LAST week the financial intelligence unit (FIU) hosted an anti-money laundering and financial crime – public and private sector dialogue conference. The conference underscored the importance of public and private sector partnerships in fighting financial crimes.
The FIU is responsible for fully implementing domestic, regional and international best practices and standards on anti-money laundering and counter-financing of terrorism, with particular emphasis on achieving effectiveness in line with the Financial Action Task Force standards.
Our group managing editor Adelaide Moyo (AM) caught up with the FIU director general Oliver Chiperesa (OC) to get insights into what is Zimbabwe doing to fight financial crimes and how much the country is losing to illicit financial flows. Below are the excerpts from the interview.
AM: Why is it important for the public and the private sector to collaborate in financial crimes?
OC: In the anti-money laundering and counter-financing of terrorism landscape, we have different players with different roles. The private sector plays a key role especially financial institutions because they are the ones who we refer to as the gatekeepers to the financial system, to the economy. They are the ones through whom financial transactions are conducted so they detect these transactions even before law enforcement agencies and authorities are able to detect them. So it is important that the private sector is made aware of the money laundering risks and be educated so that they can play that keeper role effectively in identifying the financial transactions that are suspicious and refer them to law enforcement agencies, to the FIU for further analysis and further investigations. The public sector cannot fight money laundering and other financial crimes alone. They rely on the private sector and not just banks, there are different number of designated professionals who also deal with clients who come for their services to be assisted in laundering funds in the system. So you will see that even estate agents, accountants and lawyers can unwittingly be misused for injecting illicitly acquired funds into the system. In the dialogue, we had banks, stock brokers, insurance companies, lawyers, casinos, precious stone and precious metal dealers from the private sector working together with the regulators, the FIU, the central bank, the Securities and Exchange Commission and the stock exchange. The whole point was to put our heads together because we play complementary roles in the fight against money laundering.
AM: What were some of the key takeaways that will be taken forward for next year’s dialogue?
OC: This year’s theme for the conference was how we can use technology especially artificial intelligence to combat financial crimes. What we have noted is that criminals are increasingly making use of technology, the advancement of technology is making it easier for criminals to move funds and use various applications and technologies that make it hard for us to detect them. So we also need to equally respond using technology as well. The main point of the conference was to give us ideas on how we can enhance the use of technology both as the financial institutions that monitor transactions and then as regulators and law enforcement agencies. Our expectation is that going forward, we are going to put together the ideas that we got from stakeholders then sit down with banks and other sectors and see how they can take on board which technological solutions they need to put into place to more effectively monitor transactions and detect criminal behaviour in the financial system.
AM: Does Zimbabwe have the capacity and technical expertise to do that?
OC: Capacity just comes in terms of human resources and getting the right technology. I think the technology is getting cheaper and cheaper it is just a question of understanding what you want. In terms of capacity, I have seen that a number of our universities are now producing very competent and capable graduates in IT systems, data analytics, and artificial intelligence. We already have recruited quite a number of young officers but we will continue to identify those we can groom and grow with so that they can use these technologies to fight financial crimes.
AM: How much did we lose to financial crimes last year?
OC: Our estimation is that Zimbabwe loses between US$1 billion and US$1,5 billion a year through illicit financial flows. Illicit financial flows are a collective term to refer to various illegal activities including tax evasion, corruption, smuggling, fraud, and embezzlement. This is an estimation but we have various literature that give different figures. We do periodic risk assessments where we sit down with all the stakeholders that were in the conference and put together data and we use a World Bank tool to estimate these losses. To me, the issue is not so much about the exact figure but just the recognition that we are losing a significant amount of money as a country through illicit financial flows and what we need to do is come up with solutions and be more effective in terms of fighting the illicit financial flows. This is why earlier in the week, the theme among the heads of FIUs was regional and international cooperation but regional and international cooperation cannot be effective if there is no domestic cooperation. The two conferences that we had this week, the regional one and the local one, tie in together. The second one has to do with improving effectiveness at a domestic level.
AM: Zimbabwe was removed from the Financial Action Task Force (FATF) grey list last year, what is FIU doing to ensure that we stay on course in terms of best practices and standards?
OC: The particular conference that we had, the public and private sector dialogue, is one of the many initiatives that we undertake to make sure all the stakeholders are sensitised and continue to be aware of the money laundering risks that are there so that they continue to implement in their respective sectors and institutions. It’s continuing to raise awareness to make sure that all the different stakeholders that were at the conference play their different roles at the institutional level. The FIU is just there to coordinate at the national level. But apart from that we have passed various pieces of legislation in the past as a country. In his opening remarks, the minister of Justice made mention that Zimbabwe is one of the most compliant countries in the region in terms of its laws and institutional framework in terms of money laundering. The FATF has recognised that. But a lot of work still needs to be done in terms of effectiveness in implementing those laws. Having good laws is one thing and we are proud of that but also effectively using those laws to fight money laundering and bringing results is where we still find ourselves with a mountain to climb.