Finance Minister Yusuf Murangwa has called for anti-money laundering and counter-terrorism financing measures that protect the financial system without making it harder for legitimate businesses and customers to access financial services.
He was speaking on Friday, September 4, during the 26th Council of Ministers Meeting of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).
Murangwa said stronger safeguards against financial crime should go hand in hand with supporting legitimate economic activity, warning against an approach that focuses heavily on compliance while overlooking its impact on businesses and financial inclusion.
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"Our Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) frameworks must be effective, but they must also support legitimate economic activity and access to financial services,” Murangwa said.
The minister said countries in the region have made progress in putting in place laws, regulations and institutions to combat money laundering and terrorism financing.
However, he said the next step should be to ensure that these systems work effectively in practice.
"Mutual evaluation should be a key component and a tool to understand compliance with international standards and what more is needed to help them identify what needs to improve in order to make their systems more effective,” he said.
"Evaluation reports and subsequent follow-up should ultimately lead to improvements in effectiveness rather than becoming exercises focused only on technical compliance.”
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This means, he said, judging AML/CFT systems by their ability to produce reliable results, protect the integrity of the financial system and support inclusive economic growth.
ESAAMLG Executive Secretary Zitha Fikile Philda said the changing nature of financial crime means countries can no longer rely on laws and institutions alone.
She said criminals, terrorist networks and other actors are increasingly exploiting technology, cross-border financial systems and corporate structures to move and conceal proceeds of crime.
"Our response must therefore evolve. This requires more than the establishment of laws, regulations and institutions. It requires systems that are effective in practice and capable of producing meaningful results,” Philda said.
"The region had made progress in building the legal and institutional foundations needed to combat money laundering and terrorist financing, but the priority should now be ensuring those foundations translate into measurable outcomes.”
Zitha said mutual evaluations should similarly be treated as more than assessment exercises.
"Mutual evaluations should not be viewed simply as an assessment exercise. They provide a strategic opportunity to identify weaknesses, strengthen institutions and demonstrate that our AML/CFT/CPF systems are delivering meaningful results,” she said.
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She also warned that the growing sophistication of financial crime, terrorist financing and proliferation financing requires countries to work more closely across borders.
"No country can address these challenges,” Zitha said, calling for sustained political commitment, effective regional cooperation and stronger institutional capacity.
Gashumba Jeanne Pauline, the Director General of Rwanda’s Financial Intelligence Centre and Chairperson of the Task Force of Senior Officials, said the region had also been examining how AML/CFT/CPF measures can remain effective without undermining financial inclusion.
She said the Task Force had discussed financial inclusion, de-risking and fintech, with emphasis on ensuring that measures remain risk-based and proportionate.
"The revisions are of strategic importance to our region, they safeguard the integrity of cross-border payment channels, reinforce confidence in financial systems and reduce vulnerabilities to money laundering and terrorist financing,” Gashumba said.
"Early preparation will help countries build payment systems that are not only compliant, but also more transparent, resilient and inclusive. The Task Force also considered emerging threats, including illicit financial flows linked to modern slavery, illicit wildlife trade and the misuse of front companies to launder money.”
Gashumba said the region was also taking stock of progress under its previous mutual evaluation round as countries prepare for the third round of assessments.
"Technical compliance, while necessary, is not sufficient,” she said.
"The ultimate measure of success is the ability of our systems to deliver tangible and demonstrable results, through quality financial intelligence, effective investigations and prosecutions, successful asset recovery, and the disruption of illicit financial flows and networks that threaten our economies, security, and development.”
Senate President Kalinda François-Xavier who opened the 26th ESAAMLG Council of Ministers, called for stronger efforts to combat illicit financial flows, money laundering and terrorist financing, alongside mechanisms for recovering stolen assets.
"The measures used to fight financial crime should not end up excluding legitimate users from the financial system or unnecessarily hindering economic activity. Our objective is not to make legitimate business that we need to have or exclude individuals from the formal financial system, or stigmatise entire sectors, communities or categories of customers as inherently suspicious,” he said.
He called for AML/CFT/CPF measures that are risk-based, proportionate and targeted, saying financial inclusion should remain an important consideration for the region.
"Greater use of technology, data analytics and artificial intelligence should be used to identify risks, trace financial flows and disrupt criminal networks, while stressing the need for accountability, transparency and respect for rights,” he said.