Zambia loses K6.1 billion in fraud; Laura says country a jungle of criminality

By Staff Reporter

Zambia has incurred losses estimated at K6.1 billion, about US$540 million linked to financial crimes such as tax evasion, fraud, corruption and money laundering activities.

And activist Laura Miti, commenting on the revelations said Zambia had become, “a jungle of criminality”.

According to the 2018 money laundering/terrorist financing trends report, the revelations show an increase from the K4.5 billion recorded in the 2017 Financial Intelligence Center (FIC) trends report.

FIC Director General Mary Chirwa said the Centre analyzed 176 suspicious transactions of which 80 were disseminated to law enforcement agencies on suspicion of covering tax evasion, fraud, corruption and money laundering.

Chirwa said that the most prevalent forms of corruption noted in 2018 were those involving bribery and conflict of interest.

She said that during the year, the Center disseminated reports on corruption with estimated value of K4.9 billion with public procurement activities being significantly vulnerable to corruption.

And some law firms have been cited in the latest FIC trends report as a vehicle used for money laundering activities by criminals.

The report said that identified law firms assisted suspected criminals to mask the source of funds and aided its reinvestment or movement to foreign jurisdictions.

The center analysed cases related to nine law firms amounting to K385 million in 2018, which 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.

The report also noted that persons, especially from foreign jurisdictions working for these casinos, had bank accounts in Zambia that received large cash deposits which were followed by large outward transfers, mostly to their home jurisdictions.

The report further indicated that some casinos are using employees and shareholders as cash couriers.

The Centre said that some of the casinos are not compliant with the local law requirements prescribed by the Zambia Revenue Authority (ZRA) or the Licensing Committee under the Ministry of Tourism and Arts.

Meanwhile, the centre has noticed a trend where some individuals were in 2018 involved in environmental crimes.

The report has indicated that it has continued to see timber sales in regions where endangered Rosewood commonly known as “Mukula” is being traded.

The Centre has also analysed cases in which individuals trading in the prohibited Mukula declared timber as their source of funds.

According to the report, the Centre received Suspicious Transaction Reports related to timber valued at over K2,156,000 with many of the individuals in the illegal trade of Mukula establishing other businesses through which the proceeds were laundered.

The report said that the areas most affected were Manyinga and Mufumbwe in North-Western Province.

The FIC has further noted that foreign nationals continue to engage locals to illegally harvest the endangered tree for subsequent transportation out of the country, mostly to Asia.