Criminals have nowhere to hide, we are now in 160 countries – FIC

Financial Intelligence Center Director Clement Kapalu says with the FIC’s admission to the Egmont group of global financial intelligence units, criminals involved in money laundering practices in Zambia will have nowhere to hide.

He told News Diggers that citizens who are on the right side of the law will have nothing to worry about, but stressed that criminals have a cause to panic because the center will now follow all proceeds of crime stashed anywhere on earth.

In this verbatim interview, Kapalu outlines the benefits of Zambia’s admission to the Egmont group, explains how the center deals with frustrations from critics of interest and warns money launderers to be very afraid.

Question: What does this admission to Egmont group mean for Zambia?

Answer: The admission of Zambia to the Egmont groups of FIUs is a significant achievement in terms of development for the Zambian Financial Intelligence Center. To be admitted to the Egmont group takes a rigorous process where a country has to undergo serious assessment. We had three missions of assessors coming to Zambia to look at how the center operates and to satisfy themselves that we comply with the standards that they have set in order to be part of this prestigious group of institutions. They look at, standards of confidentiality, protocols on how you communicate information, the operational capacity and the quality of information that you gather.

Q: Explain what this Egmont group is all about?

A: It is an organization of FIUs in 160 out of about 200 countries in the world, and therefore if you have partnerships with 160 countries, you have taken a significant portion of the globe working with you.

Q: But what is there to be excited about? What will change in your operations?

A: In gathering Financial Intelligence, you will appreciate that crimes relating to money laundering and financing of terrorism activities have an international aspect. If there are proceeds of crime generated in Zambia, in terms of the money laundering process, they will most of the time find themselves outside the country, either permanently or those funds come back after a process we call layering which means washing the funds so that they are distant from the criminal source. There in now comes the importance of the Egmont group.
What this means now is that we are now going to be able to exchange information across these 160 countries. So if you have sent your fraudulently acquired money to Malaysia, it means from here, we will be able to connect with the data base of the Malaysian FIU and that gives us access to information. So the world becomes much more small, leaving [criminals with nowhere to hide]. That is going to significantly improve the effectiveness of the center.

Q: How were you working with these countries before this admission to the Egmont group?

A: We had been relying on bilateral arrangements though memoranda of understanding. For example, Zambia has an MoU with South Africa and we exchange information. Before this membership, we had MoUs with 18 countries, but the reach wasn’t that good. Other countries would not share the information with us.

Q: Let me simplify these questions for the ordinary person understand. So in other words you are assuring Zambians that with this admission, all these criminals in Zambia who are involved in money laundering will have nowhere to hide their money out there in the word?

A: That is exactly what this means. We will follow the money and report it.

Q: What if I hide my proceeds of Crime is Djibouti which is not a member of Egmont?

A: The MOUs with other countries outside this group will continue and we will have information gateways and still follow the money where ever it goes on earth. Sometimes we use Tax Treaties that Zambia has through the Zambia Revenue Authority and the tax authority of that country. This is good for Zambia, if you are on the right side of the law, you must celebrate this, only when you are not clean should you be very worried.

Q: We have heard critics of your work, including former Finance Minister Alexander Chikwanda say that your Financial Trends reports are full of sensation, why do you add salt and tomato to make your reports exciting to the public?

A: We have heard such sentiments. We are a democratic country and people have divergent views. In a layman’s language, we simply follow the money. In following the money, there is no room for sensationalism. There is no room of what they are calling raw and unverified data. If I am giving you my report, I am telling you that the money moved from here to there. Most of the times we have more than just a story, we are able to demonstrate to you how that money moved. When you see a financial matrix in the Trends Report that is given to the public, that is a very censored depiction of what happened. We do that deliberately so that we don’t compromise sources or jeopardise the case.

Q: So what you give the public is not the full story?

A: No it is not. The report that goes to law enforcement is deeper, it will have names of real persons and companies and real transactions. We would not be in business for long if we tried to be sensational. Credibility is everything in what we do.

Q: But who provides oversight over you guys at FIC to make sure that you are not fighting personal battles?

A: The FIC board is appointed by the President, and then the board appoints the Director General. So if the appointment of the board is political and the FIC is doing a bad job, then the board can be dissolved. So there is serious administrative accountability in the governance of the FIC. In terms of operational autonomy, that is guaranteed by the law everywhere else in the world.

Q: But are you autonomous enough here in Zambia.

A: When the first assessment was done on the FIC in Zambia [by the Egmont group], there were concerns that the center was not sufficiently autonomous, and in 2016, there were amendments to the law to specifically deal with those issues. And when the next assessment was done there was an agreement that we now meet the international standards that give us that autonomy.

Q: Which citizens can’t the FIC investigate? Can you investigate powerful people like the President?

A: What will be helpful is to understand how we get our subjects for investigations. We have institutions that the law has identified as reporting entities, and then we have institutions that are under law enforcement, such as police, DEC and ACC. Reporting entities file reports of suspicious activities to the FIC. Once those reports are filed, our obligation is to enquire into them. So we don’t pick or choose people who we want to investigate.

Q: But if such a file is about the President receiving suspicious money in his account, can you investigate and add that information in your reports?

A: If a bank thinks such a person has done something suspicious, they report. The obligation we have is to simply investigate and surrender our findings to law enforcement who then decide how to proceed depending on the nature of the suspected crime.

Q: We have seen that sometimes you send over 200 cases to law enforcement but only six or so reach prosecution stage, and that gives credence to the narrative that you people just sit in this board room and concoct figures to appear as though you are working. Doesn’t that frustrate you?

A: We try not to be emotional about what we do. Our job is simply to follow the money. We have been capacitated enough to perform our mandate. This institution is well resourced with professionals in terms of financial literacy and the law. We have a diverse portfolio. So once we disseminate the reports, it ends there for us. If you go to law enforcement, they will tell you how they prioritise their case load. They may tell you the challenges in terms of resources, but we can’t speak for them. We just do our part.

Q: Just in October, the President’s spokesperson Mr Amos Chanda projected that their would be a reduction in the financial crimes incidences in your 2018 Trends report owing to public awareness, how does State House know this, have you submitted the next report to the President which has given them that impression?

A: I can’t relate to the specific statement that you have referred to, but commenting on the 2018 report, we have only just started working on it, and what is in there, I am in no position to reveal to the public.

Q: Unless there is anything that you may like to add, I want to thank you for the interview.

A: Just to thank you also for your service to the country, we are very keen followers of your paper and we frankly think that the quality of journalism that is coming out of News Diggers inspires a lot of people.

Q: Thank you very much for the compliment.

A. Thanks

         

Comment on article

Comment on article:

  Subscribe  
Notify of

Send this to a friend