The National Director created the AFU in order to ensure that the powers in the Act to seize criminal assets would be used to their maximum effect in the fight against crime, and particularly, organised crime.

Willie Hofmeyr was appointed as a Special Director of Public Prosecutions and Head of the AFU in May 1999.

In recognition of the growth and increasingly important role played by the AFU, it became a full division of the NPA in 2001.

As a result the Head of the AFU became a Deputy National Director and Ouma Rabaji was appointed as Special Director and Head of Operations of the AFU.

The AFU set itself a number of key strategic objectives:

1. to develop the law by taking test cases to court and creating the legal precedents that are necessary to allow the effective use of the law;
2. to build the capacity to ensure that asset forfeiture is used as widely as possible to make a real impact in the fight against crime;
3. to make an impact on selected categories of priority crimes;
4. to establish a national presence;
5. to establish excellent relationships with its key partners, especially the SAPS, DSO and SARS;
6. to build the AFU into a professional and representative organisation.

When the AFU started international experts warned that it should expect much litigation from rich and powerful criminals who are desperate to hang on to their ill-gotten gains and who can afford to employ the best legal brains in the country to try to find any possible weakness or lack of clarity in the law or exploit technicalities in existing civil procedure.

This has indeed proved to be the case and the AFU has been involved in intensive litigation since its inception.

The complexity of the work of the AFU is illustrated by the fact that it is at present litigating about 30 different legal and procedural issues, apart from a host of constitutional issues.

Only a few of these issues have been settled in the 2 Constitutional Court and 5 Supreme Court of Appeal judgements to date.

However, the AFU has obtained over 60 High Court judgements which has helped to clarify many parts of the operation of the law, albeit not finally.

A major change over the past year has been a very significant increase in the success rate in cases where judgements were obtained.

Since its second year of operation, the AFU has managed an overall success rate of 85%. However, in those cases where judgements were obtained its success rate was much lower at 44% (21 of 48 judgements).

During the current year the AFU won 19 of 23 cases, a success rate of 83%

The most significant cases decided or litigated during the past year are the following:

The second and final Constitutional Court in Yasien Mac Mohamed case was delivered early in the year, and a full report is contained in the previous annual report.

The judgement ended the uncertainty about whether the AFU can proceed ex parte. This has enabled the AFU to meet its targets for the year.

The AFU won two vital Supreme Court of Appeal matters in the past year.

In the Phillips case in Johannesburg involve the seizures of some R40 million worth of property from the owner of the largest brothel in the country. The SCA confirmed a High Court ruling in favour of the AFU on a large number of constitutional and other legal issues. The SCA ruling also gave a favourable ruling on what constitutes sufficient evidence to obtain a freezing order.

In the Kyriacou case the SCA overturned a High Court ruling against the AFU. He was a prominent Bloemfontein businessman who was convicted of over 100 counts of being in possession of millons of rand of stolen property in his warehouses. All the stolen property had been seized by the police, but the AFU had frozen all his entire estate worth R30 million on the basis that the "reverse onus" assumptions in the law that require him to prove which of his estate was acquired legitimately. The SCA ruled that assumptions can be invoked without the AFU needing to tender supporting evidence.

Three other matters have been argued in the SCA and judgement is awaited.

The 23 Gillespie St (Blenheim hotel) and RO Cook cases in Durban and Johannesburg involve "dirty" buildings seized by the AFU on the basis that they were being used for criminal purposes. They are appeals against High Court decisions that involved such a strict and narrow interpretation of what constitutes an "instrumentality" of an offence that it would render these provisions almost unusable. The decisions also apparently required criminal intent from the owner of the property.

The Seevnarayan case in Cape Town involved a businessman investing money under false names. The High Court adopted a very strict interpretation of POCA to exclude its application in tax cases.

Two other matters remain to be argued in the SCA.

In the Rautenbach case in Johannesburg the court came to a different conclusion from that of an earlier court despite the fact that the same facts and legal argument were essentially presented on both occasions. The AFU is appealing several rulings on the law and the facts, as well as a subsequent ruling that assets could not remain frozen pending the appeal

In the Phillips case the High Court set aside the restraint order on the basis that the curator bonis could not look after the property properly as he did not have sufficient funds, and the state was not able to assist. Leave to appeal was granted.

