By Edward Mukaro
ZIMBABWE has committed to actively work with international body, Financial Action Task Force (FATF) to counter illegal financial activities such as money laundering, terrorist financing and proliferation financing to counter to address strategic deficiencies.
When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the ‘grey list’.
For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country.
FATF noted, “Since October 2019, when Zimbabwe made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, Zimbabwe has taken initial steps towards improving its Anti-Money Laundering/ Combating the Financing of Terrorism regime, including by establishing a legal framework to collect beneficial ownership information of legal person and arrangements, as well as completing a comprehensive assessment of its Money Laundering/ Terrorist Financing risks.”
However, despite the inroads being made by the Second Republic led by President Emmerson Mnangagwa, FATF proposed a cocktail of measures and steps that the country needs to take in order to fully combat the money laundering and terrorism financing.
“Zimbabwe should continue to work on implementing its action plan, including by (1) implementing the national AML/CFT policy base on key ML/TF risks; (2) implementing risk-based supervision for FIs and DNFBPs including through capacity building among the supervisory authority; (3) ensuring development of adequate risk mitigation measures among FIs and DNFBPs, including by applying proportionate and dissuasive sanctions to breaches; (4) developing a comprehensive legal framework and mechanism to collect and maintain accurate and updated beneficial ownership information for legal persons and arrangements, and ensure timely assess by the competent authorities; and (5) addressing remaining gaps in PF-related targeted financial sanction framework and demonstrating implementation,” said FATF.
Recently, FATF announced the de-listing of The Bahamas from the list of jurisdictions under Increased Monitoring. The Bahamas is therefore no longer subject to the FATF’s increased monitoring process; however, the nation will continue to work with CFATF to improve further its AML/ CFT regime.
Money laundering is a worldwide phenomenon and one that is increasing. There are many definitions, but basically, the term refers to the practice of the manipulation of the proceeds of crime so as to conceal their true origin. If undertaken successfully it results in the eventual release or return of the proceeds concerned into the economy in a clean laundered state.
By Edward Mukaro