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Case Studies of Successful Financial Crime Prevention Strategies in Ethiopia

A Descriptive Study on Money Laundering Typologies and Techniques

By Messay Asgedom Gobena, Department of Peace and Security Studies, Institute for Peace and Security Studies, Addis Ababa University, Addis Ababa, Ethiopia

Background

Ethiopia has been a hotspot for money laundering activities in recent years, with criminals employing various techniques to conceal the illicit proceeds of their crimes. This study aims to identify the most common money laundering typologies and techniques used in Ethiopia.

Methodology

Using primary data collected from interviews with officials from the Ethiopian Financial Intelligence Center, Ethiopian Customs Commission, commercial banks, and law enforcement agencies, as well as secondary data from government reports, media press, statutes, and online sources, this research provides a comprehensive analysis of the money laundering landscape in Ethiopia.

Key Findings

Financial Institutions: Money launderers have employed financial institutions to conceal their illicit proceeds.
Trade-Based Money Laundering: This technique involves using trade transactions to move funds across borders without arousing suspicion.
Cash-Based Money Laundering: This method involves physically transporting large amounts of cash to disguise the origin and destination of the funds.
Hawala Networks: These networks use a system of trust and word-of-mouth communication to transfer value without physical movement of cash.
Shell Companies: Shell companies are used to conceal the true ownership and control of assets.
Anonymous Beneficiaries: Money launderers often use anonymous beneficiaries to hide the ultimate recipient of the illicit proceeds.

Increasing Use of Financial Technologies and Virtual Currencies

There is evidence suggesting that criminals are increasingly using financial technologies and virtual currencies to launder the proceeds of their crimes.

Interconnectedness of Typologies and Techniques

The study’s findings highlight the interconnectedness of these typologies and techniques, which often overlap and blur the lines between them.

Transnational Dimension

The research indicates that money laundering activities in Ethiopia have a transnational dimension, with some operations being highly tailored to the country’s unique economic context.

Contribution to Existing Knowledge

This study contributes to the existing body of knowledge on money laundering by providing a detailed analysis of the typologies and techniques used in cash-intensive economies like Ethiopia. The findings have implications for policymakers, law enforcement agencies, and financial institutions seeking to combat money laundering in these jurisdictions.

Keywords:

Ethiopia, Money laundering, Typologies, Techniques

Citation:

Gobena, M.A. (2023), “Money laundering in Ethiopia: an analysis of typologies and techniques”, Journal of Money Laundering Control, Vol. 26 No. 4, pp. 696-708. https://doi.org/10.1108/JMLC-03-2022-0053