Stopping illicit flows in their tracks

Stopping illicit flows in their tracks

STAFF REPORTER
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Namibia is reviewing her current legislations to curb the flow of illicit finances and any movement of suspicious capital in and out of the country. The purpose is to “close any loopholes” in the system, according to government’s own admission to New Era Weekend.

The review was prompted by the high profile arrest of four Chinese nationals, including prominent businessman and politically connected Yuiqua ‘Jack’ Huang, and a Namibian businessman Julius Laurentius.

Nevertheless both the Treasury and Bank of Namibia, as the regulator of money flow in and out of the country, are adamant the current system does work, even though it might have some shortcomings that come naturally over time.
Tao Huizhong, Jinrong Huang, Zhu Honggang, businessman Huang and Walvis Bay based businessman Laurentius, were arrested after being charged for contravening the various sections of the Prevention of Organised Crime Act.

They are accused of knowingly colluding to launder money, which is proceeding of illegal activities, and for tax evasion and fraud.

It was these loopholes that, the State argues in the ongoing court case, the five men – including a Namibian national and businessman – exploited and managed to route nearly N$3,5 billion out of Namibia in a period of six years before they got arrested.

The men are further charged with fraud because they lied to customs officials at the ministry by submitting false or manipulated import documentation to send a vast amount of money out of Namibia, mostly to China. The men are also accused of devaluing goods to customs authorities in order to evade the payment of customs duties.

The charge sheet for Huizhong, is particularly interesting, because it alleges that between 05 May 2009 and 07 July 2009 he engaged in money laundering by “acquiring, using, having possession of or bringing into, or taking out of, Namibia, property while [he] knew or ought reasonably to have known that it is or forms part of proceeds of unlawful activities.”

The charge sheet for others indicate that their involvement in the laundering of “proceeds of unlawful activities” only started in January 2010 until 19 December 2016.

Huizhong, Jinrong and Laurentius are out on bail of N$1,5 million each. Honggang, was granted bail of N$500 000. Huang is out on bail of N$1 million.

Bank of Namibia’s Governor, Iipumbu Shiimi, says the arrests follow an exhaustive period of investigations by the Financial Intelligence Centre.

“We picked it up because the system works. Someone has been investigating, for a long time actually,” he says, adding that credit must be given where it is due.

A fortnight ago finance minister Calle Schlettwein responded to the question on the integrity of the monitoring system, by pointing out that the country’s Financial Intelligence Centre is relatively new.
Yet, it still managed to detect the irregularities, “for me that shows that the system works.”

The Financial Intelligence Unit came into existence in 2012 as a statutory body to specifically assist with combatting money laundering and financing of terrorism.

Its other task is to combat other financial crimes within the borders of Namibia, and protect the integrity and stability of the financial system, by monitoring and supervising the anti-money laundering and anti-financing of terrorism controls and systems implemented by businesses that are vulnerable to money laundering or terrorist financing and by producing intelligence products that incorporate the analysis of relevant classified information.
“Of course where the system has weaknesses, the loopholes must be fixed,” says Shiimi.

In response to detailed questions, Bank of Namibia’ deputy director of corporate communications, Kazembiree Zemburuka, said “the current legislative framework is under review with the aim of closing any loopholes resulting from the passage of time and to incorporate global best practice in the administration of exchange control in Namibia.”

Zemburuka also says that in addition to the enforcement of the law by the relevant agencies, the Bank of Namibia continues to support the Namibian Police and Customs and Immigration officials to curb illegal trade in foreign exchange through numerous training interventions.

The arrests dominating the headlines, he says, are an indication that the Bank of Namibia’s “interventions are bearing fruit.”

This is taking place at a time when African governments, under the auspices of the UN’s Economic Commission for Africa are looking at how to stop the illicit flow of finance, from the continent. It was during the November meeting in Nairobi, Kenya, that African technocrats agreed top impetus to the fight to stop the bleeding that is costing the continent over N$650 billion annually. Their recommendations were put into the report handed to the African Union summit in January, during the Heads of State and Government meeting.

Laurentius is the owner of a transport and customs clearing company, Extreme Customs Clearing Services (XCCS) which has branches in Walvis Bay, Luderitz – both coastal port towns – and Keetmanshoop, which is also an entry town for goods and people via South Africa.

With the exception of Huang, the other Chinese nationals run shops at Oshikango border post while one is an employee at a shop at the border post.

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