Opinion

OPINION: The FIC 2018 Report is Hair-Raising!

The Financial Intelligence Centre (FIC) has launched the 2018 Money Laundering/Terrorist Financing (ML/TF) Trends report which has brought to the fore shocking revelations of suspicious transactions involving officials in government (Politically Exposed Persons – PEPs), Zambians in business, foreigners and other connected individuals. The 2018 report has revealed an increase of 30 per cent in these suspicious transactions involving corruption and money laundering to K6.1 billion from K4.5 billion recorded in 2017. That there has been such an increase in suspicious transactions in a period of one year should be a serious source of concern for all to investigate the truth behind these shocking figures and details of alleged wrongdoing.

According to the FIC director general Mary Chirwa, the 2018 Trends Report on Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) is intended to increase public awareness and understanding of Zambia’s AML /CFT regime. It provides a synopsis of suspicious financial transactions analysed and related financial crimes identified by the FIC during the year. Such information is critical in supporting Zambia’s response towards the prevention and detection of money laundering and terrorist financing.

Shocking revelations have been made in the 2018 Trends Report, though the trend is similar to what happened in 2017. Again, transactions allegedly involving corruption topped the list at K4.9 billion, accounting for the bulk of the money involved in these suspicious transactions. Tax evasion followed at K1 billion; theft at K110 million and fraud at K54 million. With a fight against corruption declared and strong statements given by President Edgar Lungu to the effect that those involved in questionable deals will not be spared, if found wantin, these suspicious transactions are still on the rise. In total, 176 suspicious transaction reports were recorded of which 80 were disseminated to Law Enforcement Agencies on suspicions covering tax evasion, fraud, corruption and money laundering. It is left to the investigative agencies to move on those cited should their investigations prove some wrongdoing in line with revelations made by the FIC.

Though shocking, the contents of the FIC 2018 Trends report on corruption were expected, but not at this level, because we know that there are a number of people who have taken advantage of their positions and association with top leaders to engage in a variety of wrong things and expect some form of protection in the end. But that’s not workable because law is law and it does not segregate. Either way, the law does catches up with us regardless of how long it might take. This is a problem that has engulfed not only the government but the private sector as well. What is clear for now is that law enforcement and investigative agencies have a lot of work to do to get to the root of it all and nip this problem in the bud.

The FIC report names PEP N, who has alleged amassed wealth not in line with his expected income within a short period of time through suspected corrupt practices with the aid of two other PEPs, his associates – PEP D and PEP C. It is alleged that PEP N influenced the awarding of contracts to foreign construction companies and in return, these companies constructed 49 residential properties for him valued at ZMW 70 million. They further purchased two luxury vehicles for him valued at ZMW 4 million. With respect to PEP C and PEP D, it was noted that they had acquired four (4) properties valued at ZMW 61,000,000.

A review of the bank accounts of PEP N and PEP C for the period 1st October 2015 to 30th April 2018 revealed credit turnover of K12 million for PEP N and K35 million for PEP C and this has been reported to appropriate investigative agencies. These scenarios show a serious drive by some government officials and others in business to make as much money for themselves as possible at the country’s expense. While a few are having endless headaches about the country’s future, there are those officials, in partnership with some outsiders, who are out to sweep this country clean. But we have seen how those whose wealth is way beyond their level of income have been courted by the Anti-Corruption Commission, Drug Enforcement Commission and other law enforcement agencies. There is more yet to be revealed and the long arm of the law will catch up with all those involved. As stated in the report, the revelations are a tip and the rest of the work is left to the investigative wings to ascertain whether or not those cited (although not named) were truly involved in these suspicious transactions.

Then there is a Mr. S, a foreign national resident in Zambia, who received huge amounts of money in his personal account that he used to finance other businesses in the country, paid some public officials ostensibly as kickbacks for favours given and sent a substantial amount to his home country. Additionally, two foreign nationals named X and Y incorporated company D in Zambia. Company D held bank accounts with bank B. Mr. X requested the bank to amend his name, date of birth and nationality. Upon receipt of this request, the bank performed customer due diligence and adverse information on the new credentials was revealed. The new name was linked to a terrorist group in Country Q within Africa. Mr. X made multiple forex purchases using his company account to fund his travel from Zambia to the African Country where terrorist activities are rampant. The forex purchases by Mr. X were suspected to be funding terrorist activities in Country Q. This matter was also disseminated to competent authorities for further investigation. How were these transactions possible? These foreigner nationals must be running a strong network to successfully carry out their activities without any arrest. Having such acts taking place successfully without any stop to them is a reminder that Zambia needs to strengthen its monitoring mechanisms and get all these criminal minds out of the way.

