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Public Awareness

The Financial Intelligence Centre (FIC) has published the Annual Trends Report for 2019.

MESSAGE FROM THE BOARD OF DIRECTORS

On behalf of the Board and Management of the Financial Intelligence Centre (FIC) we hereby present the 6th Money Laundering and Terrorist Financing Trends Report for the year 2019.

The Report has been prepared in accordance with provisions of the FIC Act 2010 which empowers the Centre to educate and inform the public on money laundering and financing of terrorism and proliferation.

FIC is an integral part of an Anti-Money Laundering/Countering the Financing of Terrorism and Proliferation (AML/CFTP) Value Chain.  It RECEIVES information from legally designated institutions, ANALYSES this information and then DISSEMINATES the information where it deems necessary to Law Enforcement Agencies. 

This Report provides a holistic view of the role that FIC played in the AML/CFTP Value Chain and the Trends observed not only in 2019 but over the three year period 2017 to 2019.

Lombe Irene Chibesakunda
Board Chairperson

 

MESSAGE FROM THE DIRECTOR GENERAL

During 2019, the Financial Intelligence Centre (the Centre or the FIC) continued to execute its mandate despite experiencing many challenges. The focus of the Centre continued to be the prevention and detection of Money Laundering, terrorism and proliferation financing (ML/TPF) and other financial crimes. 

The Centre welcomed a new Board of Directors in September 2019 and bade farewell to the previous Board having served its tenure of office pursuant to the Financial Intelligence Centre Act, No. 46 of 2010 (the FIC Act).  

In June 2019, the second (2nd) Mutual Evaluation Report (MER) for Zambia was published. The rating of the country improved from the previous Mutual Evaluation of 2007 which assessed Zambia on the forty (40) recommendations on ML and nine (9) recommendations on TF based on the 2004 Financial Action Task Force (FATF)1 Recommendations. The outcome of the assessment was as follows; largely compliant with four (4) recommendations; partially compliant with fifteen (15) recommendations and non -compliant with thirty (30) recommendations. The 2019 evaluation however found that Zambia was compliant with eleven (11) recommendations; largely compliant with seventeen (17) recommendations; partially compliant with eleven (11) recommendations and non- compliant with one (1) recommendation. The evaluation however identified areas that need improvement. The main areas that need improvements are the legal framework for the FIC, particularly on Customer Due Diligence (CDD). Some improvements are also required in the Anti-Terrorism and Non-Proliferation Act No. 6 of 2018 such as, provisions for the implementation of targeted financial sanctions on Proliferation Financing. Both laws are receiving active attention from the FIC and the National Anti-Terrorism Centre respectively. To this effect, the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) will continue to monitor the progress the country is making towards improving its Anti-Money Laundering and Countering the Financing of Terrorism and proliferation (AML/CFTP) regime. The international AML/CFTP regime requires countries to demonstrate effectiveness by the level of ML convictions and forfeiture of assets from proceeds of crime. This requires improvements in the whole AML/CFTP value chain. 

The implementation of the 2016 – 2019 Strategic Plan for the Centre was concluded in December 2019. The focus of the plan was to increase effectiveness in the Centre. This was achieved as evidenced by the results of the Mutual Evaluation where the FIC was rated compliant with Recommendation 292 of the Financial Action Task Force (FATF) standards which focuses on the operation of Financial Intelligence Units (FIUs). 

It is now the Centre’s intention to build on this success during the next strategic period which will run from 2020 - 2022.  Our strategic focus for 2020 – 2022 will be to enhance collaboration and cooperation with Law Enforcement Agencies (LEAs) and other stakeholders.  The Centre has devised initiatives that will assist improve collaboration and cooperation, with a view to increase its level of effectiveness. Since the admission to the Egmont Group of FIUs, the Centre has been able to exchange financial intelligence information with Egmont Group member countries. As at 31st December 2019, the FIC had exchanged information with eleven (11) countries. 

During the period under review, the Centre received a total of seven hundred and ninety (790) reports comprising of seven hundred and forty eight (748) Suspicious Transaction Reports (STRs) and forty two (42) Spontaneous Disclosure Reports (SDRs). This compares to seven hundred and ninety nine (799) reports received in 2018 comprising of seven hundred and twenty four (724) STRs and seventy five (75) SDRs. In addition, the Centre received a total of one hundred and forty nine thousand six hundred twenty five (149,625) Currency Transaction Reports (CTRs) in the year 2019 compared to seventy five thousand five hundred ninety two (75,592) CTRs received in 2018. This represents a 98 percent increase in the number of CTRs filed with the Centre. The increase was on account of more reporting entities becoming aware of their reporting obligations. The other type of report the Centre receives are the Cross Border Currency Declaration Reports (CBDR). In 2019, a total of one thousand one hundred and twenty six (1126) CBDRs were received by the FIC compared to two thousand one hundred sixty nine (2169) reports in 2018.

The different reports mentioned above are all used for analysis to develop financial intelligence. In addition, the Centre also relies on financial intelligence exchanged with foreign FIUs and Domestic Competent authorities. Of the total STRs received in 2019, one hundred and one (101) were analysed out of which forty four (44) were disseminated and fifty seven (57) were closed as there were no reasonable grounds for dissemination. 

As previously stated, one of the major drivers for generation of proceeds of crime is corruption associated with public procurement. During the period under review, STRs received related to procurement corruption reduced.  As a result, the number and value of intelligence reports associated with this predicate offence also reduced. Further, the reduction in the number and value of intelligence reports analysed is attributed to unpredictable funding. This adversely affected the Centre’s ability to verify STRs and SDRs.  As a result of which the Centre  disseminated forty four (44) intelligence reports to (LEAs) with suspected losses valued at nine hundred and eighty-four million Kwacha (ZMW 984 million) compared to the ZMW 6.1 billion reported in 2018 from eighty (80) intelligence reports disseminated to LEAs.  

The Government continues to lose revenue through laundered funds which negatively affect revenue mobilization necessary for provision of public goods and services. As a result of the disseminations made by the Centre, ZRA assessed taxes amounting to ZMW 27.7 million in 2019, compared to ZMW 62 million in 2018.  

With the continued support of Government, the Centre will endeavor to uphold its mandate in the fight against ML and TF. This will be made possible by the continued support and collaboration by all AML/CFTP stakeholders.

Mary Chirwa (Ms.)
Director General