewsHawks — has shown.

So rife is the cigarette smuggling between Zimbabwe and South Africa mainly through the Beitbridge Border Post, sub-Saharan Africa's busiest inland port of entry, that the authorities across the Limpopo told ZIJN the issue has now become a national security threat as dealers sponsor organised transnational cartels and criminal gangs involved in illegal activities that breach border and immigration controls at will.

This poses border and national security threats for South Africa, officials say.

The heightened flow of illegal immigrants into South Africa from Zimbabwe is not the only problem between the two countries. There is also the issue of tobacco smuggling which is rampant.

Illicit tobacco trade in region is characterised by two key factors: South Africa provides the largest, most profitable, and thus important consumer market and cigarette production hub, while Zimbabwe is the biggest tobacco producer in the region and indeed the continent.

The trade is widespread and smuggling syndicates and networks criss-cross the region. Besides Zimbabwe and South Africa, illicit cigarettes are also sold in and trafficked through neighbouring countries Botswana, Namibia, and Mozambique.

However, the most significant smuggling routes into South Africa from Zimbabwe go through Beitbridge across the crocodile-infested Limpopo River.

Interviews with the Zimbabwe Republic Police and South African Police Service confirm ZIJN's independent findings that despite attempts to deal with the long-standing issue, the scourge remains rife mainly through illegal crossing points.

How cigarettes are smuggled into SA Investigations, which include interviews with truck and bus operators in Harare, as well as observations and engagements with some involved smugglers in Beitbridge, show that ordinary people, better-known as runners, are used to transport cigarettes using plastic bags they carry on their back.

Documentary evidence, that includes pictures and videos from different sources and made available since last month from multiple sources, also shows dozens of people carrying huge boxes of cigarettes being assisted by South Africa security officials to cross the fence using illegal points, an indication of connivance from border patrols.

The smuggling phenomenon is well-documented.

Insiders say small-scale smugglers work with state security agents from both South Africa and Zimbabwe, whom they pay money ranging from R500 to R1 500 for passage.

Smuggling cigarettes using buses is also rife at the border where it emerged local buses charge different fares ranging from US$450 to US$1 500, depending on the consignment.

Statistics availed by the South African Revenue Services (Sars) show that at least 500 people who cross the border daily are smuggling no less than two master cases of illicit cigarettes on their backs.

The cigarettes, it emerged, are then loaded into trucks across the border and small vehicles which use alternative routes alongside the border into some local farms where they are kept as they plan for a next move.

One of the sources at the border post confirmed how illicit cigarette smuggling is made through several villages in Beitbridge and South Africa's Limpopo province.

Villagers from Malale, Madimbo, Gumbu, Bennde-Mutale and Masisi in South Africa say they witness the transportation of cigarettes daily across the Limpopo River.

Smuggling is rife as traders seek to avoid value-added tax and other taxes, multiple sources that include Zimbabwe Revenue Authority (Zimra), police from Zimbabwe and South Africa and other officials said.

Limpopo provincial police spokesperson Colonel Malesela Jonathan Ledwaba confirmed arrests of cigarette smugglers were being made daily and that only last Saturday, a 48-year-old man was nabbed and is expected to appear in court this week.

The suspect, Ledwaba said, was flagged by the police and searched, leading to the discovery of smuggled cigarettes.

This, sources said, was only a tip of the iceberg and, in some instances, law enforcement agents are involved.

Every now and then smugglers are arrested between Zimbabwe and South Africa.
South Africa Police Service (Saps) national spokesperson Brigadier Athlenda Mathe could not immediately respond to enquiries despite earlier promises to do so.

However, Zimbabwe Republic Police national spokesperson Assistant Commissioner Paul Nyathi confirmed illicit cigarette smuggling was giving the law enforcement agency a headache.

He said police were working with their South African counterparts to curb the scourge.  

"The ZRP has an ongoing operation targeted at fighting smuggling of cigarettes and other items," Nyathi said.

"With regards to cigarettes, we are working together with Saps in terms of fighting and curbing smuggling through the Beitbridge Border post. We have made arrests and recovered some cigarettes," Nyathi said.

He said the police have engaged tobacco companies and manufacturers to ensure they play a part to curb smuggling in or out of the country.

Connivance of police, other authorities

Six Saps officers were in July arrested for corruption at the border post and appeared in court for the smuggling of illicit cigarettes.

This was confirmed by Limpopo police and also their Zimbabwean counterparts, who added that farms in Limpopo province, close to the Beitbridge post, are being used as temporary warehouses for the illicit cigarettes as shown by the number of arrests.

In June, the Hawks arrested five suspects after discovering illicit cigarettes with an estimated value of more than R30 million on a farm.

An insider said to get to their destinations, their trucks use small and private roads to avoid tollgates, roadblocks, and ad-hoc searches by law enforcement on main roads.

It also emerged through interviews with bus and truck drivers that some of their colleagues mislead authorities by falsify their cargo.

