White-Collar Crime 2024 Comparisons

South Africa's criminal legal system comprises both common law and statutory offences, without a formal categorisation framework. Instead, offences are classified by their severity, reflected in the sentences or sanctions, whether determined by legislation or case law precedents. Common law offences like murder, assault, theft and rape have evolved through judicial decisions, while statutory offences are defined by legislation, addressing actions or omissions not covered under common law. In prosecuting offences, the state must prove beyond a reasonable doubt that the accused engaged in voluntary unlawful conduct, possessed criminal capacity and acted with fault, either through intention or negligence.

In South Africa, white-collar crime is addressed through a comprehensive set of domestic laws that complement common law offences like fraud. The key statutes that form this legal framework are as follows.

• The Prevention and Combatting of Corrupt Activities Act 12 of 2004 (PRECCA) is the cornerstone of South Africa's anti-corruption legislation, establishing the general offence of corruption and specific related offences. PRECCA also covers ancillary offences such as being an accessory to corruption and attempts or conspiracies to commit corruption-related offences under PRECCA.
• The Prevention of Organised Crime Act 121 of 1998 (POCA) creates statutory offences that are encountered in the organised crime environment, such as racketeering, money laundering and offences relating to the proceeds of unlawful activities. The offences of racketeering and money laundering are cast widely, and address conduct relating to a pattern of racketeering activity and conduct concerning arrangements or transactions that involve the proceeds of unlawful activity.
• The Financial Intelligence Centre Act 38 of 2011 (FICA) plays a central role in combatting white-collar crime in South Africa. It established the Financial Intelligence Centre, which is responsible for detecting and combatting money laundering and terrorist financing, and for implementing financial sanctions pursuant to resolutions of the Security Council of the United Nations. FICA imposes reporting and monitoring obligations on accountable institutions (such as banks) and grants the Financial Intelligence Centre the authority to monitor, inspect and investigate suspected financial crimes. It also penalises non-compliance with its provisions and interference in the investigations of the Financial Intelligence Centre.

Motive is not required to prove liability for the commission of a crime, nor for an offence to be punishable. However, fault – whether in the form of intention or negligence – is generally a requirement that must be proven.

In South Africa, the burden of proof in white-collar crime proceedings lies with the state, which must prove the accused's guilt beyond a reasonable doubt. Section 35(3)(h) of the Constitution of the Republic of South Africa, 1996 provides that every person’s right to a fair trial includes the right “to be presumed innocent, to remain silent and not to testify during proceedings”.

Certain domestic legislation introduces presumptions that can shift the burden to the accused. For example, under POCA, unexplained wealth may be presumed unlawful, requiring the accused to prove otherwise. Similarly, in corruption cases, Section 24 of PRECCA creates a presumption that wherever a person is charged with a specific corruption offence involving the offer or acceptance of gratification and the state (despite having taken reasonable steps) is unable to link the gratification to a lawful purpose, the onus is on the charged person to prove the legitimacy of the gratification they gave or received.

The Criminal Procedure Act 51 of 1977 (CPA) governs criminal procedures in South Africa. Section 18 of the CPA provides that the right to prosecute any offence will lapse 20 years after the time when the offence was committed, except for certain specific offences such as murder, rape or treason. White-collar crimes would not fall within the list of offences that exceed this 20-year period. However, for continuing or concealed offences, the limitation period may only begin once the offence is discovered or ceases, allowing for prosecution even after the usual period has lapsed. The CPA defines an offence as any act or omission that is punishable by law.

In South Africa, enforcement authorities and courts can extend their jurisdiction to white-collar offences committed outside the country under certain conditions. Section 35 of PRECCA allows South African courts to prosecute corruption offences if the alleged offender is a South African citizen, a South African-registered company or ordinarily resident in South Africa, or if they were arrested within South Africa's territory (including its waters or on a registered vessel) and if the offence is intended to affect a public body, business or person in South Africa.

POCA also has extraterritorial reach. It criminalises racketeering and related activities regardless of where they occur, extending its jurisdiction to unlawful activities that happened outside South Africa.

The Extradition Act 67 of 1962 outlines the process for surrendering individuals to designated states, including Ireland, Zimbabwe, Namibia and the UK. South Africa is also a signatory to various international conventions that support international co-operation and enforcement against white-collar crimes, including:

• the Council of Europe's Convention on Extradition;
• the Southern African Development Community (SADC) Protocol on Extradition;
• the United Nations Convention against Transnational Organised Crime; and
• the SADC Protocol on the Control of Firearms, Ammunition and Related Material.

However, extradition requests are not always that simple. One of the infamous examples is South Africa's failed attempt to extradite Atul and Rajesh Gupta from the United Arab Emirates for their alleged involvement in South Africa's recent history of corporate crime and corruption.

South Africa has also entered into the “Agreement on Trade, Development and Cooperation between the European Community and its Member States and the Republic of South Africa”, which is aimed at “notifying enforcements and co-operation between the parties in investigating harmful or unfair business practices”.

Corporate entities may face criminal liability in South Africa for a wide range of offences. They can be prosecuted for any crime, unless the law specifically limits liability for a particular offence to natural persons.

Section 332 of the CPA contains express provisions deeming certain acts and omissions of the directors and “servants” of a company to be the acts and omissions of the company itself. In general, the acts and omissions of a company’s directors or “servants”, when exercising their powers or performing their duties or when undertaken in furtherance of the company’s interests, are attributed to the company for the purposes of imposing criminal liability on the company for any statutory or common law offence.

While there is no definition of “servant”, the term is understood to encompass not only employees but also anyone whose work falls under the company’s control. In general, for a company to incur criminal liability, a degree of supervision and control by the company over the relevant individual is required.