In the case of Hoosain Mohammed (who allegedly defrauded accident victims in RAF matters of nearly R10 million) a full bench of the High Court ruled in favour of the AFU in a challenge to the constitutionality of the section of POCA that provides that the accused must disclose their assets and income under oath before he can claim legal expenses. Leave to appeal was refused.

Partly as a result of the Yasien Mac Mohamed judgement, similar constitutional challenges were raised in a number of other matters. Only those in the Levy and Cole and Davis cases in the Witwatersrand Local Division are still being pursued.

In the Phillips case, a new constitutional challenge to chapter 6 of POCA was also filed after his constitutional challenges to chapter 5 and to various sections of the Sexual Offences Act had been dismissed.

These matters have not yet been argued.

At the request of the Parliamentary Justice Committee the AFU has also undertaken a review of the Act.

A number of areas have been identified where the law should be clarified or strengthened and amendments have been prepared and submitted to the Department. It is hoped that they can be passed by Parliament in the second half of the year.

Draft regulations have been approved by the Minister to specify the maximum legal expenses that may be paid from assets preserved in terms of chapter 6, and await the signature of the President.

As can be seen from the first column of the table below, over the past 5 years the AFU has frozen assets valued at nearly R700 million in terms of nearly 500 orders that have been sought.

Thus far 243 forfeiture orders have been granted applications involving R116 million have been finalised.

The shift in emphasis from doing mainly test cases towards rolling out a greater volume of cases is reflected in the table below which compares the work of the AFU in its first four years, as well as the targets that the AFU has set for itself for the current year.

The AFU has achieved exceptional growth.

The number of new cases have grown at a rate of 65% pa over the 4 years, and the value of the cases by 25% pa.

The table also reflects the special effort made by the AFU to increase the number of completed cases. These increased from 73 to 116, while the amount involved increased from R15 million to R48 million.

As can be seen from the last column, the AFU has again set itself the ambitious target to maintain this rate of growth, and it once again intends to increase significantly what was achieved over the last year.

In addition, the AFU has managed to maintain a high quality of work, which is vital at a time when an important emphasis is still to do test cases. This is reflected in a high success rate that is still above the target figure of 85%.

Although the success rate during the past year declined somewhat from the previous year, this was in line with a strategic decision taken by the AFU. It was decided that in order to increase the volume of cases somewhat more risks could be taken than in the past.

A large number of complex issues, however, remain to be settled, and it is natural that the AFU will not succeed in all cases.

An important focus of the work of the AFU has been to ensure that the assets are returned to the victims of the crime. Assets are only forfeited to the state when there is no victim, and it will be seen that the bulk of finalised cases involved victims.

Roughly half the assets frozen by the AFU will eventually be returned to the victims of the crime. In total, over R100 million has been returned to victims of a crime.

In two of its most important matters to date, the AFU has also seized property worth more than R10 million from Cape Town attorneys Mohammed and Chohan who had allegedly defrauded poor accident victims of their money.

Thus far the AFU has done roughly 47% of its cases in terms of chapter 5 and 53% in terms of chapter 6. The chapter 5 applications tend to be used in the bigger matters, and about 80% of all assets frozen have been in terms of chapter 5.

Although the table below is not comprehensive, it gives an indication of the kind of cases done by the AFU thus far.

Each of these areas will now be discussed in more detail.

One of the major aims of the AFU is to seize large cash amounts that are associated with the drug trade. In co-operation with the SAPS about 6o such cases have now been initiated involving about R10 million. The procedure for these cases is now fairly settled and thus it is anticipated that a large number of these cases will be done this year.

A number of test cases were launched against known drug houses, especially in the Cape Town area. In addition, the AFU has acted against two hotels that were identified as being at the centre of criminal operations in Hillbrow and Durban.

As discussed earlier, the issue of what constitutes an instrumentality of crime as envisaged in POCA is still being heavily litigated and the AFU is awaiting 3 SCA judgements on the issue. It may be necessary to seek a legislative amendment to clarify the meaning of this section.

