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Low Number of Inspections of Reporting Persons Raises Concerns over Anti-Money Laundering Efforts

A recent audit has revealed that the number of inspections carried out on reporting persons in Tanzania is alarmingly low, raising concerns over the country’s efforts to combat money laundering.

The Issue

According to the audit report, only a handful of inspections were conducted on reporting persons in 2016, despite the growing threat of money laundering in the country. This highlights the need for more effective measures to prevent and detect money laundering activities.

Money Laundering: A Serious Crime

Money laundering is a serious crime that involves concealing or disguising the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from an offence. It has been linked to various forms of corruption, including public sector corruption, misappropriation and theft of public and donor funds.

Impact on the Economy

The audit report notes that money laundering impairs the development of legitimate private sector through the supply of products priced below production cost, making it difficult for legitimate activities to compete. The crime also causes unpredictable changes in currency demand as well as great volatility in international capital flows and exchange rates.

Recommendations

To address these concerns, the following recommendations are made:

• Conduct regular inspections on reporting persons to prevent and detect money laundering activities.
• Develop an anti-money laundering coordination framework to ensure effective prevention and detection of money laundering activities.
• Regularly issue and use anti-money laundering guidelines to ensure compliance with anti-money laundering regulations.
• Ensure that FIU and Regulators regularly provide training and guidance to reporting persons on anti-money laundering measures.
• Conduct regular risk assessments to identify areas vulnerable to money laundering activities.

Conclusion

The low number of inspections carried out on reporting persons in Tanzania raises concerns over the country’s efforts to combat money laundering. The audit report highlights the need for more effective measures to prevent and detect money laundering activities, including conducting regular inspections and developing an anti-money laundering coordination framework. It is imperative that the authorities take immediate action to address these weaknesses and ensure that the country’s financial system is protected from the threat of money laundering.