Mbatjiua Ngavirue
19 October 2007
Windhoek — The new Financial Intelligence Bill has not yet become operational, despite parliament passing it into law as far back as June 7, this year.
Spokesperson for the Bank of Namibia (BoN) Helene Badenhorst, recently made this disclosure and could not give any specific date on which the Act will become operational.
"Consultation is taking place within the banking industry and with relevant stakeholders.
"We, however, envisage that they will finalise regulations associated with the Act by early 2008, after which it should become operational."
She said this in response to an inquiry on whether banking institutions could not have done more to protect members of the public from the recent Avosa fraud scandal.
The Avosa overseas jobs swindle was exposed beyond doubt and Kuveri Katjangua, one of the main agents selling the scheme to unsuspecting victims later confessed the scheme was bogus.
He expressed, or some might say feigned, shock at the discovery the scheme was fraudulent, claiming the masterminds behind the fraud also duped him.
The perception among the public - whether right or wrong - is that banks play an important watchdog role to ensure criminals do not use the financial system for illicit purposes.
A procession of oddly assorted, and unrelated people were able to walk into Namibian commercial banks to deposit significant amounts into foreign bank accounts for no obvious legitimate reason.
They were able to do this without raising a single alarm bell at any of the local banks.
During his annual address in early November last year Bank of Namibia Governor, Tom Alweendo, spoke at length about the planned introduction of the country's new Financial Intelligence bill.
In terms of the Bill, the new law would create a Financial Intelligence Centre to combat money laundering based at the BoN.
Alweendo said the main responsibility of the intelligence centre would be to receive reports of suspicious transactions from banks, other "accountable institutions" and supervisory bodies.
"We are happy that the Bill has now been passed into law and we now have the right tools with which to combat money laundering," Alweendo said at the time.
Rough estimates suggest Avosa victims may have lost as much as N$400000 in the scam.
They paid money to the fraudsters on the promise the organisation would pay them monthly allowances of over N$12000 a month for overseas volunteer work.
Avosa further promised them air tickets for their travel and accommodation on their arrival.
The woeful saga surrounding the Avosa scandal raised questions about whether it did not represent a failure by the country's new anti-money laundering laws.
Badenhorst, however, said commercial banks currently have no legal duty to monitor or report any suspicious financial transactions because the laws have not yet become operational.
Presently, the only thing in place is a directive issued by BoN in 1998 advising banks to exercise vigilance to prevent money laundering, but the directive is not legally binding.
Banks are only required to report a transaction exceeding N$500000 to the BoN.
She said financial institutions are busy getting their house in order, including appointing anti-money laundering compliance officers in preparation for implementation of the Act.
The companion Act to the Financial Intelligence Act is the Prevention of Organised Crime Act of 2004, which has also still not become operational three years after becoming law.
The Prevention of Organised Crime Act criminalises money laundering.
The Financial Intelligence Act on the other hand is the main Act that authorises the BoN to gather intelligence for analysis before passing it on to law enforcement agencies.
She, however, said that if the two laws had become operational and the regulations already issued, the picture regarding Avosa's activities might have been different.
"In terms of the Prevention of Organised Crime Act of 2004 and the Financial Intelligence Act of 2007 there would have been a legal duty on the banks to report suspicious transactions to BoN, if not they could be fined."
The definition of what constitutes a suspicious transaction complicates the matter legally.
"It is a subjective test measured against an objective standard. Meaning, would a reasonable teller in that person's shoes have picked up that the transaction is suspicious."
If there had been timeous action from Avosa victims, the BoN could still have acted in terms of the Banking Institutions Act, she explained.
Avosa appeared to have targeted mainly unsophisticated rural dwellers, susceptible to dreams of greener pastures in a foreign land.
At the time, one source estimated there might have been 30 victims in the surrounding area of one settlement in Epukiro, with people losing money ranging between N$8 000 to N$15000.
Remarkably, Warrant Officer Kauna Shikwambi of Police Public Relations yesterday confirmed that so far not a single victim has laid a charge with the police.
Many may still be clinging to the promise made by Katjangua that he will refund their money as their last desperate hope.
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