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Namibia’s Anti-Money Laundering and Counter-Terrorist Financing Measures Under Scrutiny

Namibia has been facing a heightened risk of terrorist financing and money laundering, prompting international organizations to review its anti-money laundering (AML) and counter-terrorist financing (CTF) measures. The country’s financial institutions are under pressure to ensure compliance with global standards and prevent illicit activities.

A recent report by the European Financial Action Task Force (FATF) has criticized Namibia’s legal framework for failing to criminalize terrorist financing in a manner consistent with international recommendations. The country’s laws do not provide sufficient powers to investigate and prosecute such offenses, hindering efforts to combat terrorism.

Insufficient Resources

The report also highlighted the shortage of resources within the Namibian authorities, including human resources, which has impeded their ability to effectively identify, investigate, and prosecute money laundering and terrorist financing cases. The country’s law enforcement agencies have been struggling to keep pace with the increasing volume of financial transactions, making it challenging to detect and prevent illicit activities.

Delays in Confiscation

The report noted that Namibia’s Asset Forfeiture Unit has faced significant delays in confiscating proceeds of crime, including those related to the high-profile Fishrot scandal. The unit’s inability to seize and forfeit assets in a timely manner has allowed criminals to dissipate funds and flee with assets.

Limited Success in Recovery

Despite some successes in recovering proceeds of crime, Namibia has struggled to recover assets moved to foreign jurisdictions. The country’s authorities have only managed to repatriate, share, or restitute a limited extent of proceeds or instrumentalities of crime with other jurisdictions.

Focusing on Tax Compliance

The report suggests that Namibian authorities are prioritizing verifying the legitimacy of source funds and tax compliance over pursuing and sanctioning money laundering and terrorist financing offenses. This focus has resulted in a low rate of detection of cash and bulk cash transactions at ports of entry and exit, with limited investigations, prosecutions, and sanctions.

Recommendations

The FATF report has made several recommendations to improve Namibia’s AML/CTF measures, including:

  • Strengthening its legal framework to criminalize terrorist financing in line with international standards.
  • Increasing resources within the authorities, particularly human resources, to effectively identify, investigate, and prosecute money laundering and terrorist financing cases.
  • Improving the Asset Forfeiture Unit’s ability to seize and forfeit assets in a timely manner.
  • Enhancing cooperation with foreign jurisdictions to recover assets moved abroad.
  • Prioritizing investigations, prosecutions, and sanctions for money laundering and terrorist financing offenses.

Namibia must take immediate action to address these weaknesses and ensure its financial institutions are adequately equipped to combat illicit activities. Failure to do so may result in international isolation and reputational damage.