ESAAMLG report has exposed DEC, ACC

Revelations by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) that law enforcement agencies in Zambia actually rely on facts passed on to them by the Financial Intelligence Centre (FIC) to prosecute money laundering cases makes very interesting reading.

Not only that, according to the report released by the ESAAMLG last Friday, these law enforcement agencies who include the Drug Enforcement Commission (DEC) and the Anti-Corruption Commission (ACC), use the FIC-prepared typologies and Trends Report to design their annual operational objectives.

That’s not all; we are told by this regional African body of anti-money laundering agencies that the two most important reasons why the Zambian Financial Intelligence Unit was admitted to the Egmont group of 160 international Financial Intelligence Units is because, one, it has demonstrated that it operates independently and autonomously, and two, because it consistently releases typologies and Trends Reports.

This makes interesting reading because this is not the picture that the law enforcement agencies and our government officials are painting. The narrative portrayed to the public is that the FIC is a nuisance organization that is causing inconvenience and annoyance to innocent citizens. There is very little that those who speak on behalf of government have told us about the importance of this organization. There is very little that those who lead law enforcement agencies have told us about how much they rely on this organization.

But the truth has come from abroad to shame those who are not only criticizing the Financial Intelligence Centre, but also threatening its award-winning Director-General Mary Chirwa. Let’s take interest to review the findings of the assessment conducted by the ESAAMLG assessors on the operations of the FIC and Law Enforcement Agencies (LEAs) in Zambia.

1. During assessment, 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 a mechanism to obtain feedback on the status of the disseminations made to the LEAs.

2. 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.

3. 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.

4. 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.

5. Previously, Zambia was rated Non-Compliant with requirements of Recommendation 29. Some of the main technical deficiencies were that: the AMLIU (under DEC) 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.
6. 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 Analysis, 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.”

We are surprised by the turn of events. Whilst during the assessment, DEC, AMLIU, ZRA, ACC and Immigration Department praised the FIC on the publication of Money Laundering and Terrorist Financing Trends Reports, today, the DEC is telling the public that it is not pleased with the Trends Reports that FIC produces. Where is the integrity of the DEC boss?

As can be seen from the findings above, it should not surprise anyone why intellectuals, such as lawyers who are supposed to promote good governance and fight crimes, are in the forefront discrediting the works of the FIC! This is because they have been heavily implicated in cases of abetting financial crimes. FIC is a hindrance to their “Pamela lifestyles” and get-rich-quick schemes.

In our view, this Mutual Evaluation Report on Zambia published by the ESAAMLG has vindicated the operations of the FIC. The Centre, indeed, operates within its mandate and adheres to the international standards on money laundering matters. All well-meaning Zambians should, therefore, support the FIC in its current form; no law must be changed to misdirect them. If it’s not broken, don’t fix it!

         

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