Also in the chain come nine law firms cited as having played a role in facilitating/masking criminal transactions in collusion with some public officials. These identified law firms assisted suspected criminals to mask the source of funds and aided its reinvestment or movement to foreign jurisdictions. “Most cases involved illegally obtained funds transferred to law firms who then facilitated the acquisition of property such as land and motor vehicles on behalf of the launderers. In 2018, the Centre analysed cases related to nine (9) law firms amounting to ZMW 365 Million,” the FIC report has told us.  What courage! Lawyers are individuals of high integrity that must respect the law because they know the law. Lawyers are not called learned for mere display but this accolade signifies the importance attached to the profession. The bar of integrity used on lawyers is much higher than an average individual hence their conduct is expected to be above reproach.

Another area of concern is public procurement, which, according to the report, is vulnerable to corruption. This is where, according to the report, tender procedures for some contracts were not followed, shell companies (non-operational entities without physical addresses) were used to get contracts from government. Some of these shell companies actually had contracted awarded to them before they were even formed. This is a serious money laundering activity that is robbing this country of billions of kwacha that government could effectively put in key services such health, education and provision of other social services.

Our investigative agencies who have been given full reports with names of those suspected to be behind these shell companies must, as a matter of urgency, take this matter up and bring to book all those who will be found wanting. Zambia currently has huge economic problems – the country’s debt burden is getting heavier (as acknowledged by finance minister Margaret Mwanakatwe) and more austerity measures have been announced to get salvage the economy. It is deeply disturbing to have these going on in a country whose government is battling debt repayments and extremely low import cover (of only slightly over a month instead of the recommended three months). This, in short, means Zambia is in a situation that requires a high level of belt tightening and ensuring no wastage of the available resources.

Actually, the FIC Act of 2016 does not stop the institution from naming the PEPs, the law firms, the audit firms, the political parties receiving money from companies that have been awarded public contracts, the foreigners using Zambia to launder money and those behind the casinos also being used for questionable deals. Only when those involved start getting named in these reports will we see a stop to such activities. President Lungu, who has been quite firm and serious about ending corruption and bringing the culprits to book, will obviously ensure no one is protected and will leave the investigative wings to do their work independently. The FIC has done its job; the rest is up to the law enforcement agencies to either arrest or clear those allegedly behind these suspicious transactions.

25 Comments

  1. One zed manex

    I’m shocked mwandi & failing to pay retires but busy misusing money on terrorism & corrupty activity’s, let’s wait for the Truth to come out,but its hair moving.I’m shivering with fear what is in this fic report. Where are we heading as a nation? As the president said zero tolarence to corruption, let the investigative wings do there work & save mother Zambia. God bless Zambia one Zambia one nation.

    • Binda

      Kekilenge moyo mu Zambia kabiji ne bumvu ku byalo bikwabo. Nkambo e tukwashe.

      • Indoshi palupe

        Washetwa obewa!

      • Wise me

        This is not a simple white collar corruption, it’s classified as State Capture. The problem in my opinion is that Zambia law enforcement which fails to end petty gangsterism in our townships may not be able to deal with such crime bordering on international terrorism. We need the help of CIA and FBI perhaps. The country has rotten to putrification status if this FIC report is genuine. This type of situation has the potential to stress the head of state whose responsibility is to ensure a stable country politically, economically and socially to an extent of making him suffer from hypertension and other NCDs. Remember the Zamtrop issue could have eaten away the health of the two former late presidents of the MMD government.

  2. Indoshi palupe

    All these reports by FIC won’t go anywhere, the big fishes will cover it up… so stop making noise!

  3. Marker

    If the president does not react then let’s find the way of impea ching him so that others can bring back our money before it’s too late.