In South Africa, however, a company may face criminal liability if an individual commits a crime while acting to further the company’s interests, regardless of whether such conduct was within the scope of that individual’s duties.

Personal liability for managers and directors can arise if it is shown that they were personally involved in the criminal conduct of the company, or were negligent in preventing such conduct. Under statutes like the Companies Act 71 of 2008 and various pieces of criminal legislation, directors and managers can be held accountable if they failed to exercise due diligence or were complicit in the criminal activities of the company.

Both the company and the individuals involved may be prosecuted for the same crime. A company is a legal person without any physical existence and has no mind or will of its own. For this reason, the acts, omissions, intentions, purposes and knowledge of certain individuals within the company are regarded as being the acts, omissions, intentions, purposes and knowledge of the company. However, a company may be prosecuted for an offence even if the individuals who committed the offence are not prosecuted in their personal capacities. Company representatives will face criminal liability only if they are complicit in the wrongdoing.

Parent companies are typically not liable for their subsidiaries' actions unless they are directly involved or condone the conduct. In addition, a company acquiring another after the offending conduct occurred cannot be held liable for the previous company's actions, nor can new board members or employees be held accountable for past offences.

Once a defendant is convicted of a white-collar offence, the sentencing process involves both legislative guidelines and judicial discretion. South African courts have broad discretion in determining sentences, but this discretion operates within a framework established by legislation. Statutes like PRECCA, POCA and FICA set maximum penalties for various offences, including fines, imprisonment, or both. The CPA and the Criminal Law Amendment Act 105 of 1997 prescribe minimum sentences for specific crimes, such as a mandatory 15-year imprisonment for a first-time fraud offender involving amounts over ZAR500,000. Deviations from these minimum sentences are only permitted under substantial and compelling circumstances.

During sentencing, the court evaluates both mitigating and aggravating factors, including the defendant's co-operation with authorities and the impact of the offence.

A prosecutor can enter into a plea agreement considering factors such as the nature of the offence, the accused’s circumstances, prior convictions and community interests. The complainant should be given a chance to make representations about the agreement and compensation. The court must ensure the accused acknowledges the agreement, that the requirements of Section 105(A) of the CPA are met, and that the sentence is fair. The CPA also provides general rules regarding the assessment of penalties in relation to plea agreements (see 4.3 Plea Agreements, Co-operation, Self-Disclosure and Leniency).

The National Prosecuting Authority (NPA) recently introduced directives for a “Corporate Alternative Dispute Resolution” (Corporate ADR) as a means of settling with prosecuting authorities. However, Corporate ADR is only applicable to companies that have been charged with corruption and/or offences relating to corruption (see 2.6 Deferred Prosecution).

The common law in South Africa entitles a person who has suffered financial loss caused by the unlawful and wrongful actions of another individual to recover that financial loss from the wrongdoer. This would include a claim by a victim against the actions of the perpetrator of a white-collar crime. Such a claim would usually be instituted under the law of “delict” (tort).

In order to be successful in a claim for delictual damages, the plaintiff must prove the following:

• the defendant performed an act;
• the act was “wrongful”;
• the wrongful act caused harm to the plaintiff, in the form of damage or loss; and
• the act occurred due to the fault (whether intentionally or negligently) of the defendant.

Importantly, South African law does not recognise “punitive damages”, as such; the victim of a crime is only able to recover the damage that they can prove they have actually suffered.

Although the provisions of POCA are more focused on the forfeiture and confiscation of the proceeds of crimes by the state, the act also contains provisions which specifically recognise that there may be individuals who wish to recover property from the perpetrator(s) through civil proceedings. In this regard, under POCA, the National Director of Public Prosecutions is entitled to apply to the state for the confiscation or forfeiture of the benefits derived from any unlawful activities (ie, the proceeds of a crime).

However, POCA also allows individuals who have “suffered damage to or loss of property or injury as a result of an offence or related criminal activity ... which was committed by the defendant” to make representations to the court in regard to suspending the forfeiture of those proceeds to the state, pending the civil proceedings to be instituted, and finalised, by the victim against the perpetrator. Those proceeds can then be used to satisfy any judgment against the perpetrator.

The court of first instance in South Africa is a magistrates court or a high court (depending on the quantum of the dispute).

Class Actions

In South Africa, class actions are governed by a two-stage process. The first stage involves a certification application, where potential plaintiffs must obtain court permission to proceed with a class action. The definition of the class is a key issue in this application. Since there is no specific legislation for class actions, the Uniform Rules of the High Court regulate the procedural aspects, and class actions are typically filed in the High Court.

The Supreme Court of Appeal in Trustees for the time being of Children's Resource Centre Trust and Others v Pioneer Food (Pty) Ltd and Others (050/2012) [2012] ZASCA 182 outlined seven factors for certifying a class action. However, in Mukaddam v Pioneer Foods (Pty) Ltd and Others (CCT 131/12) [2013] ZACC 23, the Constitutional Court clarified that these factors are not strict requirements but rather considerations in determining certification. The court’s discretion is guided by the principle of “the interests of justice”, meaning that the absence of any particular factor does not automatically disqualify a class action from being certified.

A number of entities may investigate corporate crime in South Africa, as follows:

• the South African Police Service (SAPS) investigates all types of criminal activity;
• the Directorate of Priority Crime Investigation (DPCI), known as the “Hawks”, is a specialised branch within the SAPS that focuses on the investigation of organised crime, corruption and any other serious crime;
• the Commercial Crimes Unit is part of the NPA and is dedicated to investigating complex economic offences;
• the Special Investigating Unit (SIU) investigates corruption and maladministration within South African government institutions; and
• the Investigating Directorate Against Corruption (IDAC) investigates corruption-related offences arising from the Zondo Commission.

