7 July 2014

Tanzania Seeks Technical Help From Switzerland to Probe Ill-Gotten Assets As Foreign Bank Holdings Soar

Photo: Bank of Tanzania
Bank of Tanzania

Dar es Salaam — Tanzania is seeking help from Switzerland in investigating stolen government assets and illicit money stashed in offshore bank accounts, two years after a parliamentary inquiry first called for action.

Frederick Werema, Tanzania's attorney general, said that the government is working with the International Centre for Asset Recovery (ICAR), a technical advisory group based in Basel, Switzerland, to investigate several cases of fraud, bribery and corruption where money may have been secretly funneled overseas. He declined to provide further details.

"We cannot disclose names of anybody because by doing so we will be infringing their rights. Secondly, we may decide to name them but what if the accusations against them turn out to be untrue? And thirdly, if we disclose their names, we will be tampering with our own evidence," Werema said.

In 2012, a parliamentary inquiry called on the government to investigate public sector corruption and to establish who might be hiding millions of dollars in ill-gotten wealth in foreign bank accounts.

Despite a public outcry when Thomson Reuters Foundation last year reported holdings in Swiss bank accounts, recent legislative attempts to enforce laws requiring Tanzanian politicians to disclose their assets and to limit their foreign holdings have foundered.

Meanwhile, the amount of money that Tanzanians keep in Swiss bank accounts continues to climb. Holdings rose 42 percent to CHF 270.97 million (US $304.2 million) in 2013, from CHF 190.58 million (US $213.4 million) the prior year, according to Swiss central bank data. Switzerland is a favorite location for the wealthy to hold money due to its stable currency, generally low taxes and a long tradition of bank secrecy.

Global Financial Integrity, the Washington-base group that tracks illicit flows, has estimated that $4.5 billion in illicit money has left Tanzania over the last decade, and the annual pace has accelerated to $817 million by 2011, the latest year for which data is available, from US$ 551 million in 2002.

It is not only money lost from public corruption. Zitto Kabwe, chairman of Tanzania's parliamentary committee on public accounts, said last October that the country is losing about $1.25 billion a year in budget revenues, equivalent to 5 percent of its gross domestic product, through corporate tax avoidance, evasion and corruption - money needed for healthcare, education and infrastructure.

ICAR helps officials from developing countries to trace, confiscate and repatriate the proceeds of corruption, money laundering and related crimes. It declined to comment on whether it is working for the Tanzanian government.

"We provide technical assistance to a range of law enforcement agencies in various countries around the world, through training and case related assistance, liaising with foreign jurisdictions where required," said ICAR Director Gretta Zinkernagel in an e-mail.

The centre is an arm of the Basel Institute on Governance, which is headed by Mark Pieth, respected for his work in enforcing the international accord on foreign bribery known as the Anti-Bribery Convention for 15 years when he was head of the OECD's Working Group on Bribery.

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