Draft bill to combat money- laundering before Senators

A tough law meant to combat money laundering and financing terrorism has reached the Senate.

A tough law meant to combat money laundering and financing terrorism has reached the Senate.

If the Senate—Upper Chamber Parliament, the highest decision making body in the country passes the bill and the President consents to it, then Rwanda would have made the fight against money laundering and financing of terrorism a priority.

The bill comes at a time the country does not have a legal framework, making it impossible for the financial and commercial sectors to implement some of the measures to combat money laundering.

For example, banks can only report suspicious transactions but are powerless to stop or freeze the deals because they do not have legal protection.

A police source says that the country has not registered a money laundering case, partly because their hands are tied. There is no law.

"We have only handled cases of money fraud but not money laundering," a police source who talked on condition of anonymity saying the matter is sensitive told The New Times.

Anti money laundering experts say even the National Bank of Rwanda cannot do much when it comes to individual accounts unless the account holder is on the list of individuals under UN sanctions or is a listed terrorist as per UN Security Council Resolution 1373 of 28 September 2001.

Those who have looked at the draft bill say it is intended to cut off the resources available to terrorists, and making it more difficult for those engaged in crime to profit from their criminal activities.

Fracoise Kanimba, National Bank of Rwanda Governor said the law must be enacted soon warning that money laundering can have devastating economic consequences.

"Fighting it (money laundering) should be a priority to all countries."

Kanimba also warns that if it is not checked, money laundering disturbs orderly competition, damages reputation and threatens the soundness and safety of financial systems.

Money-laundering, a global serious crime, is described as a process of turning illegitimately obtained property into seemingly legitimate ones and it includes concealing, or disguising the nature, sources, location, deposition or movement of the proceeds of the crime.

At one time IMF estimated that $590 billion (Frw322 trillion) of illicit funds is circulate worldwide annually.

It’s in this regard that the government organised a one day workshop to sensitise stakeholders in the ongoing efforts to fight against money laundering and financial terrorism.

The governor said money laundering becomes the source of corruption and undermines good governance principles.

Challenges

Anti-money laundering campaign faces serious challenges with the rapid economic development, advancement of ICT and frequent international capital movement.

"To address these challenges it’s essential to strengthen and improve our legal systems, institutional framework, and the supervision of our financial sector and encourage international cooperation, Kanimba advised.

The government also intends to setup a financial intelligence unit (FIU) after the money laundering bill is passed. The police, legal fraternity and financial sector the unit. The unit will be responsible for receiving suspicious reports and suspicious transactions.

Delphine Schantz, a representative from United Nations Office on Drugs and Crime said: "As Rwanda grows the law is necessary, Government doesn’t know its prospective investors thus will need solid measures in place to combat money laundering and financing terrorism."

Schantz and his colleague, Wayne Blackburn facilitated the workshop.

Banks on alert

Hannington Namara, a Rwanda Commercial Bank marketing manager, said that currently the Bank, forex bureaus and money remitters use the know-your-customer (KYC) policy, a procedure recommended by International Monetary Fund.

Commercial banks are required to report any huge money transfers to the central bank.

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