The SAPS's limited ability to investigate complex white-collar crime, coupled with concerns about the Hawks' independence as an anti-corruption agency, continues to be a major barrier to effectively investigating and prosecuting corporate crime in South Africa.

The NPA is empowered to institute and prosecute criminal proceedings on behalf of the state. The Asset Forfeiture Unit (a specialised unit established within the NPA) may also become involved in corporate criminal investigations, with the primary focus of recovering the proceeds of unlawful activities.

In addition to the SAPS, other regulatory bodies like the Financial Sector Conduct Authority and the South African Reserve Bank (which oversees banking regulation) can refer criminal cases to the NPA. After such referrals, these regulators may support the NPA in developing its case, especially given the complexity of certain financial crimes and the possibility of a detailed prior regulatory investigation. The Financial Intelligence Centre aids both the SAPS and the NPA by identifying illicit financial gains, combatting money laundering and terrorist financing, and providing crucial financial intelligence to support crime-fighting efforts.

The Public Protector is an additional administrative body that has the broad power to investigate, report on and remedy improper conduct in all state affairs (in relation to organs of state and state functionaries). Members of the public are entitled to lodge a complaint with the Public Protector after they have exhausted all other available avenues to resolve the complaint.

The Competition Commission and the Competition Tribunal are two other highly active enforcement authorities that conduct investigations into unlawful corporate conduct – including cartel conduct and restrictive business practices – and determine the punishment for these offences. This is addressed in further detail in 3.7 Cartels and Criminal Competition Law.

Finally, the Specialised Commercial Crimes Court has also been established within the judicial ranks of the South African court system, and conducts some of the trials relating to commercial criminal offences.

There are a number of agencies and governmental bodies with mandates that include investigating corporate impropriety, and each of those bodies may have different processes.

These bodies have powers to subpoena information and witnesses, powers of search and seizure, and powers to access financial information. Accordingly, the manner in which an investigation is conducted will likely depend on the agency conducting the investigation and the nature of the offence. For example, an investigation concerning money laundering would likely involve the Financial Intelligence Centre, which is the body mandated to monitor financial transactions for the purposes of combatting money laundering and other finance-related offences, such as terrorist financing. However, an investigation concerning corruption would often involve the DPCI or IDAC, whose remit includes investigating commercial crimes.

Investigations may be triggered via multiple avenues, including third-party reports made directly to the authorities, voluntary self-disclosures or reports made in accordance with statutory obligations.

In order to pursue a criminal prosecution, the agency or body conducting the initial investigation will refer the investigation to South Africa's prosecuting authorities (the NPA) and thereafter co-operate with the NPA to gather evidence and prepare a case against the alleged offenders.

Multiple statutory bodies are empowered to investigate corporate crime. The investigative powers afforded to a particular agency or body are generally determined by the empowering legislation that confers the authority on the agency to conduct investigations. The range of powers typically granted to agencies authorised to conduct investigations include:

• powers to compel the production of evidence (ie, books, records, documents, electronic data or other information) from “any person” (natural or juristic) believed to be able to furnish information relevant to the investigation;
• powers to compel persons to appear in person to provide verbal information;
• powers to acquire relevant information (both documentary and verbal information) through a range of mechanisms, including subpoenas or through invoking specific legislative provisions authoring the request for information;
• powers of search and seizure (ie, dawn raids); and
• powers to access financial records and information.

South Africa's principal piece of criminal law legislation, the CPA, also addresses issues such as the admissibility of evidence, search warrants and powers in relation to the entering of premises and the seizure and disposal of property. In addition, under the CPA, everyone who is a compellable and competent witness can be required to give evidence in court.

Enforcement authorities also co-operate with one another. For example, FICA, as amended by the Anti-Money Laundering and Combatting Terrorism Financing Amendment Act 22 of 2022 (AML Act), also allows the Financial Intelligence Centre to share information held or produced by it with investigative divisions in national departments, the Public Protector and the investigative division of the Auditor General.

South Africa has no single overarching duty, nor any specific requirement or obligation, for companies to conduct internal investigations. The relevant statutes applicable in respect of the prosecution and enforcement of financial or white-collar crimes generally make provision for investigation by the relevant regulatory bodies.

However, certain South African statutes create reporting duties on individuals and institutions in the event of a suspicion of unlawful activity.

For example, in certain instances, PRECCA requires individuals in positions of authority within companies to report any “suspicion” that certain crimes have been committed, such as theft, fraud or “corrupt activities” that fall above a certain threshold (currently ZAR100,000).

Section 29 of FICA also creates an obligation to report financial sanctions offences and suspicious and unusual transactions and activities relating to money laundering or terrorist financing to the Financial Intelligence Centre.

Although not obligatory, internal investigations may assist organisations and the relevant individuals to comply with those duties, and to assess their potential exposure in the event of investigations being launched by regulatory bodies.

In certain circumstances, the evidence and information revealed as a result of internal investigations may be used in subsequent court proceedings or by regulatory bodies and enforcement authorities, insofar as they comply with the relevant requirements for admissibility in respect of those proceedings. For example, FICA states that a certificate issued by an official of the Financial Intelligence Centre, stating that the information specified in the certificate was reported or sent to the centre in terms of FICA, is admissible as evidence of any fact contained in it on its mere production in a matter before a court.

Although a number of enforcement agencies investigate white-collar offences in South Africa, these agencies co-ordinate with South Africa's primary prosecuting authority, the NPA, which is the body responsible for prosecuting white-collar crimes, and the NPA determines whether to prosecute a case.

For example, the SIU is an independent body created by statute with the primary mandate of recovering and preventing financial losses suffered by the state. Although it has certain powers of investigation, such as the power to subpoena, search, seize and interrogate witnesses, the SIU refers its reports, findings and evidence to the SAPS and the NPA, and works with them to ensure effective investigation and prosecution of the matters the SIU investigates.

