Suspicious transactions increase by 97% in 2019
Aug 02, 2019 Lawson Chad
According to Bank of Namibia “Money Laundering is the process whereby
criminals convert the proceeds of crime (such as money, property, shares, etc.)
into assets that appear to have a legitimate origin.”
Believed to be more prolific in Namibia than reported, methods used to launder
money are various and include small to medium sized cash business and even
large parastatals which operate using cash on a fairly regular basis, it is
alleged.
The primary objective for all the Anti-Money Laundering (AML) requirements
imposed on the banks as per the Financial Intelligence Act, 13 of 2012 (FIA) is
to report Suspicious Transactions and /or Activities Reports (STR/SAR’s) so as
to enable law enforcement to prevent criminals from completing or benefiting
from the proceeds of their illegal activities. These requirements also protect
Namibian banks from being used as an institution to launder illicit funds.
According to the 2019 Annual Report by the FIC, “the number of SARs reported in
2019 amounted to 279, a 97% increase, compared to 139 SARs recorded in 2018.
Attributing factors to the increase in SARs reporting is due to FIC’s
consistent AML/CTF trainings, supervision and monitoring into the quality of
reporting.”
“The latest statistical report from the Bank of Namibia’s Financial
Intelligence Centre (FIC) indicates that Tax Evasion remains the leading
potential offence in all the suspicious reports finalised. This feedback is
demonstrative of how STR/SAR’s not only assist law enforcement but also protect
the Namibian economy from losing funds through illicit activities, says Bank
Windhoek André le Roux, Manager: PR & Reputation Risk.
For banks, suspicions are raised when it is clear that there exists no match
between a client’s profile and the transaction that the said client might be in
the process of performing.
An example of such a scenario may be when a client’s source of funds are not
aligned to the transaction in question or when there is no identification documentation
availed. Such an instance would be reported to the FIC.
A monthly statistical report, published by the FIC in June 2019 states that
“during the period under review STR’s received slightly decreased to 78 STRs
from 95, and 82 recorded during the previous month and the same month in the
previous year respectively. The chart further shows that currently, out of all
the STRs received during the month under review, only 3 reports were escalated
for further analysis whereas 17 were classified as ‘low priority’.
In addition, a total of 58 STRs or 74.4% of these reports were still under
cleansing at the time of reporting.
The Banks continue to file the most reports. During the month of June 2019, May
2019 and June 2018, they filed 80.8%, 89.5% and 57.3% of all STRs
respectively,” reveals the report.
“The fight against financial crime is a responsibility for not only banks but
for every citizen and resident of Namibia.
With this core understanding, if you have knowledge of any suspicious activity/
transaction concluded in any business, or suspect that a business received or
is about to receive the proceeds of unlawful activities, you must without
delay, after the suspicion or belief concerning the transaction/activity that
gave rise to the requirement, report the same to the FIC,” urges Le Roux.
Financial crime is a national and global challenge. Often times the Banks
receive queries on why Anti-Money Laundering, Combatting Terrorist and
Proliferation Financing requirements such as Know Your Customer and Enhanced
Due Diligence requirements are necessary.
“Whilst these obligations may seem cumbersome in the normal course of day to
day activities, we must remember that criminals rely on funding to conduct
their operations,” Le Roux continued.
In the latest statistical report from the Financial Intelligence Centre,
Tax Evasion biggest offence
Tax Evasion remains the leading potential offence in all the suspicious reports
finalised.
This feedback is demonstrative of how STR/SAR’s not only assist law enforcement
but also protect the Namibian economy from losing funds through illicit
activities.
“It is therefore incumbent on the general public, especially businesses to
appreciate that requirements such as KYC are the foundation which assist banks
to combat financial crime, decrease the risk of proceeds of crime being cleaned
through Namibia’s financial system,” Le Roux concluded.