Financial Crime Case Studies in Namibia Expose Widespread Money Laundering and Tax Evasion

Namibia’s efforts to combat financial crimes have been hindered by a lack of coordination and inaction among key financial and law enforcement agencies, experts warn.

Red-Flagged Reports Left Unaddressed

The Financial Intelligence Centre (FIC) flagged 254 potential financial crimes between January 2019 and February 2020. However, authorities failed to provide updates on what was done with these red-flagged reports, leaving the public in the dark about progress made.

Notorious Cases of Money Laundering and Tax Evasion

• The disappearance of over N$300 million from the now-defunct SME Bank
• The fishing scandal that involved the transfer of close to N$175 million to politicians and their friends

The Namibian police, who lack a centralized portal to track finalized cases, cases under investigation, or individuals being prosecuted, admitted they do not have data on how much actionable intelligence from the FIC has been used. Tax agency officials also failed to spot how private companies are dodging taxes and robbing the government of millions.

Call for Tighter Laws and Coordination

Financial experts have called for tighter laws and coordination between financial and law enforcement institutions. Professor Vijayakumar Kandaswamy, a professor in financial mathematics at the University of Namibia, recommends creating a unit that specifically looks at tax evasion and money laundering matters.

• “The Bank of Namibia is one entity that can assist by being transparent about large transactions by individuals and organizations,” he says.

Samuel Nuugulu, a risk management lecturer at the University of Namibia, notes that the number of flagged transactions highlights loopholes and weak structures that were supposed to prevent illicit transactions such as money laundering and tax evasion. He warns that direct economic impact cannot be underestimated, as it drains foreign reserves, causes high inflation, and reduces tax collections.

Expert Opinion

Experts believe strong institutions will eventually compel individuals and companies to engage legally, deal honestly, report, and pay their taxes and dues in accordance with existing laws. The lack of progress on FIC red-flagged cases is “worrisome” and demands immediate attention from authorities.