The National Director of Public Prosecutions determines prosecution policy and issues policy directives, which guide the decision to prosecute, such as the Prosecution Policy that sets out the relevant factors to be considered when evaluating evidence in order to determine whether or not to prosecute.

South Africa does not have specific legislation that regulates Deferred Prosecution Agreements (DPAs). However, subsequent to the Zondo Commission's recommendation in June 2022 that South Africa introduce legislation that allows for the introduction of DPAs under specific terms and conditions, the NPA has introduced its directives for a “Corporate Alternative Dispute Resolution” (Corporate ADR) policy.

South Africa's Corporate ADR policy is similar to the DPA mechanisms and non-prosecution agreements utilised in jurisdictions like the United States and the United Kingdom. It provides a mechanism for companies to resolve corruption and related offences without a criminal trial and typically involves admitting guilt, paying financial remediation (encompassing both the disgorgement of the proceeds of criminal activities and the compensation of victims) and implementing compliance programmes.

Importantly, Corporate ADR in South Africa is only applicable to companies that have been charged with corruption and/or offences relating to corruption. The Director of Public Prosecutions and any Investigating Director has the power to determine whether to issue a Corporate ADR.

The Corporate ADR directives published by the NPA set out four “guiding principles” that should be considered when determining whether Corporate ADR should be applied, as follows.

• The principle of legality and rationality: Corporate ADR must uphold the rule of law and promote corporate accountability for corruption. Any decision to utilise Corporate ADR must be justifiable and reasonably predictable.
• The principle of public interest: the decision must be in line with objectively justifiable public interest considerations (for example, as set out in the NPA's Prosecution Policy). Several criteria must be considered when determining whether Corporate ADR would be in the public interest, including the following. The weight of each consideration will depend on the facts of each case, and not all criteria will be relevant in every case:
1. timeous and voluntary disclosure – whether the company timeously and voluntarily made effective disclosure of evidence and information (including information not previously known to the NPA);
2. co-operation with investigations and prosecutions – whether the company preserved and timeously provided the NPA, or other agencies, with evidence and information of the unlawful activities, co-operated in any investigation and paid for private investigations;
3. fair, reasonable and proportionate restitution – the willingness of the company to make such restitution may also be taken into account;
4. the nature, seriousness and complexity of the unlawful activities – this includes evidentiary and other challenges, such as the likely length of the trial and the availability of resources needed to conduct an effective prosecution within a reasonable time;
5. the pervasiveness of wrongdoing in the company – this will weigh heavily against Corporate ADR, including whether there are recurrent offences or a pattern of co-ordinated conduct within the company, where culpable individuals are not disciplined or dismissed;
6. prior misconduct or wrongdoing – it should be considered whether the company has a pattern of misconduct or wrongdoing, and the nature of any such prior misconduct and breaches;
7. the existence of an effective compliance programme – the existence of a compliance programme will weigh in favour of Corporate ADR, as will the company's willingness and capacity to implement, improve, monitor and report on an effective compliance programme, and to discipline culpable individuals;
8. the likelihood of significant negative collateral effects – in particular, any negative effects that may be experienced by employees, shareholders, creditors, the economy, community or broader society in the event of a prosecution and conviction; and
9. the interests of the victims – regard may be had to any meaningful action taken by the company to make good the harm caused.

• The principle of guided discretion: the NPA must exercise its discretion in applying Corporate ADR based on certain “practical considerations” that must be taken into account (these largely mirror, in summary form, the “public interest” considerations).
• The principle of transparency: the Corporate ADR process shall be recorded in writing and a summary of the contents published, to ensure transparency and accountability.

Companies may face corporate criminal liability in South Africa for a wide range of offences – companies may be prosecuted for any crime unless the law specifically limits liability for a particular offence to natural persons (eg, sexual offences). Due to this wide ambit, including statutory and common law offences (such as fraud), it is not possible to provide a concise list.

A particular offence to note in the context of corporate fraud and white-collar offences is that, under PRECCA, any person who conspires with, aids, induces, instructs, commands or counsels another person to commit an offence under PRECCA is guilty of an offence. Accordingly, a company may be liable if a director or servant of that company instructs or is complicit in a third party’s commission of an offence, when exercising their powers or performing their duties in furtherance of the company’s interests. However, South Africa does not have a good track record of prosecuting corporate crimes, and there is limited case law on the types of fines that companies would expect to face if convicted of serious offences such as corruption.

Fines and, in certain circumstances, the confiscation and forfeiture of assets are the only forms of punishment courts may impose on companies found guilty of a crime. The size of the fine depends on the nature and scope of the crime and the existence of aggravating and mitigating factors (such as co-operation with the investigation).

The AML Act amends the Companies Act, 2008 to include the disqualification of a director if they have been convicted for an offence involving money laundering, terrorist financing or proliferation financing activities.

PRECCA creates the general offence of corruption (the primary corruption offence in South Africa) as well as a number of specific corruption offences, including those in respect of corrupt activities relating to:

• public officers;
• foreign public officials; and
• contracts.

Although PRECCA makes provisions for specific corruption offences, the elements of each offence are substantially similar to the general corruption offence contained in Section 3 of PRECCA, which provides that a person is guilty of the offence of corruption if they carry out any of the following acts, directly or indirectly:

• accepting or agreeing to accept any gratification from another person; or
• giving or agreeing to give any person any gratification, whether for the benefit of themselves or for the benefit of another person, in order to act personally or by influencing another person to act in a manner that amounts to:
1. illegal, dishonest, unauthorised, incomplete or biased behaviour;
2. the misuse or selling of information or material acquired in the course of the exercise;
3. carrying out or performing any powers, duties or functions arising out of a constitutional, statutory, contractual or any other legal obligation;
4. abuse of a position of authority, a breach of trust or the violation of a legal duty or a set of rules, designed to achieve an unjustified result; or
5. any other unauthorised or improper inducement to do or not to do anything.

