The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) says, in its latest June report that Law Enforcement Agencies (LEAs) in Zambia depend of intelligence information gathered by the Financial Intelligence Centre (FIC) to investigate and prosecute money laundering cases.

And according to the ESAAMLG report released Friday, any changes to the law establishing the FIC may relegate the Centre to a similar compromised capacity as that of the Anti-Money Laundering Investigations Unit (AMLIU) which did not release periodic reports to guide on trends and typologies of criminal activities.

The bulky report published on detailed the finding of the FIC assessment team which also met law enforcement agencies during the recent visit to Zambia.

“The LEAs rated highly the quality and usefulness of the financial intelligence received from the FIC. To some extent, the LEAs have used the financial intelligence to investigate money laundering cases. The FIC and the LEAs use bilateral and group structures as mechanism to obtain feedback on the status of the disseminations made to the LEAs,” the report read in part.

It stated that law enforcement agencies in Zambia sometimes rely on the information contained in the FIC trends report to design their annual operational objectives.

“The FIC has produced Quality typologies/trends reports for over four years that focused on prevailing and emerging money laundering and terrorist financing risks in the country. Both the LEAs and other stakeholders expressed usefulness of the reports in relation to understanding money laundering and terrorist financing risks and application of mitigating controls. LEAs largely have all the powers to carry out financial investigations, however not all pursue such investigations with the commencement of investigation of every illicit proceed generating crime.”

Meanwhile, the Eastern and Southern Africa Anti-Money laundering group observed that the legal profession in Zambia is vulnerable to misuse for money laundering.

“The legal profession in Zambia is also vulnerable to misuse for money laundering risks mainly due to its involvement in activities exposed to a high money laundering risk (e.g. real estate transactions, creating legal persons and arrangements on behalf of clients). Other entities vulnerable to laundering of cash include casinos, precious stones and metal dealers, and second-hand motor vehicle dealers,” stated the regional body.

“Zambia still faces a risk of the offences identified to be high risk as the investigations and prosecutions being done are not consistent with the high risk offences identified. The authorities have also not come up with policies and strategies to guide investigations and prosecution of the high risk offences and how provisional and confiscation measures relating to these illicitly generated proceeds should be prioritised as an objective.”

In terms of effectiveness, the report stated that the FIC had been able to score successes because of the established law which allowed it to operate independently, compared to the AMLIU under the Drug Enforcement Commission which was considered non-compliant to regional and global standards of a Financial Intelligence Unit.

“Previously, Zambia was rated Non-Compliant with requirements of this Recommendation. Some of the main technical deficiencies were that: the AMLIU did not have sufficient operational independence or autonomy; the AMLIU did not serve as a national centre for receiving, analysing and disseminating disclosures for STRs and other
relevant information concerning money laundering as required under the Egmont definition of a Financial Intelligence Unit; AMLIU did not have adequate procedures to secure and protect information under its custody; AMLIU did not release periodic reports to guide on trends and typologies of criminal activities; AMLIU not
seriously considering applying for Egmont Group membership,” read the report.

“The Zambia FIC is established under Section 3 (1) of the FIC Act, No. 46 of 2010 (as amended). It is an administrative type Financial Intelligence Unit, legally independent and autonomous, headed by a Director General who has five directorates immediately under her office, (namely, Monitoring and Analyis, Compliance, Legal, ICT and Finance & Administration). The offices of the FIC are housed exclusively in a detached but secure and discrete building complex. It is the centre for receipt and analysis of suspicious transaction reports and other information relevant to money laundering, associated predicate offences and terrorist financing; and for the dissemination of financial intelligence. It is empowered to carry out all the core functions of an FIU The Centre is empowered under the FIC Act to receive disclosures for Wire Transfers.”