BOZ’s Jurisdiction: Consistency with International Standards

Windhoek, Namibia - Recent Assessment Highlights Gaps in Anti-Money Laundering Measures

In a recent assessment, it was found that the Bank of Namibia (BoN) has been exercising its powers under the Banking Institutions Act to issue anti-money laundering-related determinations and circulars. These measures are aimed at addressing aspects of money laundering until the Proceeds of Crime Act (POCA) is brought into effect or the Anti-Terrorism Activities Bill and Financial Intelligence Bill are enacted.

Consistency with International Standards

According to sources, the BoN’s jurisdiction has been consistent with international standards, as it has issued determinations on money laundering and “Know Your Customer Policy” (BID-3), which requires banking institutions to keep records relating to their customers. Additionally, a complementary circular (BIA 2/02) was issued in June 2002, providing guidance on the prevention, detection, and control of possible money laundering activities.

Weak Legal Basis for Measures

However, it was noted that these measures have a weak legal basis as they were issued under the Banking Institutions Act, which does not explicitly cover anti-money laundering and combating the financing of terrorism (AML/CFT). The authorities indicated that no attempt has been made to enforce these directives or integrate them into annual examinations of banking institutions.

Supervision of Non-Bank Financial Institutions

The assessment team also found that the non-bank financial institutions sector is supervised by the Namibia Financial Institutions Supervisory Authority (NAMFISA), which has not issued any AML/CFT rules, guidelines, circulars, or requirements to its supervised institutions. Currently, there are no AML/CFT requirements for the non-bank financial sector to comply with international standards.

Designated Non-Financial Businesses and Professions (DNFBPs)

Furthermore, it was noted that designated non-financial businesses and professions (DNFBPs) have no AML/CFT measures imposed on them, and a review of the proposed Financial Intelligence Bill does not cover dealers in precious stones and metals as accountable institutions. However, Namibia has fully participated and cooperated in the Kimberly Process, which assesses diamond trading processes to reduce the risk of illegal peddling.

Recommendations

The authorities have been urged to consider how DNFBPs will be supervised with regard to their AML/CFT obligations and develop specific monitoring mechanisms. Additionally, staff expertise is needed on this issue, as there are no supervisory bodies for certain professions such as car dealers or dealers in semi-precious stones.

Conclusion

Overall, the assessment concluded that while some measures have been taken by the BoN to address AML/CFT, more needs to be done to ensure consistency with international standards and effective implementation of the POCA.