Namibia, Zim tops curbing money laundering

 

Windhoek – Namibia and Zimbabwe are the only two African countries to be removed from the international targeted review process of countries with shortcomings in their National Anti-Money Laundering and Combatting the Financing of Terrorism regulatory environment.

This came up as a result of the Financial Action Task Force (FATF) Plenary meeting on February 26, 2015 in Paris, France which, upon recommendation by its International Cooperation Review Group, unanimously agreed that Namibia and Zimbabwe have effectively and efficiently executed all the agreed actions.

Commenting on the achievement at a press briefing last week, Bank of Namibia (BoN) Director  of Strategic Communications and Financial Sector, Ndangi Katoma said the FATF plenary meeting complemented Namibia for adopting the National Anti-Money Laundering, Combatting the Financing of Terrorism and Combatting Proliferation Financing (AML/CFT/CPF) Policy, Laws and Implementation Framework.

“This adoption not only effectively assists Namibia to protect her national and the international financial system against Money Laundering, Terrorism Financing and Proliferation Financing (ML/TF/PF) abuse, but also placed the country on an accelerated pace to comply with both technical and effectiveness criteria endorsed in the FATF 2012 Recommendations.

“Criminalisation of Proliferation and the financing thereof, also put Namibia amongst the first countries in the world who effectively contribute to international peace, democracy, security and stability in this regard,” he said.

Namibia is also the first African country and one of only few jurisdictions in the world which successfully conducted a National Money Laundering and Terrorism Financing Risk and Threat Assessment in 2012.

“This assessment enabled Namibia to develop laws, policies and cause resource allocations to address and mitigate high risk Money Laundering and Terrorism Financing areas. This further assists the country to protect its economy and citizens from the impact of financial criminal activities,” said Katoma.

In a public statement issued on Namibia, the FATF said it welcomes the country’s significant progress in improving its AML/CFT regime and notes that Namibia has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2011.

“Namibia is therefore no longer subject to the FATF’s monitoring process under its ongoing global AML/CFT compliance process. Namibia will work with ESAAMLG1 (Eastern and Southern Africa Anti-Money Laundering Group) as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.”

Katoma then said it is important for Namibia to ensure that the country does not allow financial crimes such as money laundering, corruption, terrorist financing and illegal drug trade to continue destroying the social fabric and to put the future of the children in jeopardy.

In doing this, the central bank official noted that Namibia recognised the importance of international cooperation in the fight against these financial crimes.

Zimbabwe made amendments last year to its laws to bring into effect stiffer penalties against money laundering and terrorist financing with convicted offenders facing fines of up to US$500 000.  

President Robert Mugabe early last year invoked the Presidential Powers (Temporary Measures) to amend the Money Laundering and Proceeds of Crime Act which saw penalties for serious offenders increasing from US$600 to a punitive US$500 000, in a bid to combat the abuse of the financial system. The new Statutory Instrument 2 of 2014 made several amendments which brought into effect stiffer penalties to curb money laundering and terrorist financing — a rampant white-collar crime which was stalking the country.

The changes to the Money Laundering and Proceeds of Crime Act were made to make the law compliant with the requirements of the Financial Action Task Force. The law is in line with the 1999 United Nations Convention for the Suppression of Financing of Terrorism.

Zimbabwe is a member of the Eastern and Southern African Money Laundering Group and is supposed to “apply anti-money laundering measures to all serious crimes and implement any other measures contained in multilateral agreements and initiatives to which member countries subscribe for the prevention of and control of laundering of proceeds of crime”.

Under Statutory Instrument 2 of 2004, section 5 of Chapter 9:24 (Directives may specify civil infringements and impose penalties and other sanctions) which initially set a penalty of level ten at US$600, were amended to fix the fine at US$500 000 while a level three penalty is now US$5 000 from US$20.

A fixed penalty of level five which was pegged at US$100 was reviewed to US$100 000 while level one fine changed from US$5 to US$5 000.

Subsection 8 (a) of Section 8 of Chapter 9:24 which initially provided that “by a fine not exceeding level fourteen or not exceeding twice the value of the property that forms the subject of the charge, whichever is greater,” was replaced by a provision which states that the fine shall not exceed US$500 000 or not exceeding twice the value of the property involved or the gain derived by the offender.

Zimbabwe passed the Money Laundering and Proceeds of Crime Act in 2013 which brought amendments to the Bank Use Promotions and Suppressing of Money Laundering Act, Building Societies Act, Criminal Matters (Mutual Assistance) Act and the Asset Management Act.

Under the anti-money laundering legislation, banks are empowered to “receive, analyse and disseminate suspicious transactions.”

Financial institutions can also scrutinise transactions by politicians and heads of State-owned firms to minimise any chances of money laundering and terrorism financing. The law also bars people from dealing with shell banks — a financial institution that has no physical presence in Zimbabwe.

However, it does not include a bank of description which is wholly owned by one or more financial institutions forming part of a regulated financial services group that is subject to effective consolidated supervision.

March 2015
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