Transparency International Zambia chapter president Rueben Lifuka says calls to amend the Financial Intelligence Centre Act are misplaced as the institution actually needs additional funding enhance its analytical capability.
And Lifuka says citizens must instead debate whether Law Enforcement Agencies have the requisite capacity to attend to the financial intelligence and other reports churned out by FIC.
Commenting on the Mutual Evaluation Report on Anti Money Laundering and Countering Terrorism Financing measures in Zambia by the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG) in response to a press query, Lifuka said it would be amiss for President Edgar Lungu not to take the report seriously.
“Transparency International Zambia welcomes the publication of the Mutual Evaluation Report on Anti Money Laundering and Countering Terrorism Financing measures in Zambia by the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG). This is a timely development particularly coming at a time when the nation is gripped with unnecessary debate and attempts instigated mainly by Politically Exposed Persons (PEPs) and political cadres who feel threatened by the work of the Financial Intelligence Centre and therefore seek to jettison the relevance and importance of this entity. We continue to witness unprecedented levels of attacks not only on the FIC but the Director General and in the process, the whole essence of why this institution was set up is lost in the political noise being generated by people including Government leaders who should ideally be the bulwark against such baseless attacks on the FIC. The Mutual Evaluation Report provides an objective analysis of the state of play for Anti Money Laundering and Countering Terrorism Financing and it will be amiss for Government and especially President Lungu and his team not to take this report seriously and carefully consider the recommendations provided,” Lifuka stated.
“The Report confirms a matter of serious concern that the five highest proceed generating predicate offences are corruption, tax evasion, fraud and drug trafficking. We carefully note that authorities (including government) in the National Risk Assessment conducted in 2017, identified corruption as one that generates the highest amount of criminal proceeds among all predicate offences and the resultant money laundering threat that this brings.”
He stated that FIC needed additional funding.
“We concur with the recommendations made in the report that Government, instead of denigrating the work of the FIC, should instead seek to provide additional funding and support to it and thus enable it enhance its analytical capability which is essential to support the pursuit of complex financial crimes. Similarly, Government should work towards improving the capacity of Law Enforcement Agencies in using the financial intelligence from the FIC to pursue criminal proceeds and Terrorism financing,” Lifuka stated.
And Lifuka urged citizens to debate whether law enforcement agencies had capacity to attend to the financial intelligence churned out by FIC rather than be distracted by talks on chatter about FIC publishing ‘raw data’ to the public.
“In the debate that has ensued in the recent past, there has been a focus on the typologies and trends report of FIC and we have heard spurious attacks and strange reasoning which are purposively intended to scuttle the sad revelations of the emerging patterns of large and unusual cash deposits, corruption, tax evasion among others. Opponents of the FIC have dubiously assigned the Trends Report a role which it is not intended to play namely serve as an intelligence report despite the explanation by FIC that it provides further and better particulars through the detailed financial intelligence and operational analysis reports which it avails to Law Enforcement Agencies. We find it concerning that the general public have been made to debate the notion of the so called “release of raw data which might jeopardise investigations”, instead of debating whether the Law Enforcement Agencies have the requisite capacity to attend to the financial intelligence and other reports churned out by FIC,” he stated.
“Despite this public condemnation of the FIC, which the Drug Enforcement Commission equally lent its weight to this debate, the Mutual Evaluation Report highlights the Law Enforcement Agencies including the DEC as well as reporting institutions expressed usefulness of the Trends Reports in relation to understanding Money Laundering and Terrorism Financing risks and applications of mitigating controls. Again, this is the folly of those who do not like what they read in the FIC Trends Report trying to essentially pour scorn on a report whose importance is far reaching.”
Lifuka said it was worrying that some law enforcement agencies still did not have privatisation mechanism to investigate and prosecute crimes that had been identified to pose money laundering and terrorism financing risks.
“We should be worried with the finding that Agencies like the Anti Corruption Commission, Zambia Police Service and National Prosecutions Authority still do not have privatisation mechanism to investigate and prosecute crimes that have been identified to pose money laundering and terrorism financing risks. It should be a matter of urgent action to address the finding that the legal profession in Zambia is vulnerable to misuse for money laundering notably due to its involvement in activities exposed to high money laundering risk especially in real estate transactions. The rise of casinos – particularly on-line gambling, precious stones dealing as well as second hand vehicle dealing, which have been cited as poorly regulated, should preoccupy government rather than seeking to water down the law for the FIC simply because some in the corridors of power are sitting uncomfortably at the mere mention of trends affecting Politically Exposed Persons,” he stated.
“As Transparency International Zambia, we are particularly worried that the report notes that there are not many Money Laundering cases arising from corruption being prosecuted by the ACC. We are perturbed by the finding that in 2017, the FIC disseminated 822 cases to various Law Enforcement Agencies and yet only 4 of these cases were under investigations. We have also read with concern the low requests to FIC for information to support ongoing cases by the Law Enforcement Agencies. The question which has been missing in this current debate is indeed whether the Law Enforcement Agencies – some of whom are now peddling political lines, really have the necessary technical and institutional capacity to attend to the various crimes and predicate offences that could lead to money laundering and terrorism financing.”
He urged President Lungu to support the FIC.
“Going forward, we want to urge Government and specifically President Lungu to show support for government agencies if these are to excel in their work…Instead of diluting the functions and responsibilities of the FIC, we want to urge government to holistically address the weaknesses in the Anti Money Laundering and Countering Terrorism Financing regime as highlighted in the 2017 National Risk Assessment as well as this ESAAMLG Mutual Evaluation Report. It does not serve this country well to be inconsistent in how it tackles important issues like this and we cannot be changing laws at a drop of a hat merely to respond to the spectacular paranoia of a few – some of whom may actually have cause for concern because of their involvement in unscrupulous activities such as corruption, tax evasion and money laundering,” stated Lifuka.
“Government and all stakeholders should give the necessary latitude to entities like FIC, ACC, DEC, Zambia Police Service etc to do their work without unnecessary political pressure. The talk about reforming the law governing the FIC is totally unnecessary and misplaced. We should focus on the bigger picture of strengthening the policy and legal framework for Anti Money Laundering and Countering Terrorism Financing.”