Parliament has ratified Rwanda’s membership of the Eastern and Southern Africa Anti-Money Laundering Group.
Money laundering involves crafting the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, have originated from a legitimate source.
By joining the body that comprises 19 African countries and 19 international partners, including UK, US, World Bank and International Monetary Fund, Rwanda seeks to increase preparedness against the vice.
The draft law was last week presented before lawmakers by Dr Uzziel Ndagijimana, the minister of state for economic planning.
Being part of the body will see Rwanda share information and legal assistance between financial intelligence units to improve capacities in tackling money laundering.
“Our region is prone to money laundering. We need to be prepared, exchange information with other countries and support each other in updating regulations and laws on money laundering as it is a dynamic trend,” he said.
Tanzania and Kenya are also members of the body.
“We share information and have similar instruments. In this region, we have some terrorist movements such as Al-Shaabab, which have made countries like Kenya vulnerable,” he said.
Rwanda joined the body as an observer in 2012 but will become a full member once the instruments of ratification are signed.
The body is a member of an international umbrella organisation based in France that deals with regulations and standards aiming at fighting money laundering activities.
Rwanda has internal mechanism to deal with money laundering, including regulatory and legal framework.
In 2008, a law on prevention and penalising the crime of money laundering and financing terrorism was passed and is implemented under the oversight of the central bank.
Financial sector experts say the move is important, noting that money laundering is increasingly becoming prevalent in developing economies.
Allan Gichuhi, the Ernst & Young Rwanda partner, told The New Times that the vice is a growing concern in developing countries and countries are coming up with multiple mechanisms to combat it.
“Money laundering goes along with illicit trade, drug dealing, human trafficking, and financing of terrorist activities,” he said.
Earlier this year when the central bank put a moratorium on the licensing of new forex bureaus, it cited rise in malpractices such as money laundering.