FIU in anti-money laundering drive

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Rethabile Pitso

FINANCIAL Intelligence Unit (FIU) Legal and Information Officer Mofokeng Ramakhala says there are working on a draft law to compel financial institutions to submit suspicious transaction reports which would ensure a more coordinated response to money laundering and fraud.

In an interview with the Business Journal this week, Mr Ramakhala said the FIU was formulating a draft law, which would be tabled in parliament, to compel financial institutions and corporates to file the reports.

The FIU was launched by the Central Bank of Lesotho (CBL) in 2014 to enhance the integrity of the country’s economic system. The unit was established by the Money laundering and Proceeds of Crime Act 4 of 2008 with the mission to become “a dynamic centre of excellence providing financial intelligence reports for combating money laundering and terrorist financing in Lesotho and internationally”.

He said, by virtue of being a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), Lesotho was required to abide by international standards for preventing fraud and money laundering.

“The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 by the Ministers of its Member countries, mainly the member countries of the Organisation of Economic Development (OECD),” said Mr Ramakhala.

“South Africa is also a member of FATF, the only country in the Africa region. The mandate of the FATF is to set standards and to promote effective implementation of the legal, regulatory and operational measures to combat money laundering, terrorist financing and the financing of proliferation and other related threats to the integrity of the international financial system. FATF also works through regional bodies to extend its mandate to the international community. The regional bodies are referred to as FATF-Styled Regional Bodies (FSRBs). Lesotho is a member of FSRB through ESAAMLG.”

He said that as a member of ESAAMLG, Lesotho is expecting to play its part in the fight against money laundering and terrorist financing.

“In accordance with the ESAAMLG guidelines, financial and corporate institutions are obliged to submit their progress reports. But at the moment, we still have institutions which have not submitted the reports partly because we do not have legislation to compel them to submit the report,” Mr Ramakhala said.

“So far, we are using international standards to help us achieve this goal. This means that more awareness campaigns and monitoring have to be done to institutions that have not filed a single report to date.”

According to the “Suspicious Transaction Report” the FIU submitted to ESAAMLG in June 2015, only three of about 20 institutions obligated to report submitted their reports.

“Part of the three are banks, money transfer services and mobile money services. In the report, banks submitted 14 suspicious transactions and mobile money services had one suspicious transaction while money transfer services recorded zero suspicious transactions bringing the total of suspicious transactions by June to 15,” he said.

Mr Ramakhala said as of June this year, FIU had referred seven suspicious transactions to relevant institutions including two to the Lesotho Revenue Authority, two to Lesotho Mounted Police Service and three to the Directorate on Corruption and Economic Offences.

He also encouraged individuals to report suspicious transactions to nip money laundering and fraud in the bud.

“Money laundering and terrorist financing are challenges we are facing in the Mountain Kingdom. A lot of sensitization is still needed so that the general populace, including the reporting institutions, can prevent and help authorities to combat these crimes which gnaw at the socio and economic well-being of Basotho,” Mr Ramakhala.

“FIU has, since its inception, gone out to sensitise members of the public and reporting institutions about the scourge of money laundering. There are a number of Billboards, radio and TV adverts conveying the message that money laundering is a serious financial crime, and the FIU together with relevant law enforcement agencies have joined hands to ensure that proceeds of crime are confiscated from criminals to inculcate into the minds of would-be offenders that crime does not pay.

“These kind of campaigns also help the FIU to receive even more suspicious transaction reports and it is our expectation that in the next progress report to ESAAMLG the number of suspicious transaction reports from accountable institutions will have doubled what we currently have.”

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