Financial Crime World

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Financial Crime on the Rise: Rwanda Passes Key Laws to Combat Money Laundering and Terrorism Financing

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Rwanda has taken a significant step towards strengthening its financial system by passing two new laws aimed at combating money laundering, terrorism financing, and proliferation of weapons of mass destruction. The laws, which came into effect on February 17 and 24 respectively, establish a Financial Intelligence Centre (FIC) and introduce severe penalties for non-compliance.

The Financial Intelligence Centre (FIC)

The FIC is an independent body under the supervision of the Ministry of Finance, responsible for conducting financial intelligence to counter money laundering, terrorism financing, proliferation of weapons of mass destruction, and related crimes. The centre will collaborate with security, judicial, and administrative organs at national, regional, and international levels to achieve its objectives.

New Powers and Responsibilities

Under its new powers, the FIC has the authority to:

  • Monitor suspicious transactions
  • Access financial information
  • Freeze and seize assets
  • Exchange information with foreign authorities
  • Issue regulations on reporting persons and related sanctions for non-compliance

Law No. 75/2019: Prevention and Punishment of Money Laundering, Financing of Terrorism, and Financing of Proliferation of Weapons of Mass Destruction

This law introduces severe penalties for non-compliance, including:

  • Imprisonment up to 25 years
  • Fines up to 20 times the amount granted to finance illegal activities

Reporting Persons

The laws define reporting persons as a wide range of entities, including:

  • Financial institutions
  • Telecommunications companies providing financial services
  • Lawyers
  • Auditors
  • Accountants
  • Tax advisors
  • Real estate agents
  • Dealers in precious stones and metals
  • Casinos and national lotteries
  • Non-governmental organisations
  • Trusts
  • Others

Importance of Compliance

Experts warn that it is crucial for reporting persons to ensure their internal policies, guidelines, and training align with the new laws to prevent contravention. The introduction of these laws brings Rwanda’s anti-money laundering and countering terrorism financing regulations in line with international standards.

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