7 October 2012

East Africa: EAC Pushes for Anti-Money Laundering Laws

Arusha — EXPERTS meeting in Kigali have urged the East African Community (EAC) partner states to enforce laws against money laundering, to stem the crime and stop terrorism financing in the region.

Addressing a conference on anti-money laundering initiatives, Daniel Ochieng, Regional Coordinator of terrorism research and response in Africa, said that if money laundering is prevented, terrorism will not flourish."The only solution to curb money laundering and terrorism financing is to enforce our national laws and monitoring of terrorist organisations," said Ochieng.

"Money laundering and terrorism financing activities may have negative consequences for a country's financial stability and macroeconomic performance. We call upon our economies to enforce the law so that these activities are prevented," he added.

The three-day forum under the theme, "Combating financial crimes in East Africa," is organised by Cyber Security Africa, a technology security solutions company based in Nairobi, Kenya.The meeting drew key stakeholders from governments, law enforcement agencies, financial institutions and security experts from the region.

Speaking at the forum, Joy Ntare, Director of Financial Stability at the National Bank of Rwanda, said that money laundering and terrorist financing cases in Rwanda were rare and minimal.She attributed this to strict supervision by the central bank, a very small market and low population.

"That does not mean that there is no possible risk. Being a peaceful country, we talk of zero tolerance to corruption and we are busy attracting investors, so it is paramount to enforce the anti-money laundering laws because we may not be aware where investors get their money from," she said.

Ntare called for strong mechanisms to mitigate the risks of money laundering and terrorism financing activities in the region.Rwanda passed an anti-money laundering and combating financing of terrorism law in 2008.

As part of efforts to combat money laundering, the government established the Financial Intelligence Unit, an agency mandated to share information on suspicious transactions across borders.Sammy Kioko, the Alliance Manager of Cyber Security Africa, said anti-money laundering laws were in place in the region, but needed to be fully implemented.

"This forum will be a platform where experts share the best possible ways to protect companies from fraud, anti-money laundering and terrorist financing measures in case such risks arise in the region," he said.Alex Kioni, Lead Technical Consultant at Security Systems, said: "Financial crimes threaten organisations at multiple points. Systems for both fraud prevention and detection and anti-money laundering processes can reduce the risk."

According to regional laws, any person who leaves or enters a country transporting cash or negotiable bills of exchange exceeding $10,000, without prior declaration, except for funds certified by a withdrawal slip issued by an accredited bank, is liable to a money laundering offence.

Money laundering is the process of concealing the source of money obtained by illicit means. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount of money laundered, either worldwide or within their national economies.

In 1996, the International Monetary Fund (IMF) estimated that two to five per cent of the worldwide global economy involved laundered money.

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