    • Malio

      Since when has the president ever reacted?He only reacts when his hold on power is threatened by the likes of KBF,he has reached a point where he does not even mask his leadership failure, he just keeps quiet,or hopefully he will say something annoying at the airport. The man has failed and he should not try to protect himself at the expense of 17 million people

  4. mulase

    This is a very serious issue which require urgent action as opposed to playing monkey games.Imagine Wat wud happen if an ordinary Zambian was involved in this saga..he wud have been behind bars by now.Am tired nd sick of hearing high profile people being implicated in such acts but still live in Govt houses nd enjoying monthly salaries at the expense of our Zambian people.I wonder y one Chitotela with such allegations nd appearing before our courts of law should continue getting full salary wen he spends most of his time attending to court issues.Y not suspend him nd put him on half salary until he is cleared by the court?This is my earnest appeal to our President His Excellence Edgar chagwa Lungu.Mr President..don’t u wonder how yo ministers have amassed so much wealthy as to begin building upstair houses nd having Farms which ar well stocked in a short period of time?Mr President..u managed to handle the Post newspaper which according to me was the most sophisticated in a short time but taking yo time to handle yo Ministers.This Mr President is raising alot of suspicions in the mind of our poor people.I WISH U WELL

    • P.M

      Lungu will never do anything about corruption. The man is heavily involved up to his eyeballs. How does he fight a vice that he created? But hus time to answer to zambian people will surely come.

  5. Chishala Mumba Chito

    Zambians getting ‘Silent Treatment’ from His Excellency

  6. Fisunge

    The best thing to do is to mind your own business Even the ACC is corrupt in fact there the worst In case you didn’t know this is not new to Zambia the duty of the ACC is work even before this reports are released but why Shud they Wait for the report and then work where is the investigative team in the ACC?

  7. mulase

    This ACC which only investigates Ministers after they leave govt.Infact ACC itself needs to be investigated in the manner they handle issues.We ar in deep trouble.

    • Future President

      the fic released a similar report last year and if my memory serves me right no action was taken by the acc instead the fic was heavily criticized for releaseing the report to the public in case u have forgotten.

  8. Shagi

    A casual visit to New Kasama, Chalala, Salama Park, Kamwala South and other emerging residential areas of Lusaka and else where will leave you aghast to see the kinda buildings being put up by mostly young public civil servants and other law enforcement officers.

  9. mulase

    Ndalama za bewa bane osati mocheza.Baaba Mali kutali kusobana mwana okwesu.

  10. Jay Kay

    Name and Shame them.

  11. Daniel Banda

    The parable of the servants in the vineyard, did not work for the disciples immediately until Judas showed up with the killer kiss. Please just be pragmatic and give the real names of the culprits. That will be the beginning of a genuine approach to a serious solution to this killer corruption.

  12. Nyengo

    FIC Should not b a feedstock 4 opposition leaders 2 attack or paint pf total black bcoz it time 2 release names than seein a best report but empty. Last time it rised dust again but 4 how long,we solutions and not only politicans closer pf also opposition leaders remember panama saga leak. In zambia, citizens are rich with no proper source and olderly mp’s change of lifestyle but what of mp and appointd ministry same no. Now days, it is open yo brain not yo eyes bcoz every one is rushin 2 get rich. FIC president lungu bring it 2 protect zambian 2 what is happen but now we solutions bcoz we lost 6.1 million and ACC Is silent sign that our intelligence very weak we need up grade 4 save our economic. Lawyer firm are used 2 steal we need names not fake reports 2 show off and ACC HAS FAILED BETTER FIC TAKE OVER

  13. FGM

    God should quickly crack the whip on the plunderers of our meager resources. It can’t be business as usual when so many Zambians are suffering. May God save Zambia!!

  14. Jms

    Catch the culprits and impeach no wonder that name was perceived to be a foreigner whilst foreigners will never develop were he knows he/she is a nomad

  15. Mutunge bwino

    This is a matter of national interest which requires the president to take action, but he is silent on the matter. He should fire the culprits so that the police can lock down their offices for investigations

  16. Euro Bond

    I agree with one malio, the president in he’s usual leadership style will only issue a disjointed and non committal statement to pf cadres at the airport in Lusaka and Ndola. Surely this country is fucked!!

  17. Shimukokota Nsono

    The DG of ACC has either failed to perform to the expectations of the people of Zambia or the criminals have captured the leadership.
    The leaders, please save mother Zambia.
    Regards

  18. Besa koni

    ACC are all corruptable they must be fire because they know all these and since you have started with chitotela start again with Amos Chanda he thought he was untouchable use let him use insults to the person he was insulting all these has come out because of imbwili he talks the truth and its only the truth that will set someone free thanx

  19. Mazuba

    Ndelolesha fye

Comments are closed.