Rwanda Takes Bold Step in Countering Financial Crimes
In a move aimed at strengthening its financial system and increasing confidence among investors, Rwanda’s parliament has recently passed two key laws to combat money laundering, terrorism financing, and the proliferation of weapons of mass destruction (WMDs).
Strengthening Financial Intelligence
The first law, Law No. 74/2019 establishing the Financial Intelligence Centre (FIC), sets up an independent body responsible for conducting financial intelligence to counter money laundering, terrorism financing, WMDs, and related crimes. The FIC will collaborate with security, judicial, and administrative organs at national, regional, and international levels to achieve its objectives.
Responsibilities of the FIC
- Analyzing suspicious transaction reports
- Issuing regulations and directives to reporting persons
- Providing feedback on current trends in money laundering and terrorism financing
- Monitoring financial transactions
- Accessing information from various sources
- Freezing and seizing assets
- Providing or exchanging information with foreign authorities
Prevention and Punishment of Financial Crimes
The second law, Law No. 75/2019 on Prevention and Punishment of Money Laundering, Financing of Terrorism, and Financing of Proliferation of WMDs, introduces severe penalties for non-compliance, including:
- Imprisonment of up to 25 years
- Fines of up to 20 times the amount granted to finance illegal activities
Establishment of the Coordination Council
The law also establishes a Coordination Council to prevent and counter money laundering, terrorism financing, and WMD proliferation. Reporting persons subject to these laws include:
- Financial institutions
- Telecommunications companies providing financial services
- Lawyers
- Accountants
- Real estate agents
- Others
Compliance with International Standards
Both laws align Rwanda’s anti-money laundering and countering the financing of terrorism laws with international standards. To prevent contravention, reporting persons must ensure that their internal policies, guidelines, and training align with the new laws.
Conclusion
The passing of these laws marks a significant step forward in Rwanda’s efforts to combat financial crimes and increase confidence among investors. It is essential for reporting persons to take note of their responsibilities under these laws and take necessary steps to comply with them.