Trade in Mukula trees increased last year despite the ban, with suspicious transactions linked to its illegal exports amounting to over K4.4 million, says the Financial Intelligence Centre (FIC).
And the FIC says there was also an increase in the number of personal accounts being used to deposit huge sums of money for business purposes in a bid to evade tax.
According to the Financial Intelligence Centre (FIC) 2017 Money Laundering/Terrorist Financing Trends Report, trade in Mukula trees continued rising last year, despite the ban government put in place back in 2015 to prevent rampant theft of the natural resource.
“We noted an increase in the number of currency transaction reports involving timber sales and they were mostly performed by individuals in regions where the prohibited Mukula tree is being harvested. This raised suspicion of Mukula traders declaring their sales as proceeds from other types of timber as opposed to Mukula tree. This was after the enactment of statutory instrument 91 of 2015, which prohibited the harvesting and export of Mukula tree,” the report read.
“During 2017, a total of K4,454,726.00 was reported as timber-related currency transactions reports. It was further observed that the deposits in the accounts of individuals involved in the timber trade were done by third parties, mostly of Asian and Zambian origin.”
And the FIC disclosed that there was also an increase in the number of personal accounts being used to deposit huge sums of money for business purposes in a bid to evade tax.
“The trend in the use of personal accounts for business purposes in order to evade tax, has continued. Through this act, Zambia has continued to lose revenue due to tax evasion by individuals and aggressive tax avoidance schemes implemented by large international corporations,” stated the FIC.
“The FIC carried out a special exercise on currency transaction reports to determine how much business proceeds were passing through personal accounts. The amounts were estimated to be K872 million and US $48 million. This is a continuing trend where individuals that transact on behalf of corporates receive large cash amounts and make these large deposits into individual accounts.”
The FIC trend reports contain intelligence information on money laundering and other serious financial crimes, which are made available for law enforcement agencies, such as the Anti-Corruption Commission (ACC) and Zambia Police Service, among others, who can then utilize it for successful arrests and prosecution of individuals found wanting.