Under PRECCA, it is an offence to enter into a corrupt relationship with any person, rendering such conduct illegal in both the public sector and the private sector.

In 2024, South Africa's primary piece of corruption legislation, PRECCA, was amended to include a “failure to prevent corrupt activities” offence with the addition of Section 34A. This stipulates that any member of a private sector organisation or an incorporated state-owned entity is considered guilty of an offence if an individual associated with them provides, agrees to provide or offers any gratification prohibited under PRECCA to another person, with the intent of securing or maintaining business or a business advantage for the benefit of the member or entity. Section 34A provides a defence if it can be demonstrated that adequate procedures to prevent corruption were implemented. However, what constitutes “adequate procedures” and the specific requirements for companies have yet to be defined by the courts or regulations.

Section 42 of FICA also requires all accountable institutions to have a risk management and compliance programme in place.

With regard to insider dealing and market abuse, the primary statute involved is the Financial Markets Act 19 of 2012 (FMA). Chapter X (Market Abuse) of the FMA provides for the offences of:

• insider trading;
• prohibited trading practices and false, misleading or deceptive statements;
• promises; and
• forecasts.

It also provides for the penalties resulting from the commission of such offences.

Under Section 78 of the FMA, insiders who know that they have inside information and who deal, directly or indirectly or through an agent for their own account, in the securities listed on a regulated market or in derivatives related to those securities, to which the inside information relates or which are likely to be affected by it, commit an offence. Anyone who knowingly deals on behalf of an insider is also guilty of an offence.

The sanctions for insider trading vary. A person found guilty is liable to pay an administrative sanction not exceeding:

• the equivalent amount of the profit that the person made (or would have made had they sold the securities at any stage) or the loss avoided through such dealing;
• an amount up to ZAR1 million (adjusted for inflation annually) plus three times the amount referred to above;
• interest; and
• costs, including investigation costs.

In addition, any person who commits the offence of insider trading is liable on conviction to a fine not exceeding ZAR50 million or imprisonment for a period not exceeding ten years, or both.

The FMA also regulates market-manipulating behaviour, prohibiting any conduct that:

• creates the false appearance of demand for a security of a company listed on a regulated market;
• creates an artificial price; or
• makes any false, misleading or deceptive statement in connection with the securities of a company listed on a regulated market.

The FMA also places a positive obligation on any person who makes such a statement while being unaware that the statement was false, misleading or deceptive, and on any person who becomes aware of such, to publish a full and frank correction with regard to such statement without delay.

A person who commits an offence relating to market manipulation under the FMA is liable on conviction to a fine not exceeding ZAR50 million, imprisonment for a period not exceeding ten years, or both.

Although there is no statute dealing directly with criminal banking, the Banks Act 94 of 1990 regulates the business of a bank and prohibits a person from conducting the business of a bank unless such person is a public company and is registered as a bank in terms of the Banks Act. A person found guilty of conducting the business of a bank without complying with the Banks Act shall be liable to a fine (to be determined by the court) or imprisonment for a period not exceeding ten years, or both.

The Tax Administration Act 28 of 2011 (TAA) governs tax-related offences in South Africa. In addition to giving the South African Revenue Service (SARS) wide-ranging powers to investigate potential tax violations, it also criminalises a variety of offences in relation to non-compliance with tax legislation, including:

• dissipating a person's assets or assisting another to dissipate their assets in order to impede the collection of any taxes, penalties or interest;
• issuing an erroneous, incomplete or false document required to be issued under tax legislation;
• failing to comply with a directive or instruction issued by SARS; or
• failing or neglecting to disclose to SARS any material facts that should have been disclosed.

Such offences may result in a fine or imprisonment for a period not exceeding two years.

In addition, the TAA provides for the offence of tax evasion. A person who falsifies information, gives a false answer to a request for information under the TAA, prepares and maintains false books or makes use of fraud or contrivance, with intent to evade or to assist another person to evade tax or to obtain an undue refund under tax legislation, commits the offence of tax evasion and is guilty of an offence under the TAA, being subject to a fine or imprisonment not exceeding five years.

Although there is no express duty to prevent tax evasion in South Africa, with regard to the wording of Section 235, a person who has knowledge of tax evasion activity but does nothing to prevent it could be said to have assisted in the evasion of tax in the event that they were complicit in enabling tax evasion (for example, a private banker who knowingly allowed their bank to be used by another party in evading tax).

In Arena Holdings (Pty) Ltd t/a Financial Mail and Others v South African Revenue Service and Others (CCT 365/21) 88359/2019), the Constitutional Court confirmed in 2023 that certain sections of the TAA were unconstitutional, to the extent that they disallow access to a person's tax records even where the requirements of the Promotion of Access to Information Act 2 of 2000 are met. The case dealt with the tax records of a former president and issues of public interest in respect of his tax records. There are thus uncertainties about the confidentiality of the tax records of high-profile public figures.

FICA obliges particular entities defined as “accountable institutions” to keep various records pertaining to clients, prospective clients and transactions. These records must be kept for at least five years. In particular, accountable institutions are required to retain customers' “due diligence records” and records of all “transactions” with the client. Examples of the due diligence records that must be kept include documents used in verifying the identity of a party, the source of funds and the nature of the business relationship. Examples of transaction records that must be retained include the amount and currency involved, the parties and the nature of the transaction, business correspondence and the identifying particulars of all accounts, account files and account facilities.

In addition, the Financial Intelligence Centre is entitled to examine, make extracts from or make copies of any such record.

