HomeNewsFIC LATEST REPORT SHOWING CONTINUED TREND IN DUBIOUS DEALS

FIC LATEST REPORT SHOWING CONTINUED TREND IN DUBIOUS DEALS

The Fifth Money Laundering and Terrorist trends report by the Financial Intelligence Centre (FIC) has reviewed that Zambia incurred losses estimated at 6.1 billion Kwacha in 2018 from suspicious transactions.

In 2018, the Centre analysed 176 suspicious transaction reports linked to financial crimes such as tax evasion, fraud, corruption and money laundering activities of which 80 were disseminated to Law enforcement Agencies.

The report which was launched by the Attorney General  Likando Kalaluka, shows Corruption at top of the list of suspicious transactions involving 4.8 million kwacha followed by tax evasion at one billion kwacha, while theft and fraud represented 110 million and 54 million kwacha respectively.

This indicates an increase from the 4.5 billion recorded in the 2017 Financial Intelligence Centre reports representing a 30 percent increase mainly attributed to the escalation in the value of transactions related to corruption.

Speaking during the launch, FIC Director General Mary Chirwa said the 2018 Trends Report on Anti-Money Laundering/ Countering the Financing of Terrorism (AML/CFT) is intended to increase public awareness and understanding of Zambia’s AML/CFT regime.

‘’Given the socio-economic developmental challenges that Zambia faces, it is crucial that national resources are safeguarded and applied in accordance with the Government’s plans and priorities,’’ she said.

She said money laundering reduces government revenue and limits its ability to provide public goods and services such as education, health and other social amenities as laundered funds go untaxed.

She said the report indicates that Public Procurement activities were significantly vulnerable to corruption with certain specifications manipulated to disadvantage other bidders.

She added that the funds were laundered by the use of shell corporate vehicles and trusts (registered companies that are non-operational and do not have physical addresses), use of domestic financial institutions such as banks, Micro-Finance Institution’s, insurance companies and Pension funds.

She further said that FIC noted a high usage of gatekeepers including law firms and accounting firms in facilitating corrupt activities.

Nine law firms are said to have been involved in suspicious transactions amounting to 365 million kwacha in 2018.

The FIC observed a trend where companies connected to politically exposed persons (PEPs) were awarded public contracts despite not being registered with the Patents and Companies Registration Agency (PACRA).

The Intelligence Centre called upon professional bodies such as Zambia Institute of Chartered Accounts (ZICA) and Law Association of Zambia (LAZ) to effectively supervise institutions under their scope of influence to ensure that criminal elements do not hijack the operations of the supervisory bodies.

 

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