Some of the drivers misrepresent to the authorities that they will be transporting fuel or cotton when in actual fact they will be smuggling cigarettes.

The use of fuel or gas tanks to smuggle cigarettes is common.

One of the gas tanks used to transport fuel was seen at Toitskraal farm in Limpopo by the authorities.

"For instance, he can be driving a truck full of sugar, but cases of cigarettes will be hidden in his truck," an insider said.

"At times, this is done with the knowledge of patrol officers who are given bribes. In other instances, they do it alone. In most cases when a smuggler is caught it is either he would have failed to pay a bribe or it was through a tip off.

"On the South African side there are scanners that detect when there are cigarettes being transported. However, there is a way to go around them. You just have to pay the officers and you pass."

For those who continue to use the official border crossing at Beitbridge, buses with hidden compartments are used to smuggle cigarettes, as they are not scanned but only subject to sporadic road checks.

Experts say illegal cigarettes are identifiable mainly through their pricing. Cigarette manufacturers must pay VAT and excise tax for every pack of 20 cigarettes sold. This translates to around R20 per pack. So, any pack of 20 on sale for less than R20 would have been smuggled.

A former smuggler says that one of these cigarette-smuggling cartels involves politicians in the highest levels of government from both Zimbabwe and South Africa, but would not divulge names.

These trucks, run by politically-connected people, are not stopped or searched on the Zimbabwean side of the border.

The cigarette brands that are most frequently smuggled by tobacco trafficking and bootlegging syndicates are Remington Gold and Pacific Blue, both manufactured by Savanna Tobacco, now Pacific Cigarette Company, a Zimbabwean-based firm run by Adam Molai, the late former Zimbabwean president Robert Mugabe's nephew-in-law.

The company's cigarettes brands include Pacific, Pegasus, Branson and Remington Gold.
Pacific is being put under business rescue — a procedure aimed at facilitating the rehabilitation of a financially distressed company — due to political interference under the guise of tax arrears, Zimbabwean intelligence and tax authorities say.

Another company that has been entangled in multiple reports for cigarette smuggling is Gold Leaf Tobacco Zimbabwe, which is owned by the Rudland family.

It is owned by Simon Rudland, a renowned Zimbabwean business tycoon with an interest in logistics, finance, and agriculture. He is the co-owner of Gold Leaf Tobacco Corporation, a multi-national manufacturer and distributor of the Rudland & George RG cigarette brand.

In 2022, the South African Revenue Service accused Rudland's company of selling illicit cigarettes and avoiding taxes. The company was also named in the smuggling of gold by Al Jazeera Investigative Unit in a documentary titled Gold Mafia.

In 2019, two men attempted to assassinate Rudland over cigarette deals and rivalries, narrowly surviving death. Rudland was shot while in his car, but the culprits were never caught.

Last year in August,  Sars took charge of bank accounts, premises and all other assets owned by cigarette manufacturer Gold Leaf Tobacco Corporation and of its directors Rudland and Ebrahim Adamjee.

This, after Sars was granted an ex parte preservation order in the High Court in Pretoria in which a curator was appointed to look after the affairs of the company, Rudland and Adamjee.

Sars approached the court in secret and accused the company, Rudland and Adamjee of "fraudulent, intentional tax evasion" and being "obstructive".

Based on what seems to be a multiyear probe, ace investigators said the accused did not declare more than R2.5 billion in income from illicit cigarettes for the years 2017/18, nor VAT of more than R356 million from September 2016 to July 2017.

To hide the crimes, the plunder network allegedly managed a cross-border money-laundering racket that leaned on bribed Sasfin banking officials to sneak more than R3 billion in undeclared money mainly to Dubai, camouflage their footprints by deleting banking transactions, expedite payments, craft fake documentation and delete forex movement reports to the Reserve Bank.

Simon, brother to Hamish Rudland, has denied any involvement in the sale of illicit cigarettes, in gold or other forms of smuggling and in sanctions busting.

Cross-border transporters, known as Omalayitsha (the couriers) in Ndebele language, whose job is to transport groceries and property sent by Zimbabweans working in South Africa, are also used as cigarette smugglers when they return to South Africa.

Another source based in Beitbridge and has in the past investigated serious cases of general smuggling explained the process of how cigarettes and other goods are smuggled at the border saying authorities are also involved.

"The (Limpopo) River boundary between Zimbabwe and South Africa runs for over 200km stretch. The smugglers use border flanks and not the border post itself. Security bases are few, so these guys use the several crossing points and at times pay the security guys who deployed several crossing points and at times pay the security guys who are deployed without Transport and Subsistence allowances (T&S)," the source said.

In most cases, Zimbabwean soldiers and police are posted to the border post without travel and subsistence, exposing them to corruption.

A 2020 parliamentary portfolio committee report on Defence, Home Affairs and Security Services confirmed that the Zimbabwe-South African border is porous.

"There was a general outcry regarding smuggling of goods and precious minerals, human trafficking, delays in processing of travelling documents, rampant corruption and illegal exit and entry into the country, at various border posts. This has resulted in government losing taxes and duties accordingly, hence, impacting negatively on economic development," the report says.

