FIC Report Details K450m In Money Laundering
The Financial Intelligence Centre (FIC) 2019 Money Laundering Trends Report has been released, following a short delay.
While the report shows a reduction in tax evasion cases the dissemination of proceeds of crime from corruption and tax evasion rose from K195 million in 2018 to K$59 million in 2019.
“It was observed that individuals used their positions in public institutions to influence the awarding of contracts to companies in exchange for gratification in the form of cash, real estate and motor vehicles. There were also a number of reports to the Centre on suspected corruption that bordered specifically on fraud and/or bribery. Public servants were the perpetrators who were paid in order to grant favours to businesspersons, especially foreign nationals,” the report states.
“One of the major sources of corruption continues to be single sourcing of projects which are non-competitive. The contraction of loans on these projects also attracts usury arrangement fees, in some instances up to 9 % of the amount of loan contracted. These fees are distributed between agents and persons responsible for the projects in public institutions. Projects under the Public Private Partnership (PPP) arrangements and loans contracted by quasi Government bodies from private entities are of particular concern.”
Commenting on the released report Alliance for Community Action Executive Director Laura Miti says the report shows that “the powerful are still bleeding Zambia.”
“The summary of the released FIC report is that public money continues to disturbingly enrich power holders with individuals becoming inexplicably wealthy after taking office,” Miti writes.
“The debt that is strangling the Zambian economy is still being recklessly contracted, with no care about the meltdown it has caused, because individuals are getting filthy rich from commissions. So, citizens have been ladened with a huge debt that is taking away money meant for basic services like medicines, bursaries and salaries simply because those in power get cuts of millions, for signing on the dotted line,” she continues.
“Our Mukula is being sold despite the ban and, again, the money is going to private pockets. So a diminishing resource is being exploited and the treasury gets nothing,” Miti claims.
According to Miti money laundering has doubled while suspicions transactions have plummeted.
“The FIC complains that payments in procurement processes are irregularly done thus avoiding scrutiny. Huge financial transactions are also being done in cash thus avoiding leaving a trail. The powerful routinely use third parties to distance themselves from illegal transactions,” she narrates.
Miti says that lawyers are playing a role in facilitating grand theft, especially through tax evasion. She claims that the lawyers are assisted by accountants.
“The long story short is that powerholders continue to bleed the country and are getting cleverer at it. The reason, of course, is that the corrupt and thieving can depend on the unequivocal support of the president when the public demands that they be punished. I guess we will be hearing from President Lungu again - making it clear that the corrupt are not to be touched,” she concludes.
Miti also notes that the FIC has stated that it is facing significant financial and human resource constraints.