Understanding the role of RNP in combating financial crimes

The G7 summit held in Paris, France in 1989 recommended that all countries across the world establish a central Financial Investigation Unit (FIU). In implementing this decision, Rwanda through Rwanda National Police created the unit in 2011, to join the 112 countries worldwide that have so far heeded the Group of Seven most industrialised countries, commonly known as G7, call. In East Africa, Tanzania was the first country to establish the centre in 2007, Kenya in 2012 and Uganda in 2014. ACP Joseph Costa Habyara, the director of FIU, spoke to The New Times on the unit’s four-year journey and future plans: Briefly, tell us what Financial Intelligence Unit is all about The unit, known as Financial Investigation Unit or Financial Intelligence Unit, depending on the country, is a national reporting centre responsible for collecting information, analysing and disseminating it to key stakeholders, as well as carrying out investigations in a view of combating money laundering and financing terrorism. The Rwanda National Police unit has its headquarters at the National Bank of Rwanda. Why did Rwanda wait until 2011 to have this central agency in place? We had to follow appropriate procedures before we could set up the unit, including putting in place a law establishing agency; and defining its duties and responsibilities. The World Bank conducted a study between 2004 and 2005 on the threats posed by money laundering and financing terrorism in Rwanda, and recommended having a law in place to handle the two issues. This lead to enactment of law No:047/2008 of 9/9/2008 which outline prevention ways, and penalties for the crime of money laundering and financing terrorism. Article 20 of this law stipulates that the FIU will be put in place by a Presidential Order. Thus, the Presidential Order No:27/01 of 30/5/2011 was enacted, leading to the formation of FIU. It has its own advisory board chaired by the Governor of National Bank of Rwanda, with the Prosecutor General as the deputy. Other members include the Commissioner General of the Rwanda Revenue Authority, the deputy Ombudsman in charge of fighting corruption, the Director General of External Services in NISS, Director General in charge of Financial Sector Development at the Ministry of Finance, the Commissioner for Criminal Investigation Department (CID), and the Director of FIU, who is also the board secretary. What has FIU achieved four years down the road? All the 16 commercial banks and micro-finance banks have money laundering reporting officers following our advice; we designed an STR (Suspicious Transaction Report) format that helps financial institutions to report online suspicious transactions to FIU; we played a role in establishing a fraud forum, and a compliance forum, where we meet quarterly or when deemed necessary to discuss and share notes, especially on new development or threats. The forums involve key stakeholders, like telecoms, banks, capital markets, Police, forex bureaus, Visa card, who jointly review and take measures in fighting fraud, as well as ensure that internal rules and regulations against money laundering are adhered to. Reporting entities, including banks, forex bureaus, insurance and money remittance companies, real estate agencies, dealers in precious metals, casinos, NGOs, travel agencies and auditors, are required by law to comply and report suspicious transactions to FIU. We have also conducted various trainings and attended regional and international workshops in India, South Korea, Kenya, Egypt, Burundi and Tanzania, where we gain new ideas on how better to fight money laundering and terrorism financing. In 2012, Rwanda applied to be an observer member in the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which status was granted the same year. Rwanda also applied to be a full member in 2014 during a meeting held in Luanda, Angola which was approved and currently, there are ongoing legal formalities to be fully admitted as the eighteenth member state. As part of the preventive measures, we formulated directives on record-keeping, identification of customers and suspicious transactions reporting – which were approved by the FIU advisory board meeting on December 2, 2015. These directives indicate modalities of reporting suspicious transactions, how to identify customers, as well how to conduct customer due diligence, and how to keep records. On cash couriers, we are still devising ways of harmonising it in line with other countries. You mentioned that the sole role of FIU is to combat money laundering and financing terrorism. Have you handled such cases so far? How have you dealt with them? During FIU operations, we froze and stopped suspicious bank transactions equivalent to $210,000 (about Rwf161.7 million) in 2012, $160,000 (about Rwf123.2 million) in 2014, and 22 suspicious bank accounts were frozen in 2015. But after investigations, we found no connection or evidence related to money laundering or terrorism financing. When we freeze a transaction, we have 48 hours to decide whether to defreeze it, or alternatively, submit the case to the prosecutor’s office for further action. Any challenges so far? Financial crimes, like most other crimes, are changing forms because of technological development. This creates challenges in terms of adequate skills in investigations and detection. However, we are embarking on adequate training, applying modern software and technology in analysis, investigation and detection. With our active advisory board, we hope to develop the capacity of the team as we look to achieve more. What is your message to businesses, financial institutions and the general public? The business community should always use appropriate channels in their daily transactions to ensure financial safety and transparency. We urge financial institutions to follow the law and directives as part of their responsibilities to help fight these crimes.

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Understanding the role of RNP in combating financial crimes