BY FIDELITY MHLANGA
ZIMBABWE is one of the countries at high risk of money laundering, according to a report by the Swiss based Basel Institute on governance.
The report titled Basel anti-Money Laundering (AML) Index 2021: 10th Public Edition Ranking Money Laundering and Terrorist Financing Risks Around the World, ranks Zimbabwe Number 12 out 110 covered countries.
It is designed to provide a general snapshot of money laundering trends around the world.
The Basel Institute said Zimbabwe was only behind Haiti, the Democratic Republic of the Congo (DRC), Mauritania, Myanmar, Mozambique, Cayman Islands, Madagascar, Mali, Senegal, Uganda and Cambodia in the rankings.
In sub-Saharan Africa, where 18 jurisdictions were covered, Zimbabwe is Number 8, behind the DRC, Mauritania, Mozambique, Madagascar, Mali, Senegal and Uganda.
The report said Ghana and Botswana had the least risk of money laundering in the region.
“Sub-Saharan Africa region has the highest overall risk score of all regions. Although data is lacking, of particular concern is the quality of AML / CFT (Counter Financing of Terrorism)frameworks, where some jurisdictions (Democratic Republic of the Congo and Mauritania) have a risk score over 8 out of 10. Apart from Mauritius and Botswana, most assessed jurisdictions face high risks of bribery/ corruption and financial transparency/standards. Zimbabwe’s risk score increased since 2020, due mostly to higher risks of human trafficking,” the Basel Institute said.
The report noted that higher risks across the region may in part be due to the presence of several developing economies with high levels of corruption and political/economic instability.
More coordinated regional policies and capacity building could help to bring weaker jurisdictions up to standard, it said.
The report noted that these issues need to be addressed through broader long-term policies, although more effective compliance could contribute to efforts to detect and prevent corruption.
Its article 19 Article IV Consultation-Press Release on Zimbabwe the International Monetary Fund,encouraged authorities to conduct asset quality reviews of the banking sector, develop a new framework for managing weak banks and increase the effectiveness of the AML/CFT framework, including by effectively implementing financial action task force (FATF), standards.
The Bretton Woods institution noted that substantial progress in improving the effectiveness of AML supervision, transparency of beneficial ownership information, and targeted financial sanctions will support Zimbabwe’s exit from the FATF list and help mitigate pressures on correspondent banking relationships.
The central bank in the 2021 monetary policy statement highlighted that pursuant with the unwavering commitment to ensure financial stability and integrity, it continued to enhance the oversight and supervisory processes by issuing a revised AML risk-based oversight guideline to payment services providers.
“The AML oversight guideline will continue to be underpinned by risk-based approach methodologies, with particular emphasis on the identification and understanding of money laundering and terrorist financing risks within the payment services sector which should be informed by the national and institutional risk assessments,” the central bank said.
The Basel AML index is developed and maintained by the International Centre for Asset Recovery at the Basel Institute on Governance.
The aim of the Basel AML Index is to provide a holistic picture of money laundering risks.