7 November 2025 – The South African Revenue Service (SARS) issued summons for R5.3 billion against Sasfin Bank Limited (Sasfin Bank) in the Gauteng Division of the High Court, Pretoria on 22 December 2023. The claim relates to Sasfin’s alleged wrongful conduct in assisting taxpayers to illegally export funds out of the country. Sasfin noted legal exceptions to SARS’s particulars of claim in March 2024. The matter was argued in court on 9 October 2025. SARS welcomes the judgment delivered on 3 November 2025.
The court upheld Sasfin’s exceptions in certain respects and dismissed it in respect of others. The exception was upheld primarily on the basis that the court held that the statutory framework (comprising the Banks Act, FICA, and the Exchange Control Regulations) does not give rise to a private law duty of care owed to SARS or other creditors. This finding turns on a point of legal interpretation rather than pleading insufficiency. As part of its claim SARS seeks recognition of a novel common law legal duty: namely, a duty on authorised dealers not to cause SARS patrimonial harm by directly or indirectly facilitating the unlawful expatriation of undeclared taxable funds.
The exception was dismissed with respect of the element of causation and the objection to an alternative claim. SARS regards this as significant progress as the court confirmed that SARS has a statutory right of action under section 278 of the Financial Sector Regulation Act (FSRA) for losses suffered due to contraventions of financial sector laws. This dismissal of Sasfin Bank’s exception to SARS’s statutory claim, confirms that SARS’s alternative claim under the FSRA is properly pleaded and may proceed to trial. The judgment affirms a clear statutory remedy to pursue losses arising from breaches of financial sector laws by banks and other institutions.
This statutory remedy is a victory for SARS and, more importantly, for the South African public, as it strengthens the mechanisms available to hold financial institutions accountable for facilitating illicit financial flows. “I have consistently reminded financial institutions to go beyond a narrow compliance response when reporting questionable transactions to the Financial Intelligence Centre” says Commissioner Kieswetter, “and to manage the substantive risks posed by transactions that may be considered suspicious”. SARS will consider its options, including amending its pleadings as permitted by the Court, or to apply for leave to appeal of the judgment to the Supreme Court of Appeal. The judgment underscores the seriousness with which SARS approaches its responsibility to protect the South African fiscus and the broader public interest.
SARS views this judgment as a significant step in clarifying the legal landscape regarding the responsibilities of financial institutions and the remedies available to SARS.
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