File picture: David Zalubowski/AP.
File picture: David Zalubowski/AP.

Illegal used-vehicle imports costing SA economy billions

By Bukeka Silekwa Time of article published Jul 6, 2019

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They come in grey from Japan, China and Singapore, and hit the black market in South Africa, costing the economy millions in lost revenue.

Foreign cars, illegal on our roads, are meant for other African countries, but many are siphoned off and sold to South Africans with the lie that they could be made legal.

The ban on the sale of second-hand foreign cars was introduced to protect the country’s industry.

“Our fiscus loses about 40% of the value of a new vehicle sale each time an illegal vehicle remains in the country. If the average vehicle sales value is R200000, then the state loses R80000 if a new vehicle sale is lost as a vehicle has replaced it in the country” said Lee Dutton, executive director at International Vehicle Identification Desk Southern Africa.

“The loss to the fiscus based on 4000 vehicles per annum would be R320million”

Patrick Moeng, of SA Revenue Service (Sars) executive customs investigations, said South Africa did not take second-hand vehicles for retail or distribution to the local market.

He said there were warehouses to store vehicles coming in from foreign countries before they were transported to neighbouring countries, but South Africans were not allowed to buy these cars.

“We have identified people from neighbouring countries, who previously bought cars from our warehouses, who are then driving those cars back into the country, to sell to South Africans.

“Either they work here or they have a relative in South Africa. When they come into the country, they are supposed to have a temporary permit for importation of those vehicles,” said Moeng.

“Because they are cheap, people buy them.

“They try to register them here, but they can never be legally registered. If it happens that these cars get registered, that means there are corrupt people in the traffic department. When we identify these vehicles we destroy them. We do not sell them on auction.

“We are working with SAPS, our municipalities and the manufacturing associations in South Africa to try to understand the extent of the problem. These syndicates have a big impact on the business of vehicles. They are eating into the market, which means they are impacting on jobs that can be created or the money that can be coming into the country.

“We ask people who have information about these dealers to report them. They are ripping people off. It is a crime that is costing our South African market,” said Moeng.

When contacted early in our investigation, Road Traffic Management Corporation spokesperson Simon Zwane said they were aware of the matter and had been investigating it for more than a year.

“The investigation is in a delicate stage and we cannot share much detail for now, because it might jeopardise the investigation. To permanently import vehicles, the minimum requirements for sensitive transactions stipulates the mandatory documentary evidence that has to be submitted when an application for the introduction of a motor vehicle is submitted.

“These are proof of compliance with customs legislation, a letter of authority from SAPS, originating registration certificate, etc. The proof of compliance with customs legislation includes a letter or permit from International Trade Administration Commission of South Africa (Itac) and the customs and excise documentation,” said Zwane.

“We have engaged the National Regulator for Compulsory Specifications, Sars and Itac to automate the process of introducing vehicles on to NaTIS which will nullify the need to investigate illegally introduced vehicles.”

Hawks spokesperson Captain Simphiwe Mhlongo responded to queries briefly, saying they did not have much information about these cars.

“When a police officer brings in a person who was driving a car with foreign papers with a foreign registration, with no crime linked to it, what can they charge him with? The police officer would have nothing on them to keep them. RTMC should be the ones that check and double check these cars,” said Mhlongo.

Retail Motor Industry (RMI) chief executive Jakkie Olivier, said it was a complicated issue, but the banning of imported vehicles was meant to protect local manufacturers.

“We have seen cases in other countries where the import of foreign vehicles has decimated the local market.

“Often vehicles are brought into the country under the guise that they are only in transit to another country, but really they are being dumped in South Africa and sold illegally. There is also a cloning practice where the identity of a legitimate scrapped vehicle is stolen and used for a matching imported vehicle.”

Dutton urged the public to deal with a reputable, accredited dealer if they needed pre-owned cars.

“A reputable dealer will be able to tell the difference between an illegal or cloned vehicle.

“As for the illegal cars, no matter how long you keep an illegal vehicle in your possession it never becomes legal. All illegally imported vehicles are seized by the Sars and are destroyed,” said Dutton.

“There are groups of related entities who ‘cook the books’ to avoid the controls.

“The most sophisticated also offer to ‘register’ vehicles in neighbouring states for customers and some manage to illegally register them locally, mainly as a ‘built-up.’”

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