From: Von Seidels
Article by David Legge
Counterfeit cigarettes, clothing and pharmaceuticals as well as pirated CD’s and DVD’s are among the leading illegal goods that are being smuggled across South African borders on a daily basis. The high demand for these goods has led to South Africa, as Africa’s largest economy, becoming a safe haven for criminals dealing in these illicit counterfeit items.
A report by the World Customs Organisation states that international sales of counterfeit goods comprises a 600 billion dollar industry which currently represents between 5-7% of total international trade.
In Southern Africa, illegal trade in counterfeit and illicit cigarettes has grown at a phenomenal pace and now comprises one of the most prevalent and problematic counterfeited items available on the black market. Low production costs and high levels of demand have made counterfeit cigarettes one of the region’s most illegally trafficked goods, with some reports recording that trade in illegal cigarettes has outgrown sales of illegal narcotics.
The trade in illegal cigarettes, also known as cigarette smuggling or ‘buttlegging’, is a criminal offence and essentially amounts to a form of tax evasion. Every year, over R4 Billion in legitimate tax revenue is lost due to trade in counterfeit cigarettes. This is the equivalent of:
- 74 000 new homes;
- 66 500 new policeman;
- 105 740 new jobs;
- 277 777 pensions grants;
- 400 000 electrical connections; and
- 229 000 Educational bursaries.
The Tobacco Institute of Southern Africa has revealed that more than 60% of all counterfeit cigarettes in originate from Zimbabwe which is partly due to poor border controls. Packets are sold for about R10 a pack, compared to approximately R30 for legal cigarettes. These cigarettes pose a greater health risk as standard manufacturing guidelines are not always observed and dangerous chemical additives are frequently added during production.