Failure to comply with the record retention requirements under FICA constitutes an offence, for which the accountable institution will be subject to an “administrative sanction”. The nature of the sanction is determined at the discretion of the Financial Intelligence Centre. The factors that are taken into account include the nature of the non-compliance with FICA, previous compliance history and any remedial action taken to prevent a recurrence of the non-compliance.

The sanction may include:

• a caution not to repeat the conduct;
• a reprimand;
• a directive to take remedial action or to make specific arrangements;
• the restriction or suspension of certain specified business activities; and
• a financial penalty not exceeding ZAR10 million in respect of natural persons and ZAR50 million in respect of legal persons.

It should be noted that the Financial Intelligence Centre may direct that, in respect of institutions, the penalty should be paid by the natural person for whose actions the relevant institution is accountable in law if that person was personally responsible for the non-compliance.

The AML Act enhances the requirements of FICA in line with international practice. It requires accountable institutions to demonstrate how their risk management and compliance programme applies across all branches and subsidiaries, and requires accountable institutions to share suspicious activity and transaction data across all branches and subsidiaries. The AML Act also provides for greater co-operation between regulators such as SARS and the Financial Intelligence Centre, and for the set-up of a public private partnership, which is similar to the Joint Money Laundering Intelligence Taskforce in the UK.

The Competition Amendment Act 18 of 2018 prohibits various forms of traditional cartel conduct, including price fixing, market allocation and collusive tendering. This conduct is prohibited per se, in the sense that no pro-competitive gains can be offered to justify the conduct.

Firms can engage in this conduct by way of agreement or through a concerted practice. Agreements in this context are broadly defined to include contracts, arrangements and understandings, whether or not they are legally enforceable, and the notion of a “concerted practice” encompasses co-operative or co-ordinated conduct through direct or indirect contact between firms that does not amount to an agreement, but which replaces those firms' independent action.

The responsibility for investigating and prosecuting firms for such conduct lies with the Competition Commission of South Africa. If, following an investigation, the Competition Commission considers there to be sufficient evidence that a firm has contravened the Competition Act, it will refer the matter for prosecution before the Competition Tribunal (Tribunal).

The Tribunal may make a finding that the firm has engaged in cartel conduct of the nature described above, in which case it may impose an administrative penalty on the firm of up to 10% of the firm's annual turnover in South Africa and its exports from South Africa during the firm’s preceding financial year. If the firm subsequently engages in conduct that is substantially a repeat of the conduct that was previously found by the Tribunal to be a prohibited practice, this limit is increased to 25%.

In determining the extent of the administrative penalty to be imposed, the Tribunal can increase the cap on the administrative penalty amount to include the turnover of a firm that controls the guilty firm. The Tribunal can also hold a controlling firm jointly and severally liable for the administrative penalty imposed.

The Competition Act imposes criminal liability on persons (but not firms) who, while being a director of a firm or while engaged or purporting to be engaged by a firm in a position having management authority within the firm, either:

• cause the firm to engage in cartel conduct; or
• knowingly acquiesce in the firm engaging in such conduct.

It is a prerequisite to any such finding that the firm involved has acknowledged in a consent order that it engaged in cartel conduct or has been found to have engaged in such conduct by the Tribunal or the Competition Appeal Court.

A person convicted of this offence is liable to a fine not exceeding ZAR500,000 or to imprisonment for a period not exceeding ten years, or to both. The NPA has the authority to prosecute individuals for the offence.

The majority of consumer crimes (eg, fraud, theft) are dealt with under the South African common law (and criminal law in particular) and are not necessarily established by statute. However, the Consumer Protection Act 68 of 2008 also plays a part in this particular area of the law.

A report is generally made to the SAPS (specifically the Commercial Crimes Unit) and, if a decision is made to do so, the defendant is prosecuted by the NPA. If the offence is a contravention of the Consumer Protection Act, it can also be reported to the National Consumer Commission, which may refer the complaint to the NPA.

If white-collar offences are successfully proved and the defendant is found to be guilty, the sanction is generally imprisonment (natural persons) and/or a penalty.

Pyramid schemes may constitute both a fraud and a theft. They also represent a contravention of Sections 11(1) and 11(2) of the Banks Act, which constitutes an offence thereunder.

The Consumer Protection Act was enacted in order to:

• establish norms and standards relating to consumer protection;
• prohibit unfair marketing and business practices;
• promote responsible consumer behaviour; and
• create an enforcement framework relating to consumer transactions and agreements.

The Act imposes various obligations and standards on the suppliers of goods and services, and attempts to ensure the protection of the consumer. It also prohibits certain “unconscionable” conduct relating to the marketing and supply of goods and services to consumers, and the negotiation, conclusion and enforcement of an agreement to supply goods or services to consumers.

Although the common law crimes of fraud and/or theft still apply, the Consumer Protection Act also prohibits (amongst many other things) the initiation, sponsoring or promotion of, or participation in, “fraudulent schemes and offers”, including pyramid schemes.

The Consumer Protection Act entitles a consumer who wishes to enforce any of their rights thereunder to:

• refer the matter to a consumer court;
• refer the matter to the relevant ombud with jurisdiction;
• refer the matter to the Consumer Tribunal (in certain instances); or
• file a complaint with the National Consumer Commission, which is entitled to investigate any complaint and, if necessary, refer the matter to the NPA if an offence has been committed.

A person convicted of an offence under the Consumer Protection Act is liable to a fine or imprisonment for a period not exceeding 12 months, or both.

The Consumer Tribunal is also entitled to impose administrative fines in respect of prohibited or required conduct. The administrative fine may not exceed the greater of 10% of the respondent's annual turnover during the preceding financial year or ZAR1 million. The appropriate penalty is determined after considering a range of factors, such as the gravity of the offence, the loss suffered, the level of profit derived from the contravention and the degree of co-operation of the transgressor.

