THE Financial Intelligence Centre (FIC) says around N$5,7 billion that was circulated in Namibia between 2009 to 2016 was suspected to be linked to criminals.
However, the centre only blocked N$54 million of the N$5,7 billion between 2010 and 2016.
This is according to figures found in a presentation by FIC, and its 2016 annual report published in July this year.
FIC is a financial crime-busting investigative unit under the Bank of Namibia.
The centre monitors financial transactions, including money-laundering, the funding of terrorism and other financial crimes known as ‘dirty money’.
A document by FIC director Leonie Dunn presented at the University of Namibia last year shows that Namibia is increasingly becoming home to money laundering.
Dunn’s presentation, seen by The Namibian, said investigations found that N$5,7 billion was flagged as potential proceeds of crime from 2009 to June 2016.
The FIC is empowered by the Financial Intelligence Act to direct institutions such as banks to stop transactions linked to money laundering or the financing of terrorism.
According to the presentation, the centre flagged N$160 million in 2009; N$180 million in 2010; while in 2011, crime-linked money tripled to N$630 million.
The amounts kept increasing per year, with N$890 million flagged in 2012, and N$1,7 billion flagged in 2013.
The suspected crime proceeds went down to N$220 million in 2014, but the figure went up again to N$975 million in 2015, before dropping a bit to N$910 million in June last year.
The Bank of Namibia and the FIC did not answer detailed questions sent to them over a year ago by The Namibian, despite promises to do so.
The questions focused on the impact, remedies and statistics of illicit financial flows in the country.
Illicit financial flows involve money illegally earned, transferred or used which crosses national borders. Culprits are usually multinational companies and criminals.
The FIC, which will be an independent state body from the Bank of Namibia in the next three years, published their first annual report, which detailed their successes, challenges and financial status.
The figures in the FIC 2016 annual report also show that a lot of crime-linked money is not blocked.
For instance, the FIC’s annual report said they issued 79 blocking orders to restrict funds totalling N$54 million between 2010 to 2016, including assets (cars and houses) forfeited worth N$1,8 million.
This is measly, considering that the same centre suspected that N$5,7 billion was linked to criminal transactions between 2009 to 2016.
The centre said it is not guaranteed that the money flagged as criminal-linked will result in investigations, confiscations and forfeitures of criminal proceeds.
According to the report, the increase in reporting transactions since 2009 was partly because of improved supervision and compliance assessments by the centre on other institutions.
The report said the centre, as from 2009 to 31 March 2016, reported around 980 cases to local law-enforcement agencies for further investigation of suspected activities of money laundering and terrorism financing in Namibia.
These reports included capturing and freezing proceeds of crime within Namibia.
The FIC also produced 85 intelligence reports from 2009 to 2016 to foreign intelligence units to investigate suspected money laundering and terrorism financing.
The centre helped foreign countries to freeze and confiscate suspected proceeds of crime.
“Predicate offences identified during analyses were, among others, corruption, fraud, tax evasion, contraventions of exchange control regulations, rhino poaching, theft, diamond smuggling and illegal scams,” the report said.
Since money laundering is often carried out in several countries, its prevention requires various communications and exchanges of information, said the report, adding that “for the period 2009 to 31 March 2016, the FIC received 21 requests for information from foreign financial intelligence units, and 200 requests for information from local law enforcement agencies”.
The Namibian could not establish what the 21 requests were about because of FIC’s secrecy.
One of the intelligence reports done by the centre was for the Italian government about the business ties of known Mafia man Robert von Palace Kolbatschenko, better known in this part of the world as Vito Palazzolo, to Namibia.
The intelligence dossier claimed that Palazzolo, who is serving jail time in Italy for organised crime, relates to two companies in Namibia in which the Palazzolos are said to have initially hidden their wealth.
That report linked Namibian lawyer Henner Diekmann directly into deals of the Mafia ringleader Palazzolo.
In fact, Diekmann, who created companies for the Mafia, was also involved in N$14 million worth of transactions via his law firm, an intelligence report found.
Diekmann strongly rejected links to the Mafia kingpin when asked by The Namibian in 2015.
The FIC was also involved in a case of a Congolese general and the managing director of the state-owned August 26 Industries, who risked losing N$2 million that they claim belongs to a joint business venture of theirs.
Prosecutor general Martha Imalwa said in an affidavit filed in the Windhoek High Court in May this year that military-owned August 26 Industries’ managing director Moses Kamunguma and his business partner, general François Olenga, gave six different explanations about the origin and purpose of the N$2,7 million made into Kamunguma’s account in June 2014.
The centre faced allegations by senior officials in government that it fails to dig deeper into transactions involving wealthy Namibian business people. However, the same FIC investigated whether politically-connected businessmen Desmond Amunyela and his partner Lazarus Jacobs helped relieve the massive municipal debts of President Hage Geingob in return for protecting a former Israeli fugitive, Jacob ‘Kobi’ Alexander.
Despite documentary proof, Geingob rejected being investigated by FIC, or that his bills were paid for by his former erstwhile friends.
The FIC annual report said the agency is faced with too few staff to “effectively and efficiently” execute its mandate.
The total staff complement of the centre is 31 which costs N$1,3 million in salaries, and another N$1 million for travel allowances.
The operating budget of the centre is just over N$20 million.