I have to do some research on this but I would suspect that the objective is not to provide some control the commercial side of fragging and distribution of corals but more an ecological control to prevent/manage the possible spread of potentially harmful species that may be spread along with the frags. Not all laws are stupid and if you dig far enough there is usually a rational reason for the enactment of that law. What is problematic, especially here is SA, is the capacity for the enforcement of the laws that we have and the general lack of respect that many (most?) South Africans have for the law IMO.