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Organised crime a playground for terrorist groups

SA a lower risk than US, UK and China.

JOHANNESBURG – An unholy alliance has developed between traditional organised crime groups and terrorist groups, according to Bernard Hotz, head of forensics at Werksmans Attorneys, who said organised crime and terror groups cost the global economy well over $1 trillion a year.

Addressing journalists in Johannesburg on Wednesday, Hotz said that terrorist groups often operate seemingly legitimate businesses to lend a veneer of respectability to their terrorist activities. While a range of institutions are vulnerable to processing organised crime and/or terrorist activity, “the companies with the biggest pockets are going to become the biggest victims,” Hotz said.

He advised that big organisations proactively invest in system protections, as well as verify that suppliers, customers and employees are bona fide. “Unless you take steps you can become a victim or unwittingly assist organisations you wouldn’t want to assist,” he warned.

SA a lower terrorist threat than US, UK

The latest Global Terrorism Index, places South Africa in 50th place out of 162 countries in terms of terrorist activity, with a risk rank of 3.04 out of 10. That is lower than a host of other African countries, as well as the United Kingdom (5.17); China (5.21); Greece (4.73); the United States (4.71); and Thailand (7.19).

The index notes that close to 18 000 people lost their lives to terrorism in 2013, a 61% increase from 2012.

Official road death figures, meanwhile, suggest that anywhere between 14 000 and 60 000 South Africans lose their lives on our roads annually.

The Road Traffic Management Corporation (RTMC) estimates that road accidents cost the South African economy a staggering R307 billion annually – a figure supported by the World Health Organisation and International Transport Forum.

Hotz, however, said that the financial risks from terrorist and organised crime groups are on the rise in South Africa. “Terrorist groups want to transact in regions where there is lawlessness, corruption, lack of accountability for transactions and lax control over borders,” he said.

Hotz said that government departments, such as the South African Police Service (SAPS) and Hawks, have limited intelligence capability due to the significant cost of funding these units. “The white-collar crimes handled by Werksmans should actually be handled by police,” he pointed out, noting that he had yet to see the Financial and Intelligence Centre Act (FICA), introduced to fight financial crime, translated into effective enforcement.

“Nobody must say crime doesn’t pay, crime is paying handsomely,” Hotz said.

Cost of cybercrime

The Institute of Risk Management South Africa’s (IRMSA) maiden South Africa Risks Report 2015 reveals that organised crime and cyber attacks are perceived by risk management professionals as having the fifth and sixth highest likelihood and potential consequence over the next two years, respectively.

In places one to four are corruption, unemployment, the failure/shortfall of critical infrastructure and political and social instability. Electricity and water crises are also mentioned.

IRMSA’s findings are based on a survey of 620 of the country’s top risk management experts, from firms in the public and private sector.

Nico Snyman, founder of Global Leaders Academy Africa and quoted in the report, said increasing corruption and a major escalation in organised crime and illicit trade go hand-in-hand.

Professor Adrie Stander, senior information systems lecturer from the University of Cape Town, said in the report that the risk of a large scale cyber attack is reduced in South Africa due to the country’s relatively neutral political position.

According to the Washington DC-based Centre for Strategic and International Studies (CSIS), cybercrime costs the global economy more than $400 billion annually.

In South Africa, it estimates that cybercrime as a percent of GDP costs the country 0.14% of its roughly R4 trillion GDP, below many developed nations. “Income levels are a good predictor of cybercrime, as wealthier countries (or firms) are more likely to be targets,” it says.

In its report, the CSIS notes that few companies provide information on cybercrime losses, with most incidents left unreported or even publicly denied. “Few of the biggest cybercriminals have been caught or, in many cases, even identified,” it says.

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