Today, money-laundering is a global problem. Measuring its impact is tough, as it takes place behind the scenes and is apparently victimless crime. Yet the damage it does can be devastating to the financial sector and to the country’s economy at large.
It affects both developed and developing countries but is more troublingly to the latter.
To date, every country’s economy largely depends upon the realization of technology. It made the job a lot easier, but it came with its own downside. Criminals are now taking advantage of the globalization of the world economy by transferring funds quickly across international borders with just one click.
The money made by various criminal activities in various parts of the world is injected into a nation’s economy to camouflage it or give it a lawful appearance. This system is known as ‘money-laundering’ and this problem is growing to serious proportions over time.
Undoubtedly, money-laundering business is proliferating at an unprecedented level. Technology has made it more undetectable. The businesses are booming and consequences are visible but regulatory bodies are also taking necessary steps, especially adopting comprehensive law or improving the existing ones.
In some instances, countries are tightening their borders, educating people, creating awareness about the danger of money-laundering.
By contrast, effective anti-money-laundering policies can reinforce a range of good-governance policies. It’s strongly believed that stronger policies and regulations would significantly close the open market for such activities.
It’s against such background that, last month, Rwanda replaced the Law n° 69/2018 of 31/08/2018 on prevention and punishment of money laundering and terrorism financing to a new one titled “law nº 75/2019 of 29/01/2020 on prevention and punishment of money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction”.
To begin with, the repealed law only envisaged money-laundering and financing of terrorism, whereas the new one, in addition to money laundering and financing of terrorism, accommodates financing of proliferation of weapons of mass destruction, and, of course, with a significant improvement aligned with the advanced technology.
To focus a little bit on money laundering, it’s generally believed that in most developing countries where it’s prevalently notorious, it’s largely due to weaker regulations and policies.
This creates more liberty for criminals. Therefore, for money laundering to be curbed, there’s a need to have stringent measures as well as well-trained and effective law enforcers. The two mechanisms, with the use of modern technology, can mitigate the challenge.
By and large, the new law is designed to improve measures against money-laundering and the financing of terrorism and to assist in detecting, seizing and confiscating illicit proceeds, as required pursuant to relevant instruments and other globally accepted standards.
The new law is intended to be adjusted to the particularities of the national legal system and administrative ways of addressing the above-mentioned three offences (e.g. money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction).
The new law, among other things, punishes each individual offence. For example, in its Article 29, it says that “a person who carries out money laundering acts” or “who involves in an association aiming at committing one of the acts of money laundering, commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than seven (7) years but not more than ten (10) years and a fine of Rwandan Francs of three (3) to five (5) times the amount of money laundered.”
The next paragraph states that “a person who facilitates another person to benefit from laundered property or funds of a terrorist or of someone who may be a terrorist, by concealing, shifting from one place to another, transferring to other people the property or funds or by any other way related to that which is referred to in this Article, commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than ten (10) years but not more than fifteen (15) years.”
Article 30 of the same law says in respect of financing terrorism “a person who carries out acts of terrorism financing” or “who involves in an association aiming at committing one of the acts of financing terrorism commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than twenty (20) years but not more than twenty-five (25) years and a fine of three (3) to five (5) times the amount of money given.”
The law equally punishes acts of financing the proliferation of weapons of mass destruction though it’s not as predominantly prevalent as money-laundering and financing of terrorism.
To underline, the ability to prevent and detect money-laundering as well as financing of terrorism hinges importantly on information-sharing with law enforcers and use of sophisticated investigative techniques.
The writer is Law Expert.
The views expressed in this article are of the author.