Financial Crime World

Lesotho Struggles to Implement Anti-Money Laundering and Combating Financing of Terrorism Regime

Despite efforts to combat money laundering and terrorist financing, Lesotho’s implementation of its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime remains a challenge. The country’s AML/CFT Implementation Matrix, published in Schedule 1, reveals several areas of concern.

Coordination among Government Agencies

One major issue is the lack of coordination among government agencies, including:

  • Finance and Development Planning Ministry
  • Justice Law and Constitutional Affairs Ministry
  • Home Affairs and Public Safety Ministry
  • Foreign Affairs and International Relations Ministry
  • Central Bank of Lesotho
  • Lesotho Revenue Authority

A National Inter-Agency Committee needs to be established with a clear mandate and Memorandum of Understanding (MOU) in place. However, the lack of MOUs between relevant government agencies is a major challenge.

Effective Legislation

Another key issue is the absence of effective legislation to combat money laundering and terrorist financing. The country’s Money Laundering and Proceeds of Crime Act (MLPC) needs to be implemented, and regulations need to be put in place to confiscate proceeds of crime.

Financial Intelligence Unit

The Financial Intelligence Unit (FIU), responsible for receiving and analyzing financial intelligence, does not exist, making it difficult to investigate and prosecute money laundering and terrorist financing cases.

Comprehensive Framework

Lesotho also lacks a comprehensive framework for criminalizing money laundering and terrorist financing. The country’s laws do not provide for the confiscation of proceeds of crime, and there is no Criminal Asset Recovery Fund in place.

Resources

The Directorate on Corruption and Economic Offences (DCEO) and the Director of Public Prosecutions (DPP) have also expressed concerns about the lack of financial and human resources to effectively enforce anti-money laundering laws.

International Instruments

Lesotho has not ratified several international instruments aimed at combating money laundering and terrorist financing. The country’s Mutual Legal Assistance Act is also not in place, making it difficult to share information with other countries.

Call for Urgent Action

The AMLA (Anti-Money Launderling Authority) has acknowledged the challenges facing Lesotho’s anti-money laundering regime and has called for urgent action to address these issues. The authority has recommended that the government establish a comprehensive framework for combating money laundering and terrorist financing, as well as provide adequate resources to law enforcement agencies.

Conclusion

In conclusion, while Lesotho has made some progress in implementing its AML/CFT regime, significant challenges remain. The country needs to address these issues urgently to prevent itself from being listed as a non-cooperative country by international organizations such as the Financial Action Task Force (FATF).