The Electronic Communications and Transactions Act 25 of 2002 (ECTA)

ECTA criminalises conduct aimed at unlawful interference with, access to, or interception of electronic data, including hacking, the production and sale of devices such as software used for hacking and related offences. It is also an offence if committing any of these offences results in the production of fake data with the intent that this data be considered or acted upon as if it were authentic for purposes of obtaining any unlawful advantage.

To be found guilty of any of these offences, it must be proved that the perpetrator acted with intention and without authority (as opposed to, for example, the lawful interception of data by law enforcement authorities under the direction of a court order).

It is also unlawful in terms of ECTA to threaten to commit any of these crimes or to offer not to do so in return for a reward; accordingly, extortion and ransom attacks are also criminal offences. The penalties for these offences range from fines to imprisonment for up to five years.

The Cybercrimes Act

The Cybercrimes Act 19 of 2020 was passed into law on 26 May 2021 and seeks to criminalise digitised criminal activities. The enactment of the Protection of Personal Information Act and the Cybercrimes Act is South Africa's response to criminal activities that may become prevalent in the increasingly digitised future.

The most notable specific offences that are included in the Cybercrimes Act are “unlawful access” offences. An individual will be guilty of this in circumstances where they unlawfully and intentionally accessed a computer system or a computer data storage medium. The unlawful interception, interference with or acquisition of data, a computer program, a computer data storage medium or a computer system is also criminalised in the Act.

The Act further criminalises data messages that are sent to a person or a group of individuals with the intention to incite any damage to property belonging to a person or a group of persons, or any violence against any person or group of persons. It also establishes the offence of disclosure of a data message of an intimate image.

The Cybercrimes Act casts the net wide in terms of application. It defines a “person” as a “natural and juristic” person, which means that both natural persons and organisations may be guilty of the offences contained in the Cybercrimes Act, but are also afforded the protections that the Cybercrimes Act provides.

POCDATARA Amendment Act

The Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act, 2022 (POCDATARA Amendment Act) includes reference to certain offences under the Cybercrimes Act being considered a “terrorist activity”, such as:

• unlawful access;
• unlawful interception of data;
• unlawful interference with data or computer programs;
• unlawful interference with computer data storage;
• unlawful acquisition, possession, provision, receipt or use of a password, access code or similar data;
• unlawful use or possession of a software or hardware tool; and
• cyber-extortion.

South Africa does not impose autonomous sanctions; it only enforces sanctions that are mandated by the United Nations Security Council (UNSC). However, South Africa has not imposed any autonomous sanctions in recent years. Specifically, Part 2A of FICA provides for the enforcement of financial sanctions issued by the UNSC, and Section 26(B) of FICA provides for a wide prohibition on dealing in any way, or inviting to deal, with a person or entity identified pursuant to a resolution of the UNSC, subject to limited exceptions.

Failure to comply with this provision of FICA constitutes an offence and is punishable with a fine not exceeding ZAR100 million or imprisonment not exceeding 15 years. It is worth noting that South Africa takes a reactive approach to sanctions enforcement. In 2023, South Africa's position on sanctions against Russia drew media attention as the South African government faced criticism for its opposition to economic sanctions on Russia.

Under POCA, which is South Africa's primary anti-money laundering legislation, it is an offence to enter into a transaction in order to conceal or disguise the nature or source of property (including money) that is deemed to be the proceeds of unlawful activity. This is addressed in more detail in 3.13 Money Laundering.

Generally, conspiring with or aiding another party to commit an offence may render the party who assisted the offender in committing a crime guilty of an offence. South Africa's AML legislation contains specific references to aiding or assisting another party to commit a money laundering offence, and renders this conduct an offence as well; see 3.13 Money Laundering for further detail.

Section 21 of PRECCA (South Africa's corruption legislation) provides that a person who conspires with any other person to commit an offence in terms of PRECCA, or who aids, abets, incites, instigates, instructs, commands, counsels or procures another person to do so, is guilty of an offence.

POCA and FICA are the two statutes that primarily govern South Africa's AML framework.

The primary purpose of POCA is to combat organised crime, money laundering and criminal gang activities. POCA prohibits two main money laundering offences:

• general money laundering offences involving the proceeds of any unlawful conduct; and
• offences involving proceeds from a pattern of racketeering activity.

In broad terms, a person commits a money laundering offence under POCA if that person knows, or ought reasonably to have known, that property is, or forms part of, the proceeds of unlawful activities, and enters into any transaction, agreement or arrangement, or performs any other act in connection with such property, that has or is likely to have the following effects:

• concealing or disguising the nature, source, location, disposition or movement of said property or the ownership thereof, or any interest that anyone may have in respect thereof; or
• enabling or assisting any person who has committed or commits an offence, whether in South Africa or elsewhere, to:
1. avoid prosecution; or
2. remove or diminish any property acquired directly or indirectly as a result of the commission of an offence.

A person who uses or has possession of property and knows, or ought reasonably to have known, that the property forms part of the proceeds of unlawful activities of another person may also be liable under POCA.

FICA established the Financial Intelligence Centre in order to combat money laundering and the financing of terrorism and related activities. In order to combat money laundering, FICA imposes a number of compliance obligations on certain persons and organisations, particularly those that fall within FICA’s definition of “accountable institutions” and “reporting institutions”.

The principal obligations that these institutions are required to comply with include:

• identifying and verifying the identity of new and existing customers;
• retaining records of the identities of clients and transactions entered into with clients;
• reporting irregular transactions to the Financial Intelligence Centre; and
• training staff and implementing internal controls.

