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.