Dora joins criticism against FIC

By Staff Reporter 

Chief Government spokesperson Dora Siliya says the Financial Intelligence Centre (FIC) is jeopardising cases that are under investigation by publishing half-baked intelligence data.

Meanwhile, Drug Enforcement Commission has criticized FIC handling of the intelligence information.

Speaking on ZNBC’s Sunday interview, Siliya said some of the cases cited were already before the courts and under investigation.

Siliya warned that it was dangerous to alarm the nation with alleged report of criminality without providing any details and evidence, and that, instead of rumour mongering, FIC should give the information to other government wings for further processing.

But Financial Intelligence Centre Director General Mary Chirwa has said that the publication of the F.I.C report to the public was within its mandate.

Chirwa said that the report was as a result of strategic analysis and did not contain sensitive or confidential information. 

“The institution has only distributed the same report to the President, Public and various stakeholders,” she said.

Chirwa said F.I.C added value to suspicious transaction report which was only distributed to the law enforcement agencies depending on the underlying crime that has been identified.

Chirwa said that Government should be praised for the work that the F.I.C was doing because it clearly shows that President Edgar Lungu is not interfering with its operations, and further urged the public to read the law.

And Siliya said that the institution is very important, but its work will be diluted if it is politicized.

She said that it was professionally wrong to allege criminality before you hear from those that have been accused, adding that FIC did not have the mandate to find anyone guilty as that is the duty of the courts.

Meanwhile, governance expert Maurice Malambo has said that the FIC’s criteria to release information to the public before the conclusion of investigations on perceived financial crimes is tarnishing Zambia’s image internationally.

Malambo observed that the situation was creating a wrong perception that the corruption levels in Zambia were high which was also eroding investor confidence, and that the situation is jeopardizing investigations.

He also called on the FIC to start channeling information on perceived financial crimes to the investigative wings instead of releasing it to the public.

Malambo echoed sentiments to amend the FIC Act to restrict the institution from releasing information to the public before the conclusion of investigations.

Meanwhile, Zambia Revenue Authority (ZRA) has vowed to collect Taxes highlighted in the Financial Intelligence Centre, report, once the Report is handed to them.

In a statement, ZRA Corporate Communications Manager Topsy Sikalinda said the Authority was yet to receive the report from FIC.

Sikalinda said that the authority was mandated to collect taxes and will await the fine details of the report to ensure it collects the required taxes if they are collectable.

The recent revelations by FIC revealed that an estimated revenue amounting to K1 billion was lost through tax evasion and possible violations under the Income Tax Act chapter 323 and Customs and Excise Act chapter 322.

The report also highlights that “tax evasion schemes involved individuals or corporation misrepresenting their income to the Zambia Revenue Authority (ZRA).

Many of the cases analyzed on suspected tax evasion involved small and medium enterprises (SMEs) which are mostly entities either not registered for tax purposes or were not tax compliant.

Meanwhile, DEC has expressed concern with the manner in which the FIC publishes raw intelligence data to the members of the public.

Speaking at a media briefing in Lusaka Friday, DEC Commissioner Alita Mbahwe said that there were currently 16 cases under investigations.

” I wish to state that the Commission received sixteen (16) cases out of the total number of report indicated as being disseminated to law enforcement agencies, accounting for 20% and approximately K22 million of the total amount indicated in the FIC Trends Report. The sixteen cases are currently under investigation at various stages and we will update members of the public on the action taken at an opportune time in order to avoid jeopardising the legal prospects of the cases,” Mbahwe said.

“We have been left with no option but to set the record straight in view of the impression created in which law enforcement agencies such as the DEC are seen to be inert or inept in the investigation of intelligence reports disseminated. While we appreciate that the role of the Financial Intelligence Centre is to educate the public and reporting entities of their obligations as well as inform them of measures to detect, prevent and deter money laundering and financing of terrorism or proliferation, we are of the view that this report should not be published in the manner it has been in the past few years.

Information can either be constructive or destructive depending on how it is managed or disseminated. It is, therefore, important that information is disseminated to the rightful audience in line with a well thought out communication strategy to avoid speculation and undue pressure on Investigative Wings.”
She said the FIC has different information prepared for different audiences and not the current trend.

“This, therefore, means that the FIC should have different information prepared for their different audiences and not the current trend. We are concerned with the publication of raw intelligence data as it actually compromises investigations by law enforcement agencies. This is because the same intelligence report disseminated to law enforcement agencies is also disseminated to the public and, therefore, jeopardises investigations as the perpetrators are alerted and begin to destroy vital evidence. In some cases due to the manner in which information is verified foreign nationals have fled the country upon realising that they are under investigation following enquiries made by the FIC.”

“Further, the intelligence reports disseminated to law enforcement agencies such as the Drug Enforcement Commission sometimes turn out to be false on enquiry leading to closure of cases, a situation which is always misconstrued as inaction by investigative wings. In certain instances, the method of intelligence gathering used, such as seizure of documents from various institutions affects the quality of our investigations as other supporting documents that may not have been collected are destroyed before investigative wings move in. This in some situations leads to closure of cases due to insufficient evidence or closure due to un-detection. The Drug Enforcement Commission is by law mandated to investigate reports of money laundering and related financial crimes as provided in the Prohibition and Prevention of Money Laundering Act No. 14 of 2001 as amended by Act 44 of 2010. In this regard, you will be interested to note that the Commission receives several reports from various stakeholders. From January – December, 2018 the Commission received 308 financial intelligence reports for investigation and that includes dissemination from the FIC. Further, of the 308 reports, 45 were from the Auditor General’s Report while 247 were from members of the public,” she said.

She said despite the workload and complex nature of Money Laundering investigations, the Commission has been working round the clock to ensure that each report is treated on a case-by-case basis by looking at the merits of each individual case for eventual arrest and prosecution.

Mbahwe said Money Laundering cases take a long time to be concluded.

” As such, I wish to assure members of the public that the Commission is actively working to fulfil its mandate and contribute to the socioeconomic development of the nation. We have on several occasions engaged the Financial Intelligence Centre on the need to review their modus operandi to avoid compromising investigations as well as creating a false impression. It is our hope that steps will be taken in this regard because part of the assessment criteria for money laundering compliance with international standards is the effective collaboration between law enforcement agencies and the Financial Intelligence Centre. There is need for effective collaboration and coordination if we are to fight all offences such as corruption, tax evasion, fraud, drug trafficking and money laundering in Zambia.”

 “The Commission, therefore, remains committed to the fight against money laundering and other related financial crimes which negatively affect the nation’s economic development. We also remain open to collaborate with all stakeholders in order to effectively enforce the law for the betterment of the nation,” Mbahwe said.

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