"Various stakeholders, including civil society and the media, testified that there was need for government to act immediately and address these trepidations."

The parliamentary report said: "In relation to illegal entry and exit, the committee established that stretches for up to 255km, border policing is being done in areas covering less than 50kms and the remaining area becomes easily accessible for illegal crossing.

"Statistics submitted to the committee showed that a total of 16 187 have been arrested for illegal crossing from January to June 2019. This is a significant number and it can be quantified that on average 1 350 people are being arrested on monthly basis."

With reference to Beitbridge Border Post, it said: "At Beitbridge border post, the committee appreciate the government's efforts for the project underway in upgrading the border as this will go a long way in alleviating challenges emanating from lack of supportive infrastructure.

"The committee noted that the Zimbabwe Republic Police was currently relying on employing physical searching methods at all the border posts. However, it was indicated to the committee that these kinds of searches are not efficient enough to detect smuggled items.

"In connection with the above, the police did not have hand luggage scanners to detect smuggling of goods concealed in hand luggage or in any part of the body. In this regard goods such as drugs and gold have a tendency of being smuggled in that fashion. It was also established that the department did not have surveillance equipment such as drones and helicopters for aerial surveillance to prevent and detect smuggling cases. The committee further established that at Beitbridge and Forbes border posts the scanners were not functional."

The report said the parliamentary committee learnt that there were no vehicles for border patrol operations and government security agencies were relying on private hire to chase criminals.

At Beitbridge Border Post, the committee was informed that currently nine motorbikes were being used to patrol the whole 200km stretch for anti-smuggling along the Limpopo River from Tshikwalakwala on the east up to Shashe River, which flows into the Limpopo where Zimbabwe meets with South Africa and Botswana.

The stretch from Beitbridge to Sango Border on the southern end of Gonarezhou National Park is nearly 200km and Beitbridge to Tuli is around 185km.

The same challenge was also reported at Forbes Border Post where it was reported that the stretch from Forbes to Nyamapanda Border Post is nearly 530km in the north eastern part of the country.

"The committee was also informed that police had forward bases situated at strategic points which are 10km apart along the Limpopo River in case of Beitbridge and along Binya Road in case of Forbes Border Post. The aim is to thwart rampant smuggling and illegal crossing activities, some of which involve stolen vehicles and other things (tobacco for instance). Supervision for those on deployment was not being done since the motor cycles are old and constantly off the road."

Anti-corruption activist and Tax Justice South Africa's Yusuf Abramjee said despite the heavy presence of state security agents from both Zimbabwe and South Africa, smuggling of cigarettes remains rampant, an indication of "well-organised" criminality.

"South Africa now has the world's largest and most sophisticated cigarette smuggling network, with illicit cigarettes accounting for approximately 70% of the total cigarette sales nationwide," Abramjee, who frequently tweets on cigarettes smuggling, told ZIJN.

"While authorities have upped their efforts to combat the smuggling of cigarettes from Zimbabwe into South Africa the reality is that millions of illicit cigarettes continue to make their way into the country.

"These smugglers have allies at the highest level, who allow illicit cigarettes to flood our border in exchange for massive profits."

Abramjee said the smuggling of illicit cigarettes into South Africa was impacting negatively on the failure to deliver by the South African government as billions in potential revenue are lost in the criminal web.

"All South Africans are impacted by the illicit cigarette trade. It steals over R50 million from taxpayers and the exchequer on a daily basis. This impacts the government's ability to invest in vitally needed services such as healthcare, energy, housing and basic services," he said.

"It also poses a national security risk, financing organised crime and gangland violence."
Investigations corroborated by the anti-corruption hawks in South Africa show that approximately three out of every four cigarettes sold in South Africa are illicit with an estimated cost of over R20 billion to the government every year.

On whether there is a will from the authorities to deal with cigarette smuggling, Abramjee said: "South Africa's primary agencies in the fight against illicit, the National Prosecuting Authority and Revenue Service, were hollowed out during years of State Capture leaving them ill-equipped to tackle the sophisticated smuggling networks that have emerged. We now see that even when criminal proceedings are successfully issued by these agencies, they rarely result in a conviction.

"New laws currently under consideration by the government also threaten to push South Africa even further under the control of kingpins in organised crime. The government is planning to remove all branding from cigarette packets in South Africa which will make cigarettes even easier to counterfeit. Consumers trying to purchase a legitimate product will find it impossible to distinguish between the authentic and the fake."

Tax Justice SA on Thursday confirmed a suspect has been arrested in Welkom for possession of illicit cigarettes found in a hidden compartment inside a truck.

Commenting on the latest arrest, Tax Justice SA said: "It's no wonder South Africa has been ranked as a global hotspot for organised crime by the Global Initiative, the only international, independent organisation with a mandate to formulate a global strategy to reduce the harms of organised crime and build resilience to it. Six months since the Al Jazeera Investigative Unit ."

Source - newshawks