FIC releases 2017 ‘money laundering’ report

FIC releases 2017 ‘money laundering’ report

The Financial Intelligence Centre (FIC) is increasingly taking centre stage in the fight against corruption.

But little is known about this institution.

Let us take a look.

The Financial Intelligence Centre calls itself as the supervisor of last resort and was created by the Financial Intelligence Centre Act No. 46 of 2010.

As a sole statutory agency, it’s expected to be dedicated to providing timely, high quality, impartial and actionable financial intelligence to eliminate financial crimes.

In 2016, the Financial Intelligence Centre was designated as a lead agency to coordinate the national risk assessment process together with other law enforcement agencies, ministries, reporting entities to identify and understand the money laundering and terrorist financing risks and recommend risk based approach to mitigate the risks.

The Chief Executive Officer/Director General is appointed by the Board and approved by the Minister of Finance.

The current holder as DG is Mary Chirwa-Tshuma, a former official at the Drug Enforcement Agency (DEC).

Sources of Information.

Banks

Banks are obligated to provide within 3 working days, to the FIC any money transferred locally and abroad above the threshold of $10,000.00 as prescribed by SI NO 52 of 2016.

 

The details provided are:

1.     Identify and verify the originator

2.     Account number (or reference number) of the originator and recipient

3.     Originators address, national identity number

4.     Payment instructions and purpose of payment.

For those leaving the borders should declare any amount above $5,000.00 to the customs official or risk such funds to be forfeited.

The FIC has just published its annual “Trends Report for 2017’ documenting what is prevailing in the Financial Systems in Zambia.

Summary of 2017 Trends Report

The report has exposed rising incidences of concern related to Direct Bidding, unregistered businesses given contracts, non-tax compliant companies given contracts, poor workmanship and lack of value for public money, abandoned works, financial transactions without business rationale, abnormal large cash payments and use of designated non-financial business and professions.

1.     Tax Evasion and possible violation of the Income Tax Act- K3.9Billion

2.     Possible violations of the Penal Code and Proceeds of Crime Act- K500million

3.     Money Laundering –K90.5million

4.     Fraud –K3million

5.     Fraud –K4.5million

Five cases were under prosecution, twenty-three under investigations and one conviction.

Large and Unusual Cash Deposits- Cash related transactions and bulk deposits amounted to K181,534,059-00

Corruption – Value of suspected corrupt transactions amounted to K6.3billion related to public procurement contracts.

Small Scale Mining- Foreigners failed to disclose K5billion worth of transactions. Foreigners also manipulated officials in a corrupt manner to change or take over existing mining licences,

Agriculture sector – individuals purport to trade in agricultural commodities but mix it with illicit funds for purposes of avoiding taxes and this amounted to K80,245,779.60

Procurement Corruption- FIC investigated 624 cases noted high increase in suspected corruption in relation to public procurement in government and quasi government institutions.

It also noted a collusion with Politically Exposed Persons(PEP), and management officials.

It also expressed worry at management decision to take away competition and value of tendering by engaging in Direct Bidding or single sourcing procurement.

Timber Transactions- the rise of timber sales and income from banned products especially in places where such resources exist

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