Ethiopia’s Licenses to Operate Legal Businesses and Participate in Illegal Activities

In a country where corruption is rampant and law enforcement is weak, the line between legal and illegal activities has become increasingly blurred.

A Blurred Line Between Legality and Illegality

According to sources within the government, Ethiopia has been issuing licenses to operate legal businesses to individuals who have been involved in various illegal activities. This has created an environment where organized crime thrives, with little fear of detection or prosecution.

Trade-Based Money Laundering: A Growing Concern

The country’s import and export business is particularly vulnerable to trade-based money laundering due to a lack of understanding and resources to detect suspicious transactions. The intermingling of legitimate and illegitimate trade, combined with corruption among customs and law enforcement personnel, has made it easy for criminals to hide their illegal activities behind the façade of legal businesses.

Leadership and Governance

Challenges in Combating Organized Crime

The current leadership in Ethiopia has initiated ambitious reforms to combat organized crime, but the ongoing conflict in Tigray and ethnic tensions elsewhere in the country have significantly reduced the government’s ability to implement these initiatives. The war has led to millions facing starvation, and the government’s efforts are focused primarily on resolving the conflict.

Criminal Justice and Security

The Judiciary: A Source of Concern

The judiciary in Ethiopia is theoretically independent, but it has often failed to oppose the government. However, the appointment of a new chief justice has raised hopes for judicial reform. Despite efforts to develop the country’s capacity to fight organized crime, the ability of federal authorities to enforce laws has decreased in most federal states.

Economic and Financial Environment

AML/CFT Regime: Need for Strengthening

Ethiopia has made progress in improving its anti-money laundering/counter-terrorism financing regime, but its AML/CFT laws and regulations require further strengthening. The primary sources of illicit proceeds are corruption, tax fraud, human trafficking, arms trafficking, and contraband.

Human Trafficking: A Major Concern

The government has made efforts to tackle human trafficking, but child sex trafficking remains a major concern. Civil society organizations have been silenced or forced to take the side of the government in support of the war. Journalists who deviate from the official line are considered “pro-terrorist” and face arrest or even murder.

Conclusion

In this environment, it is little wonder that organized crime has flourished in Ethiopia. The country’s vulnerability to trade-based money laundering, corruption, and illegal activities poses a significant threat to its economic stability and security.