Transparency International Zambia (TIZ) president Rueben Lifuka has observed that government, through High Commissioner to South Africa Emmanuel Mwamba, is psychologically preparing Zambians to accept the rejection of the regional money laundering report when it comes out next year, just like Mauritius has done.
Mauritius’ Minister of Financial Services and Good Governance, Dharmendar Sesungkur has appealed to his Zambian counterpart, Margaret Mwanakatwe, last week to reject the regional Mutual Evaluation Report done by the Secretariat of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).
According to a letter dated June 25, 2018, and delivered to High Commissioner Mwamba, Mauritius strongly objected to the MER, requesting Zambia and other member-states to reject the report on grounds that it was inaccurate and incomplete.
But Lifuka noted that Mauritius was warning countries where culprits of financial crimes hide their proceeds in that country.
“I think by asking other countries, Mauritius are just setting up other countries to say ‘think carefully. A good number of you even hide monies here so some of these things that you are bringing out may come back to haunt you’. So yes, Mauritius are definitely playing into the hands of countries which utilise that country as a secrecy jurisdiction because of the nature of the financial system there. But it is the precedent that is worrisome. Let us look at the bigger picture. Mauritius is saying to the other countries, ‘reject the FIU report on account of these inadequacies and procedural improprieties to do with the FIU’,” he said.
“Change where there is Mauritius and put Zambia there. Zambia, we are due to start the on-site visits for the mutual evaluation June 2018 and our report should be tabled for evaluation in March 2019. I see Zambia doing exactly what Mauritius is saying. When that mutual evaluation report is ready, Zambia will say reject it because there are procedural improprieties. They have already started saying ‘we have an FIC which has been disseminating information without it going to the law enforcement agencies’, and that is why Mwamba is very eager to circulate this information because he is making parallels. Mauritius is saying ‘they have not been disseminating the information to competent authorities and yet these issues have already been investigated by law enforcement agencies.”
He observed that Mwamba’s intention was to prepare ground for Zambia’s case.
“Mwamba is drawing parallels, this is now to prepare Zambians for 2019 to say ‘no, we don’t agree with the mutual report. After all even last year we had a problem with FIC’. So that’s the bottom line and that is why this is a big story in so far as government is concerned. It is to prepare everyone for that rejection of the report because you see, this is what ZICTA was saying last time. Imagine today, the Eastern and Southern Africa Anti-Money Laundering Group, the team comes to Zambia today and they talk to CSOs, they talk to government entities, they talk to FIC, what do you think will be the inputs? Will they be favourable? No. Government has already figured out ‘we are going to be in trouble. Whatever we have done now, the assessment is going to be terrible’ So they are preparing everyone’s mind to say ‘we are not the only ones. Even Mauritius rejected this report’,” Lifuka said.
He also wondered why Mauritius did not correct any inaccuracies during the assessors during the evaluation process.
“However, the standard procedure, one would expect is that for government, firstly did Mauritius have an input in the mutual evaluation process? And if they did, why didn’t they correct any inaccuracies which would have been given by the FIU? Number two, the FIU is a creation of government. It is a creation of the laws of Mauritius and what government seems to be saying is that there are procedural improprieties making it look like this is not an entity which is within the government sphere. Number three, what would stop the Mauritian government from presenting, to the ministerial council their own version of issues so that it allows member countries to debate their mutual evaluation report within that context? This issue of lobbying without presenting any substantive different information doesn’t help matters. What Mauritius is doing affects the entire purpose of creating this body and this is a body that includes observers and other cooperating partners, the World Bank, IMF, we have COMESA, SADC in there,” he said.
And Lifuka went ahead to explain the composition of the Eastern and Southern Africa Anti-Money Laundering Group and how how the Mutual Evaluation Report is arrived at.
“We have got to be careful. This is a mutual evaluation report with all countries that ascribe to the Financial Action Task Force, FATF. The FATF is an independent intergovernmental body and their role is to develop standards around protecting the global financial system against money laundering, terrorist financing et cetera. Now the Eastern and Southern African group, the one which has been referred to, the one which did the report, this group in actual fact was established in 1999 by eight countries including Zambia. So Zambia is part of this and Mauritius was one of the original countries that were part of that and the group now comprises 18 countries but it also got other observers. What this group does is that it gave itself as an objective to implement what they call the 40 recommendations and among those is the need for mutual evaluation, a peer to peer evaluation. Assessing how each country is implementing the FATF recommendations. So you have countries agreeing that they are going to implement the FATF recommendations and we are going to monitor ourselves on how we are implementing these recommendations and we do these assessments through mutual evaluations,” explained Lifuka.
“So in the case of Mauritius, the way the process is, they have a six-month on-site visit. So for Mauritius, the process started last year. They have done the on-site evaluation and in doing the mutual evaluation, they talk to several stakeholders including the Financial Intelligence Unit of that particular country. Because they are looking at ‘how is the country positioned to promote and deal with issues of money laundering, terrorist financing? Do you have the laws? Do you have the infrastructure? Government support? They are looking at all that and a report is then prepared and it is supposed to be tabled for plenary discussions. Now, why is Mauritius appealing to Zambia? Mauritius is not just appealing to Zambia, it is appealing to everyone, all the ministers on the ministerial council not to accept their report because of whatever shortcomings that they have seen. If you have noted, they are saying it needs to be withheld until such a time that issues of impropriety and issues of quality are considered. But you see, they are now talking about their own internal problems. However, this is a mutual evaluation so they may not stop it in its tracks until the council has considered that.”