Accountable institutions are also required to develop and maintain AML and counter-terrorist financing risk-management and compliance programmes.

Although the reporting obligations under FICA relate primarily to accountable or reporting institutions, there are certain instances where non-accountable or non-reporting institutions are required to file reports with the Financial Intelligence Centre in terms of Section 29 of FICA – eg, when a person who is in charge of or manages a business knows or suspects that the business has received or is about to receive the proceeds of unlawful activities or property that is connected to an offence relating to the financing of terrorist and related activities.

Due to serious AML and counter-terrorist financing deficiencies, South Africa was placed on the FATF grey list in February 2023. South Africa has committed to resolving these deficiencies under the observation of the FATF, which will ultimately result in the tightening of AML controls in South Africa.

Section 34A of PRECCA offers a defence to the new offence of “failure to prevent corrupt activities” if it can be demonstrated that adequate procedures to prevent corruption were implemented. However, what constitutes “adequate procedures” and the specific requirements for companies are yet to be defined by the courts or regulations (see 3.3 Anti-bribery Regulation).

From a reporting perspective, a person charged with certain offences under POCA may raise the defence that they reported the knowledge or suspicion of the offence in terms of Section 29 of FICA.

There is no minimum amount for a white-collar crime to be deemed a crime. For example, PRECCA does not prescribe a minimum threshold stipulating what constitutes a corrupt payment or benefit. Furthermore, facilitation payments are not permitted in South Africa and are illegal.

South Africa's corruption legislation contains an onerous reporting obligation. Failing to report certain offences in excess of ZAR100,000 is a criminal offence (see 3.13 Money Laundering).

As mentioned in 2.6 Deferred Prosecution, the NPA recently introduced directives for Corporate ADR, which is similar to Deferred Prosecution Agreements that are implemented in other jurisdictions, as a means of settling with prosecuting authorities.

Section 204 of the CPA provides for instances when a prosecutor puts forward a witness who gives self-incriminating evidence in return for a discharge from prosecution, provided that certain requirements are met (most importantly, that the court is satisfied that the witness' answers are frank and honest). Section 204 immunity arrangements are done by agreement with the prosecutor before the witness gives evidence. Section 204 immunity can only be granted to individuals (not companies).

South Africa's Competition Commission has adopted a leniency policy in order to encourage participants in cartel conduct to make disclosures to the Competition Commission in accordance with Section 49E of the Competition Act.

Under Section 105(A) of the CPA, an accused party may negotiate and enter into an agreement with the state, prior to pleading to the charge brought against them.

In respect of corporate bodies, a plea of guilty will only be valid if the individual representing the entity is authorised to enter into such a plea agreement.

A prosecutor may enter into a plea agreement after consultation with a person charged with the investigation of the case, with regard to the following factors:

• the nature and circumstances of the offence;
• the personal circumstances of the accused;
• any previous convictions of the accused; and
• the interests of the community.

Where it is reasonable to do so, a prosecutor must also give the complainant the opportunity to make a representation regarding the content of the agreement and the inclusion of conditions relating to compensation. The court must satisfy itself that the accused confirms that they entered into the agreement and that the requirements of Section 105(A) of the CPA have been satisfied. Lastly, the court will consider whether the agreed sentence is just.

Although there are no particular incentives for whistle-blowers to report impropriety, certain legislation criminalises the failure to report corrupt conduct or suspicious transactions. Some, but not all, of these statutes also encourage whistle-blowers to come forward in light of the protection afforded to them under those specific statutes.

The Protected Disclosures Act 26 of 2000 (PDA) aims to encourage whistle-blowing in the workplace in both the public and private sectors. In this regard, the disclosure of certain categories of information by “employees” or “workers” to certain individuals who are specifically listed in the PDA are deemed to be “protected disclosures”. In particular, the PDA:

• protects employees from occupational detriment in circumstances where their disclosure is deemed to be a “protected disclosure”; and
• requires procedures to be put in place in the workplace, in order for the employee or worker to make the relevant disclosure.

Importantly, an employee or worker is able to elect to make the disclosure anonymously.

The PDA deems a disclosure to be a “protected disclosure” if it is made to the individuals or bodies designated in the PDA and if it relates to information that shows, or tends to show, inter alia, that:

• a criminal offence has been committed, is being committed or is likely to be committed;
• a person has failed, is failing or is likely to fail to comply with any legal obligation to which that person is subject;
• a miscarriage of justice has occurred, is occurring or is likely to occur;
• the health or safety of an individual has been, is being or is likely to be endangered; or
• any of the above has been, is being or is likely to be deliberately concealed.

Employers are able to tailor their own policies to encourage whistle-blowers to come forward.

A discussion document proposing reforms to the whistle-blower protection regime in South Africa was published on 29 June 2023. The purpose of the document is to:

• expand the scope of the PDA to encompass a wider range of relationships;
• ensure that adequate resources, protection and support are given to whistle-blowers; and
• give the Human Rights Commission authority to address protected disclosures.

The discussion document also examines arguments for and against the provision of financial incentives for whistle-blowers.

FICA places an obligation on individuals and entities to make reports to the Financial Intelligence Centre, including reports of suspicious and unusual transactions. Section 38 of FICA provides protection to entities and/or individuals making reports under the Act. In particular, it states that no action, whether criminal or civil, lies against an accountable institution, reporting institution or any other person complying in good faith with a provision of FICA.

FICA does not provide for the protection of individuals in terms of anonymity; however, the Financial Intelligence Centre does have a duty to ensure that appropriate measures are taken in respect of personal information in its possession or under its control.

Section 107 of the Consumer Protection Act states that it is an offence to disclose any personal or confidential information concerning the affairs of any person obtained as a result of initiating a complaint or participating in any proceedings under the Consumer Protection Act.