Financial Crime World

Title: Namibia’s Journey Towards Full Compliance with Anti-Money Laundering Standards: Progress and Challenges

Minister’s Cautious Optimism

Minister of Finance and Public Enterprises, Iipumbu Shiimi, shared his cautious optimism about Namibia’s progress in meeting international money laundering standards. Acknowledging the potential consequences of failure to address outstanding issues, he emphasized the need for continued efforts.

Meeting International Requirements

Namibia has been actively working to meet the requirements set by the Financial Action Task Force (FATF) and the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG) since late 2022.

Progress and Challenges

  • Addressed 59 out of 72 action items: Shiimi reported significant progress, with 59 out of the 72 action items successfully addressed. However, he expressed concern over the remaining 13 challenges.
  • Risks to Financial and Legal Systems: The persistence of these issues could threaten the credibility of Namibia’s financial and legal systems, especially considering the country’s past high-profile corruption cases such as Fishrot, VAT scam, and Namibia SME Bank fraud.

High-Profile Corruption Cases and Money Laundering Vulnerabilities

Most illicit funds from these scandals were laundered through banks, unit trust schemes, and other financial services. Certain companies, service providers, lawyers, and real estate agents were found to have high money laundering vulnerability and central roles in these high-profile cases.

Evaluation Process and Regulatory Response

  • Evaluation Process and Report Adoption: A two-year comprehensive evaluation process culminated in the adoption of the Namibia Mutual Evaluation Report by ESAAMLG in September 2022, which triggered a review by the FATF’s International Cooperation Review Group (ICRG).
  • Legislative Changes and Project Team: In response to these evaluations, Namibia enacted four new laws and amended nine existing ones by August 2023. The government also formed a dedicated Project Team to implement the new laws and policies effectively and reported regularly to relevant authorities and stakeholders.
  • Final Progress Report: Namibia submitted its final progress report to the FATF ICRG in late 2023.

Implications of Outstanding Issues

Despite this progress, Shiimi acknowledged the potential consequences of not fully addressing the outstanding issues. “We may face increased monitoring and, in the worst-case scenario, blacklisting,” he said.

  • Technical and Effectiveness Compliance: Preliminary indications suggest that Namibia passed the technical compliance test but made progress in only five out of the 11 immediate outcomes on the effectiveness test.

The Importance of Addressing Outstanding Issues

Shiimi underscored the importance of addressing these outstanding issues to secure Namibia’s financial and legal systems’ integrity and international reputation. The FATF ICRG’s next joint group meeting is expected to confirm whether Namibia will be included on the list of jurisdictions under increased monitoring.