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FIC 2021 Trends Report records 13% increase in suspicious financial transactions

• 221 suspicious transactions were analyzed in 2021.
• Majority of them were on suspected money laundering, corruption and tax evasion.
• An entity received in excess of K70 million in cash for purposes of facilitating engagement for elections.

Financial Intelligence Centre (FIC) has disclosed that it has reported an increase in the number of suspicious financial transactions from K3.14 billion in 2020 to K3.56 billion in 2021.
Speaking during the launch of the 7th money laundering and terrorism financial trends report in Lusaka, Centre Acting Director General Liya Tembo reveals that this represents 13 percent increase.
Ms. Tembo said 221 suspicious transactions were analyzed in 2021, and majority of them were on suspected money laundering, corruption and tax evasion, adding that 44 cases were reported to law enforcement agencies.
“It was very evident that the amount of cash in the economy was unprecedented compared to 2020, we had a 12 percent increase in the number of cash transaction reports that we received.”
“We also noted that just before the 2021 General elections, the amount of cash in the public increased even more, we have a matter which we disseminated to law enforcement where an entity received in excess of K70 million in cash for purposes of facilitating engagement for elections,” Ms. Tembo revealed.
She further disclosed that the number of currency transaction reports increased to 144,000 and 45,852 cases in 2021 compared to 129,826 in 2020 and that law enforcement agencies are still investigating majority of the cases.
“What is more concerning is that we note the growing trend of spending on luxury goods, on real estate as well as in the construction sector where cash is used as a means of transaction. Of particular interest is a matter where a property was valued at K11 million, part payment of that K11 million being K7 million was paid in cash,” she stated.
Meanwhile, Ms. Tembo said the Centre noted the use of gate keepers to conceal beneficial ownership of businesses during the period under review.
She explained that in some instances, law firms were used to conceal beneficial ownership as well as foreigners mostly of Asian origin, where they would establish companies in the name of Zambian nationals.
“Beneficial ownership is basically where I may appear on paper as a shareholder, I am the one registered at PACRA but when you look at the actual transaction going on you find that the shareholders are not the ones controlling the transactions of the company.”
“We noted a trend where law firms would be used to conceal beneficial ownership, we also noted the concealing of beneficial ownership by foreigners especially of Asian origin where they would set up companies in the name of Zambians and those companies will receive huge amounts of cash and at the time of transacting, they would sign that the company wants to buy goods out of the country and when the money is sent to that foreign jurisdiction we don’t see corresponding goods coming into the country,” she said.
Speaking at the same event, Attorney General Mulilo Kabesha, who is also Chairperson of the Anti-Money Laundering Authority, said money laundering, terrorism financing and other financial crimes such as corruption can carry a number of adverse micro-economic consequences.

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