Government to set up anti-terror financing, money laundering unit
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The Government is set to establish a unit that will work closely with the National Bank of Rwanda and security organs to combat money laundering and financing of terrorism.
Central bank governor John Rwangombwa said there is a growing number of mafias and money launderers across the region, hence the need to put in place mechanisms to minimise such crime in the country.
Rwangombwa and officials from the Ministry of Justice (under whose docket Police falls), Ministry of Finance and Economic Planning, and National Public Prosecution Authority, were appearing before the parliamentary Standing Committee on Budget and Patrimony, yesterday, to defend the Anti-Money Laundering and Combating Terrorism Financing Bill.
“It is difficult to completely prevent money laundering but with regulations in place and a specialised unit, we can build strong institutions that can reduce such risks,” Rwangombwa said.
He admitted that an assessment made in as far as combating these vices in Rwanda has shown “some gaps.”
“We have an assessment report that has shown all the gaps and we are putting in place a plan to address such issues and one (of the mechanisms) was to come up with a law to make us comform with the international standards in terms of restrictions and the second was to make our financial intelligence unit independent and more active,” Rwangombwa added.
He also noted that other mechanisms to combat money laundering and financing of terrorism was to bring in other institutions that are more likely to be used by money launderers like the non-governmental organisations and insurance companies, property dealers and gaming firms, among others.
Financial intelligence unit, Rwangombwa said, will be part of the enforcement body of the law on anti-money laundering and financing of terrorism and it will fill the gaps highlighted by the assessment.
The Bill proposes that the unit would operate under the central bank but legislators are of the view that it operates independently once set up.
Conflict of interests?
Despite some international regulations put in place to combat money laundering and financing of terrorism, some countries are rather reluctant to clamp down on mafias involved for both political and economic reasons, legislators say.
MP Francesca Tengera said some “powerful countries” sign international conventions to suppress transnational crimes, including money laundering and financing of terrorism but are hesitant to adhere to their commitments, hence questioning the possibility of bringing total end to such crimes because of conflicting interests.
Committee chairperson Constance Rwaka Mukayuhi urged the Government to help put diplomatic pressure on some of the countries that are seemingly hesitant to crackdown on terrorism financing and money launderers.
“People benefit from this dirty money but that shouldn’t be an excuse for insecurity. And that is why we have these international and local mechanisms to fight these illegal benefits from illegal sources,” Rwangombwa added.
Loan sharks on the spot
According to Governor Rwangombwa, illegal money lenders, commonly known as loan sharks or Bank Lambert, are more likely to facilitate the growth of money laundering in the country the reason the Government is encouraging the transition to cashless transactions.
With cashless economy, he said, regulators will be able to trace one’s financial sources and establish if they are illegal or legal.
“If someone has posted some amount that is rather unusual on their bank accounts, the financial intelligence unit will investigate to identify the source. Cashless transactions will go a long way in helping address such issues,” the governor added.
Justice minister Johnston Busingye said that despite the difficulty in combating money laundering and financing of terrorism, putting in place the legal framework and establishing the financial intelligence unit will encourage growth of strong institutions and a mindset free from such crimes.
“The biggest advantage we have as Rwanda is the already existing good will of the government that facilitates the establishment of strong institutions to fight these transnational crimes,” Busingye said.
The committee is now set to deliberate on the Anti-Money Laundering and Combating Terrorism Financing Bill and it is expected to be passed in time before the revised penal code is endorsed.