Guidelines for pricing control of South African mined products

Abstract

In recent year many billions of Rands have left South Africa. A large proportion of these funds can be attributed to entirely legal factors. However, a main conduit for capital flight is through the medium of foreign trade. The most common form of illegal currency transfer is known as transfer pricing abuse. The most effective way is to artificially under-value exported products.

This paper attempts to define the problem, identify the areas within the mined products marketing process in which transfer pricing abuse is most likely to be taking place and suggest a strategy of control.