Financial Crime World

Namibia Enhances Fight Against Cross-Border Financial Crime

Introduction

In a move to boost security, safety, and compliance in the realm of sophisticated financial crimes, the Bank of Namibia (BoN) has released the Payment Systems and Electronic Fund Transfer Act 9 (PSD-9). This regulation aims to control both domestic and cross-border electronic fund transfer activities within the national payment system.

Extension of Effective Date

Originally set to take effect on April 15, PSD-9’s implementation has been delayed until September. This extension is expected to give stakeholders sufficient time to adapt to the new requirements.

Key Features of PSD-9

  • Specifies how Electronic Fund Transfer (EFT) transactions should be carried out within the national payment system
  • Focuses on cost-effectiveness, efficiency, safety, and security
  • Mandates that EFT transfers from Namibia to other countries be handled and reported as cross-border transactions
  • Requires all banks, customers, and companies involved in cross-border payments and collections to use the Global Payment Society for Worldwide Interbank Financial Telecommunications (Swift) to initiate these transactions

Security Concerns Remain

Despite efforts to enhance security, cross-border payments remain vulnerable to sophisticated scams and fraud attempts. Institutions have different processes in place to mitigate risks, but the absence of a common settlement system and common rules and governance creates challenges for counterparties operating across jurisdictions.

Regulatory Requirements Abound

Cross-border payments are subject to the regulatory requirements of the origin country, destination country, and any other jurisdictions they pass through. Each country has its systems and regulatory authorities in place to protect consumers and their personal data, as well as prevent fraud and illegal activities.

Namibia’s Path to Greylist Removal

The implementation of PSD-9 is expected to help Namibia remove its name from the greylist, thereby facilitating economic growth, international trade, global development, and financial inclusion. The African Continental Free Trade Area agreement will play a crucial role in this process.

Educational Materials Needed

To ensure everyone understands the CMA PSD-9 cross-border payments regulations, the BoN should create educational materials in all of Namibia’s indigenous languages. This will help promote awareness and facilitate compliance among stakeholders.