Financial Crime World

Namibia’s Dirty Money Woes: A Call for a Centralized Unit to Combat Financial Fraud

By Nghiinomenwa Erastus

April 21, 2020

Windhoek - Addressing Illicit Financial Flows in Namibia

Industry experts have expressed concern over the lack of coordination and inaction by key financial and law enforcement agencies in Namibia, leaving the country grappling with the problem of illicit financial flows. In response, there is a renewed call to establish a centralized government unit to combat financial fraud.

Police admits challenges in stemming the flow of dirty money

The police acknowledge that their efforts to combat financial fraud in Namibia have been hampered by the absence of a coordinated approach between financial institutions and law enforcement agencies (FATF, 2017).

Namibia’s financial system - A conduit for money laundering and other financial crimes

Namibia’s financial system is believed to be a conduit for money laundering and other financial crimes, with estimates suggesting that up to $2.2 billion may be leaving the country annually (Financial Sector Deepening Africa, 2020). Such illicit financial flows can undermine economic stability, attract criminal organizations, and contribute to social inequality.

Lack of Coordination and Inaction - Identified Gaps and Urgent Calls for Improvements

The Financial Action Task Force report (FATF)

A recent report by the Financial Action Task Force (FATF), a global body that sets anti-money laundering (AML) and counter-terrorism financing (CTF) standards, identified gaps in Namibia’s AML/CTF regime and urged the country to take action (FATF, 2017). The report emphasized the importance of improved inter-agency cooperation and the relevance of a risk-based approach to financial supervision.

The Namibian Financial Institutions Supervisory Authority (FISA)

The Namibian Financial Institutions Supervisory Authority (FISA), which is responsible for supervising financial institutions and promoting financial stability, acknowledges the challenges but remains optimistic. Efforts are underway to strengthen the AML/CTF framework and enhance communication between financial institutions and law enforcement agencies (FISA, 2020).

The need for more

However, some experts believe that more needs to be done. The absence of a coordinated and effective response among law enforcement agencies prevents Namibia from effectively addressing financial crimes (Anonymous financial crimes expert, 2020). They call for the establishment of a centralized government unit to tackle financial crimes.

Centralized Unit Proposed - A Solution to Enhance Coordination and Effective Response

The role and structure of the proposed unit

The proposed unit, which would be responsible for investigating and preventing financial crimes, is expected to coordinate efforts among various stakeholders, including financial institutions, law enforcement agencies, and regulatory bodies. The unit would also assume the responsibility for ensuring Namibia complies with international AML/CTF standards, providing training and capacity building to law enforcement agencies, and collaborating with other countries to combat cross-border financial crimes.

Learning from similar units in other countries

Although the exact structure and mandate of the proposed unit are yet to be determined, experts suggest it could be modeled after similar units in other countries, such as the Financial Intelligence Unit (FIU) in South Africa or the Serious Fraud Office (SFO) in New Zealand.

The Benefits of a Centralized Unit - Strengthening Namibia’s Anti-Money Laundering and Counter-Terrorism Financing Framework

Create a more coordinated response to financial crimes

The proposed unit would help create a more coordinated and effective response to financial crimes, reducing risks for all stakeholders involved and improving Namibia’s international reputation.

Sending a strong message to potential financial criminals

Establishing such a unit would not only strengthen Namibia’s AML/CTF framework but also send a strong message to potential money launderers and other financial criminals that the country takes the issue seriously.

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