A new focus for the AFU has been collaboration with SAPS, the DSO and the Department of Environmental Affairs and Tourism to deal with the serious threat to our natural resources, especially abelone. These activities have spanned the entire country, from Cape Town to Bloemfontein, Johannesburg and Pretoria.

Nearly 50 matters have now been done, involving property worth nearly R70 million.

The Eagle Star, a large trawler forfeited in the Hout Bay Fishing matter, was sold at a reduced price to Marine and Coastal Management for use as a marine patrol vessel. Earlier this year it was used to arrest another trawler fishing illegally in SA waters. This vessel, worth millions of rand, is also to be forfeited in terms of conservation legislation.

The AFU is involved in a number of initiatives to ensure that action is taken against some of the top organised criminals in the country, and it has set itself some targets for the number of cases to be instituted in the coming year.

A further priority has been to deal with corrupt officials. About 11% of the cases taken up by the AFU involved corruption, and asset forfeiture has proved to be a powerful tool against corrupt officials.

In addition, the AFU has been part of the Joint Anti Corruption Task Team (JACT) that was set up in the Eastern Cape to deal with corruption. As a matter of policy, it was decided to do asset forfeiture in all matters where some assets were available. Nearly 30 restraint orders have already been obtained for about R8.5 million. Confiscation orders totalling over R1 million have already been obtained in the 13 finalised matters.

Serious economic crime remains a priority, especially to ensure that more effective action is taken in these cases.

This is vital in view of the worrying increase in organised crime activity in this area due to a perception that the rewards are high and risks are lows. The AFU has done a number of cases involving "419" and other sophisticated scams by Nigerian organised crime groups operating in the country.

The Brother Tobacco matter dealt with customs fraud and the importation of counterfeit goods on a massive scale.

The AFU has become involved in a joint project to deal with fraud arising from claims to the Road Accident Fund.

To ensure a greater volume of cases, the AFU has started to decentralise its activities. It has already established regional offices in Cape Town, Durban, Johannesburg and Port Elizabeth. In addition it has established a small presence in East London, Bloemfontein and Kimberley.

It is planned to establish a presence in the other provinces this year to ensure that asset forfeiture becomes more widely used throughout the country.

A major focus of the work of the AFU has been to build an excellent working relationship with SAPS, the DSO and other law enforcement structures. This is vital to ensure an increased flow of properly investigated cases to the AFU.

Thus far the AFU has enjoyed excellent cooperation from the SAPS and the DSO, and it is in the process of signing formal guidelines for future cooperation with both organisations that should ensure even better cooperation in future.

One of the most effective forms of cooperation has been the setting up of special SAPS task teams in each province. These teams consist of skilled detectives who specialise in working with the AFU and they report directly to the Head of Organised Crime in the province. This has ensured that cases come to the AFU well prepared and has lead to a significant increase in the number of cases being referred to the AFU.

An important feature of the past year has been the increased level of cooperation with the anti-corruption Special Investigating Unit (SIU). The SIU referred a number of matters to the AFU for action, and lawyers from the SIU are being trained to draft the necessary papers.

Once the basic test cases had been done, one of the major factors determining the effective use of forfeiture is the number of forfeiture specialists available to prepare and bring applications.

Due to the high priority accorded to the work of the AFU by the National Director, the AFU has been able to grow rapidly.

Overall, the AFU establishment grew from 76 to 91 staff, an increase of 20%. The establishment consists of 44 lawyers, 8 financial investigators, 1 accountant and 23 administrative staff.

The AFU has been granted funds by National Treasury to employ a further 12 staff in 2004/05, and recruitment will start soon to fill the positions.

Although more remains to be done to promote representivity, the AFU has made a special effort in this regard and is proud of the fact that groups designated in terms of the Employment Equity Act constitute 81% of AFU staff and 79% of management.

In particular, 68% of its staff are black (including 64% of management), 50% are African (including 29% of management) and 50% are female (including 50% of management).

A detailed breakdown is as follows:

Unfortunately it is too often true that crime pays, and the AFU believes strongly that to succeed in the war against crime, it must become true that "crime does not pay".

Thus the mission of the AFU is to take the profit out of crime, and it has made good progress towards this goal over the past few years.